Italian energy group Eni said on Friday its first-quarter net profit fell 11% year on year on lower oil and gas prices compared with the first three months of 2022, when Russia's invasion of Ukraine sent energy prices soaring.
Adjusted net profit for the period came in at 2.91 billion euros ($3.2 billion), down from 3.27 billion euros a year ago, but above an analyst consensus of 2.31 billion euros.
The results were underpinned by a rise in hydrocarbons production and a better-than-expected performance at the gas and liquefied natural gas division (GGP), which reported earnings before interest and taxes (EBIT) nearly double what analysts had estimated.
Shares in Eni rose as much as 1% in early trading before turning negative and shedding 0.7% at 0900 GMT with Milan blue-chip index down 1.5%.
The group revised its forecasts for the underlying economic scenario and duly tweaked its guidance for the year. On the back of a stronger euro, a lower gas price in Italy and a higher refining margin, Eni now expects its full-year EBIT at 12 billion euros versus a previous guidance of 13 billion euros.
Bernstein analysts supported Eni's view that the underlying performance was actually healthier than previously expected. "Adjusting for their refining, European gas and FX updated planning prices, then EBIT guidance would have been down by 2.2 billion (euros).
Hence, this is a material 1.2 billion underlying EBIT raise," Bernstein said.
It has an "Outperform" rating on the stock. The group also cut the expectation on 2023 capital expenditures to around 9.2 billion euros from 9.5 billion euros.
"With our resilient financial position and flexibility we can confirm the basis on which we will seek authorization at the AGM in May for the previously announced plan to raise the 2023 dividend to 0.94 euros per share and begin our 2.2 billion euro share buyback," CEO Claudio Descalzi said in a statement.
Separately Eni's chemicals division Versalis said it agreed to acquire the majority share of Italian chemicals group Novamont it does not already own. Versalis, which was advised by UniCredit, did not disclose financial terms of the deal.
($1 = 0.9084 euros)
(Reuters - Reporting by Francesca Landini; Editing by Kenneth Maxwell and Keith Weir)