Eni Profit Misses
(Bloomberg) -- Eni SpA reported second-quarter profit that missed analysts’ estimates, though production held steady and output-growth targets were confirmed.
- Adjusted net income dropped 27% from a year earlier to 562 million euros ($626.5 million), falling well short of the 935.2 million-euro average estimate of analysts. Production slipped just 2%.
- The profit figure reflects a lower operating performance and a “notably” higher tax rate year-on-year in the upstream business, said Jason Kenney, an analyst at Banco Santander SA.
- While Eni is “an attractive way to play a constructive view on oil,” it needs some “clean quarters going forward, without one-offs causing weaker earnings or cash,” said RBC Europe analyst Biraj Borkhataria.
- Higher taxation is a short-term headwind, according to Alessandro Pozzi of Mediobanca, who noted “the long-term investment case of Eni, supported by a more diverse upstream portfolio, with a reduced geopolitical risk and higher margin production.”
- Eni fell 1.3% in Milan trading to 14.16 euros as of 9:41 a.m. local time.
- Santander’s Kenney said a negative share reaction could be an opportunity to buy, as upstream prospects in the second half and continued exploration success buoy Eni’s value.
- Net cash from operations rose 49% from a year earlier to 4.52 billion euros. That in part reflects an additional dividend paid by Var Energi AS, the Norwegian oil company majority-owned by Eni.
- Production slid to 1.83 million barrels of oil equivalent a day from 1.86 million a day a year earlier, following a shutdown at the giant Kashagan field in Kazakhstan and maintenance in Norway.
- Eni confirmed its 2019 target for output growth of 2% to 2.5%.
To contact the reporter on this story:
Chiara Albanese in Rome at firstname.lastname@example.org
To contact the editors responsible for this story:
Chad Thomas at email@example.com
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.