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ENI Profit Slides On Lower Output, Confirms 2013 Goals

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Italian energy company Eni SpA said Wednesday that its first-quarter profit slid by 42% on the year, in line with expectations, after a sharp fall in total oil and gas output due to unexpected shutdowns at operations in Libya, Nigeria and the U.K.

"We confirm our growth and profitability targets for the full year 2013, in spite of a slower first quarter," said Chief Executive Paolo Scaroni in a statement.

Eni's first-quarter net profit, adjusted for changes in the value of oil inventories and one-off gains and losses from asset sales, dropped to 1.43 billion euros ($1.86 billion) from EUR2.47 billion a year earlier. This was in line with an average forecast from a Dow Jones Newswires poll of six analysts. Excluding the contribution to 2012 earnings from Snam, Eni said the decline was 39% on the year.

Including exceptional items and inventory effects, Eni's net profit for the three months to March 31 slipped to EUR1.54 billion from EUR3.62 billion a year earlier. Net sales from operations fell 6% to EUR33.14 billion over the period.

Eni's oil and gas output for the first quarter averaged a worse-than-expected 1.600 million barrels of oil equivalent a day, compared with 1.683 million barrels of oil equivalent a day in the same period last year.

Production was hurt in the first three months of the year by the week-long stoppage of Libyan flows due to unrest, disruption of supply from Nigeria after severe flooding and theft, and the continued shut-down of the Elgin-Franklin fields in the North Sea after a gas leak.

The Rome-based company, Italy's largest energy producer by volume, is in the process of increasing its exposure to oil and gas production by boosting investments using funds from the sale of its stakes in Italian gas grid operator Snam and Portuguese energy company Galp Energia SA.

Last month, Eni said it set aside EUR56.8 billion for investments in 2013-2016 as it aims to boost annual hydrocarbon output growth to more than 4% at the end of that four-year plan and above 3% a year between 2016 and 2022.

Copyright (c) 2012 Dow Jones & Company, Inc.

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