Energy, Automobile, EV, Renewable News | Eni Announce results for the second quarter and half year 2022

Eni Announce results for the second quarter and half year 2022

July 29, 2022

Financial highlights of the second quarter of 2022

Group adjusted EBIT in the second quarter 2022 was €5.84 billion, up 13% q-o-q and more than doubling y-o-y driven by the favorable commodity price environment, strong refining margins and the focus on cost management and business operating performance.
E&P delivered €4.87 billion of adjusted EBIT in the second quarter 2022, up by 11% q-o-q and more than doubling y-o-y, fully capturing the improved scenario. Production in the quarter was 1.58 million boe/d down 1% y-o-y and slightly decreasing from the previous quarter due to primarily force majeure events in Libya, Nigeria and Kazakhstan.
After a strong first quarter thanks to the LNG business and portfolio flexibility, GGP was at break-even in the second quarter, reflecting normal seasonal patterns in profitability.
R&M performed very well, achieving adjusted EBIT of €979 million driven by strong refining margins but outperforming thanks to higher utilization, output optimization, efficiency measures to address utilities costs, and despite the higher expenses required to replace Russian crudes in our refinery slate.
Despite the rising prices of oil-based feedstock and higher utilities costs driven by natural gas prices, the chemicals business managed by Versalis reported a positive result of €125 million in the second quarter, reversing the €115 million loss of the first quarter 2022, thanks to efficiency initiatives and the optimization of production volumes.
Plenitude (including the retail, renewables & electric mobility businesses) reported second quarter adjusted EBIT of €112 million (+58% y-o-y) driven by a ramp-up in produced volumes of renewable electricity, higher wholesale prices and effective customer base management, confirming the resilience of our integrated business model.
The legacy business of natural gas-fired power and steam production reported a lower adjusted EBIT compared to the second quarter 2021 (down 24%) due to a less favorable scenario, partly offset by higher revenues on services (capacity market and dispatching). At the end of July, the divestment of a 49% stake of the business to a minority shareholder was closed with net proceeds to Eni of €0.55 billion.
Group adjusted net profit in the second quarter was €3.81 billion (€7.08 billion in the first half 2022), an improvement of €2.9 billion y-o-y (€5.9 billion increase in the first half) reflecting this strong EBIT result and further helped by the performance of our equity-accounted entities and a lower tax rate (quarter on quarter tax rate was essentially in line). The year over year reduction in the tax rate mainly relates to an improvement in the geographical mix of pre-tax profits and scenario-related effects in E&P, as well as in Italy better profitability in the lower taxed downstream, and also for the first half midstream.
In the second quarter 2022, the Group adjusted cash flow before working capital at replacement cost was €5.19 billion. In the first half of 2022, it reached €10.80 billion, more than doubling y-o-y. After funding first half organic capex of €3.44 billion, +18% y-o-y due to a stronger US dollar and planned post lockdown activity, and working capital needs, the Group realised an organic FCF of about €5 billion.
Dividend distribution: in May Eni paid its final 2021 dividend of €0.43 per share, amounting to €1.52 billion. The first quarterly instalment of 2022 dividend of €0.22 per share will be paid in September 2022.
Buy-back program: based on the authorization granted by the Shareholders Meeting on May 11, 2022, the Board of Directors approved a new share purchase program to be executed through April 2023, providing for a minimum outlay of €1.1 billion and a possible upside up to €2.5 billion depending on trends in the scenario.
The 2022 buy-back program commenced at the end of May and through July 22, 2022, 29.4 million shares have been purchased for a cash outlay of €355 million. Following the Board’s revised outlook for the Brent crude oil prices, now expected at 105 $/bbl average for the full year 2022 and reflecting the effects of the stronger US dollar plus broader strength in the Group’s cash flows the buy-back commitment has been raised by €1.3 billion to €2.4 billion.
Net borrowing ex IFRS 16 as of June 30, 2022, was €7.9 billion down by €1.1 billion compared to December 31, 2021, and the Group leverage stood at 0.15 versus 0.20 as of December 31, 2021.

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