For the first nine months of 2018, the Italian multinational gas and oil producer Eni SpA (MIL:ENI, Financial) reported adjusted net earnings of approximately $3.7 billion, reflecting a 131.3% boost compared to the same period of 2017.
That was announced on Friday after the board of directors’ meeting. The adjusted net earnings were approximately $1.6 billion versus about $269 million reported for the prior-year quarter.
In addition, including one-time charges, the net profit was approximately $4.45 billion for the first nine months of 2018. That represents a 201% growth from the same period of 2017. The non-adjusted net profit increased 340% year over year to approximately $1.78 billion.
The CEO Eni, Claudio Descalzi, commented, “I am very pleased with our performance in the third quarter, which allowed us to record cash flow from operations of €4.1 billion, double the amount we achieved in the same period last year and, even more remarkable, 35% higher than the previous quarter with a Brent price broadly unchanged.”
Translated into U.S. currency the operating cash flow was about $4.8 billion in the third quarter of 2018, about $3.6 billion in the second quarter of 2018 and about $2.54 billion in the third quarter of 2017. The corresponding amounts in U.S. currency have been computed with an average euro-to-U.S.-dollar exchange rate of 1.163 for the third quarter of 2018, of 1.191 for the second quarter of 2018 and of 1.175 for the third quarter of 2017.
The price of Brent per barrel was $75.27 in the third quarter of 2018, $74.35 in the second quarter of 2018 and was $52.08 in the third quarter of 2017. Also, the price of the Brent was $72.13 per barrel in the first 9 months of 2018 and $51.90 per barrel in the first 9 months of 2017.
Claudio Descalzi added: “All the businesses have performed well, with the Upstream division showing that it can thrive either in an environment of increasing oil prices when compared with the third quarter 2017 and, above all, in an environment of flat oil prices when compared with the second quarter 2018. The Mid and Downstream businesses continue their recovery, demonstrating sustainable profitability despite an unfavourable environment.”
The company produced an average of 1.803 million barrels of oil equivalent per day in the third quarter of 2018, which was flat year-over-year and was 60 barrels per day lower than the previous quarter. The production of oil averaged 886,000 barrels per day (bbl) and that of gas averaged 5.008 million cubic feet (mmcf) per day. Both productions of hydrocarbons were approximately flat year-over-year.
In the third quarter of 2018, Eni realized an average of $51.85 per barrel of oil equivalent, which was 47.6% growth year-over-year and a nearly 9% increase from the second quarter of 2018. The Italian multinational gas and oil company realized $69.99 on average per barrel of oil and $5.73 on average per thousand cubic feet of gas.
The exploration and production business accounted for about 95% of the adjusted profit, the gas and power business for 2% and the refining and marketing plus chemicals business for about 3%.
During the third quarter of 2018, Eni cut net borrowings by $1.05 billion to $10.5 billion. From the third quarter of 2017 net borrowings reduced $7.1 billion.
Looking ahead, Eni SpA expects to use 7.7 billion eueros in full fiscal 2018, which is in line with the company’s guidance. Total allocation on capex and dividend payment is based on a Brent price of $55 per oil barrel.
The forward dividend is $1.9435 per share, granting a 5.75% yield as of Oct. 25.
The share price was $33.8 at close on Thursday, for a total market capitalization of approximately $61.42 billion. The share price has climbed 6% for the 52 weeks through Oct. 25 and is now below the 200-, 100- and 50-day simple moving average lines.
The 52-week range is $31.58 to $40.15. The 14-day Relative Strength Indicator is 32.6 within a historical range range of 30 to 70.
Disclosure: I have no positions in any security mentioned.
