(Alliance News) - Eni Spa reported Friday that it closed the first half with a sharp year-on-year decline in net profit despite a slight increase in hydrocarbon production.

The six-legged dog's net income fell 64 percent in the first half, to EUR2.68 billion from EUR7.40 billion in the first half of 2022, while, in the second quarter alone, the decline was even sharper, to EUR294 million from EUR3.82 billion.

Sharp decline also for adjusted profit, down to EUR4.84 billion from EUR7.08 billion in the first half and to EUR1.94 billion from EUR3.81 billion in the quarter. Adjusted net income is obtained by excluding from reported net income special items and inventory gain or loss as well as, in determining net income of business segments, financial expenses or income related to net financial debt.

Adjusted operating income decreased to EUR8.02 billion from EUR11.03 billion in the first half and to EUR3.38 billion from EUR5.84 billion in the quarter. Adjusted pre-tax profit, on the other hand, fell to EUR8.65 billion in the first half of the year and to EUR3.67 billion in the April-June period from EUR11.46 billion and EUR6.22 billion, respectively.

Hydrocarbon production remained almost stable in the first half, at 1.63 million boe per day from 1.62 million in the first half of 2022 while, in the second quarter alone, it rose to 1.61 million from 1.59 million.

Claudio Descalzi, Eni's CEO, said, "In the second quarter, Eni achieved excellent operational and financial results in a less favorable market environment. We emphasize this resilience after Eni, in the previous and much more positive scenario, was able to make the most of opportunities. In addition to achieving positive financial milestones, Eni has made important progress in implementing its strategy in all areas of its business."

"Considering the performance in the first half of the year and the clear progress in our business sectors, leading to an improvement in the forecast for full-year results, the solid fundamentals are confirmed on the basis of which to pay in September the first quarterly instalment of the annual dividend of EUR0.94 per share, increased from the previous year, as well as to continue the EUR2.2 billion share buyback program launched in May."

Eni's board of directors approved the distribution of the first of four tranches - totaling EUR0.94 annual dividend - of the FY2023 dividend of EUR0.24 per share outstanding on the ex-dividend date of Sept. 18, with a payment date of Sept. 20.

In the second quarter, cash flow from adjusted operating activities before working capital at replacement cost of EUR4.2 billion largely financed outlays for organic investments of EUR2.6 billion and dividends of EUR700 million. In the first half, adjusted cash flow was EUR9.5 billion, generating organic free cash flow of EUR3 billion.

Net debt ex-IFRS 16 as of June 30, 2023 is EUR8.2 billion; leverage is 0.15 from 0.13 as of December 31, 2022.

By Giuseppe Fabio Ciccomascolo, Alliance News senior reporter

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