Eni’s Board of Directors has released the group results for 1Q17 (unaudited).
Commenting on the results, Claudio Descalzi, CEO of Eni, remarked: “Eni has markedly improved its financial and operational performance in 1Q17. The Group has delivered a 60% increase in adjusted net profit to €750 million, compared with €460 million in 4Q16 when oil prices had already recovered to levels close to those experienced in this quarter. The operating growth is even bigger if compared with the first quarter 2016, when oil prices were at their lowest. Furthermore, the Group has seen with €2.6 billion its strongest cash generation in seven quarters. This performance was driven by the ongoing execution of Eni strategy across all business segments on 2017 targets, which are all confirmed. Flagship upstream projects, such as Jangkrik in Indonesia and OCTP in Ghana, are all about to come on stream, while Zohr in Egypt is progressing ahead of schedule. All this makes me confident about the full year budget production guidance. The disposal of assets in Egypt and Mozambique, which are expected to close before the end of the year, will contribute to a further strengthening of the Group’s financial position while maintaining future growth prospects. We expect that in 2017 organic cash generation, coupled with proceeds from disposals, will allow us to fully fund our capex and dividend requirements at an oil price well below the current level.”
Exploration and production
- Production for the quarter: up by 2.3% to 1.795 million boe/d; up by 5.7% excluding negative price effects of PSAs and OPEC cuts.
- Started the East Hub project in Angola; also confirmed time schedules of other large, highly cash generative projects expected for 2017: Jangkrik in Indonesia, OCTP in Ghana and Zohr in Egypt.
- Achieved important exploration success offshore Mexico in a conventional lease with a high working interest. Additional exploration successes achieved in Libya, Indonesia and Norway.
- Portfolio of unproved properties: acquired new leases offshore Cyprus, Ivory Cost and Norway.
- Signed a deal to dispose of a 25% interest in Area 4 in Mozambique to ExxonMobil for a cash consideration of approximately $2.8 billion. Also closed the sale of the 10% interest in Zohr to BP.
- E&P adjusted operating profit: €1.42 billion (an increase of €1.32 billion vs. 1Q16).
Gas and power
- Signed a deal to dispose of the retail business in Belgium as part of Eni’s divestment plan for the 2017-2020 period.
- Agreed terms for the supply of LNG volumes in excess of 11 million t to Pakistan over a fifteen-year period, in line with the strategy to strengthen position.
- G&P adjusted operating profit: €338 million, up by 19% from 1Q16.
Refining and chemicals
- Breakeven refining margin below US$4/bbl.
- R&M adjusted operating profit: €66 million, in line with the first quarter of 2016, notwithstanding the shutdown of the EST plant at the Sannazzaro refinery.
- Chemicals adjusted operating profit: €123 million, representing a strong performance, leveraging the restructuring plan executed in the last few years.
- Adjusted operating profit: €1.83 billion, up by 215% or €1.25 billion, vs 1Q16.
- Adjusted net profit: €0.74 billion (up by €0.74 billion vs 1Q16).
- Net profit: €0.97 billion.
- Strong cash generation: €1.93 billion, up by 41% vs 1Q16; €2.60 billion before changes in working capital at replacement cost, up by 76%.
- Capex: €2.83 billion (€2.42 billion on a pro-forma1 basis), in line with strategy to bring cash- generative projects on stream in 2017.
- Disposals agreed in the first quarter of 2017 of €2.9 billion, approximately 60% of the minimum target planned for the 2017-2020 four-year period.
- Net debt: €14.9 billion, in line with the end of 2016.
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