Eni becomes latest energy major to report record profits

Italian energy giant Eni reported its highest net profit in at least a decade, completing a series of record results for Europe’s biggest oil and gas companies following the upheaval in energy markets amid the war in Ukraine.

Despite a weaker performance in the final three months of the year that weighed on the company’s share price as of Thursday morning, Eni posted adjusted net income of 13.3 billion euros for 2022, the highest since at least 2009, when the group started reporting the metric .

In the fourth quarter, adjusted net income was 2.5 billion euros, in line with the company’s average analyst estimate, but lower than in the first three quarters, when it reported figures of 3.3 billion euros, 3.8 billion euros and 3, reported 7 billion euros. Shares of Eni lost about 1 percent on Thursday morning.

Chief Executive Claudio Descalzi said the group had achieved “excellent financial and operational results” while working to secure new sources of energy for Italy and Europe to replace Russian hydrocarbons.

The weaker performance over the last three months was largely due to a decline in oil and gas prices from the highs seen earlier in the year and slightly lower than forecast production.

“During the year, we were able to finalize agreements and activities to fully replace Russian gas by 2025, leveraging our strong relationships with producing countries and our accelerated development approach to source volumes from Algeria, Egypt, Mozambique, Congo and Qatar increase.” he said.

Descalzi, who has run Eni since 2014, told the Financial Times last year that Europe should develop a “south-north” energy axis with Africa instead of relying on US LNG to replace pipeline supply from Russia.

Gas supplies from Russia have fallen dramatically since the full-scale invasion of Ukraine a year ago, and the EU has pledged to shut down Russian energy entirely.

The disruption to energy markets caused by the invasion pushed fossil fuel prices to historic levels last year, boosting producer profits and prompting new windfall taxes in the UK and EU.

Eni said it owed an additional €1.7 billion in taxes because of the new levies, of which it had already paid €1 billion in 2022.

Like its European peers, Eni is in the process of building new low-carbon businesses to reduce the company’s emissions.

Last year it postponed the IPO of its retail and renewable energy businesses, citing poor market conditions. However, Descalzi said the unit known as Plenitude was still able to double its installed renewable power capacity to 2.2 gigawatts in 2022. The company expects this to grow to 6 GW by 2025 and 15 GW by 2030.

Eni will publish his strategy for the next three years on Thursday.