- FINANCE, STRATEGY AND REPORTING
IQ 17 | IIQ 17 | IIQ 16 | % Ch. | IH 17 | IH 16 | % Ch. | ||
---|---|---|---|---|---|---|---|---|
53.78 | Brent dated | $/bbl | 49.83 | 45.57 | 9 | 51.81 | 39.73 | 30 |
1.065 | Average EUR/USD exchange rate | 1.101 | 1.129 | (2) | 1.083 | 1.116 | (3) | |
1,795 | Hydrocarbon production | kboe /d | 1,771 | 1,715 | 3 | 1,783 | 1,734 | 3 |
1,834 | Adjusted operating profit (loss) (a) | € million | 1,019 | 188 | .. | 2,853 | 771 | .. |
1,415 | of which: E&P | 845 | 355 | .. | 2,260 | 450 | .. | |
338 | G&P | (146) | (229) | 36 | 192 | 56 | .. | |
189 | R&M and Chemicals | 352 | 156 | .. | 541 | 333 | 62 | |
744 | Adjusted net profit (loss) (a) | 463 | (317) | .. | 1,207 | (315) | .. | |
0.21 | ‐ per share (€) | 0.13 | (0.09) | 0.34 | (0.09) | .. | ||
965 | Net profit (loss) (b) | 18 | (446) | .. | 983 | (829) | .. | |
0.27 | ‐ per share (€) | .. | (0.12) | 0.27 | (0.23) | .. | ||
2,597 | Adjusted cash flow from operations (c) | 2,284 | 1,004 | .. | 4,881 | 2,477 | 97 | |
1,932 | Net cash flow from operations | 2,706 | 1,730 | 56 | 4,638 | 3,100 | 50 | |
2,867 | Capital expenditure (d) | 2,106 | 2,452 | (14) | 4,973 | 6,031 | (18) | |
14,931 | Net borrowings | % | 15,467 | 13,814 | 12 | 15,467 | 13,814 | 12 |
0.28 | Leverage | 0.32 | 0.26 | 0.32 | 0.26 | |||
(1) Non-GAAP measure . For further information see the paragraph "Non-GAAP measures " on page 15. (2) Attributable to Eni 's shareholders - continuing operations. (3) Non GAAP measure . Net cash flow from operations before changes in working capita land excluding inventory holding gains or losses . (4) Include capital contribution to equity accounted entities . |
Yesterday, Eni’s Board of Directors approved the Group results for the second quarter and the first half 2017 (unaudited). Commenting on the results, Claudio Descalzi, CEO of Eni, remarked:
“In the first half of 2017, Eni produced strong results, confirming the soundness of our strategy. We began production of three major offshore projects in Ghana, Angola and Indonesia achieving a record time-to-market and underscoring the robustness of our development model. We also continued our success in exploration, where we discovered 500 million barrels of new resources in the first half. Total production also grew by around 200 kboe/d or over 6% year-on-year, continuing the upward trend seen in recent months. In addition, at the end of the year production will begin at Zohr.
These results have been achieved while maintaining an extremely efficient spending structure, which will reduce capex by about 18% compared to 2016, according to our plan. The Gas, R&M and Chemicals businesses continue to deliver results above expectations: in particular, Chemicals achieved a record result of over €300 million in EBIT, a sign that our efforts to boost and reposition the portfolios products as well as our research efficiency are bearing fruit.
These achievements have enabled us to generate around €5 billion of organic cash, with a free cash flow of €700 million, despite the volatile environment. Therefore, we are able to confirm our goal of funding capital investments and the dividend from organic sources. On this basis, I will propose an interim dividend of €0.40 per share to the Board of Directors, on September 14.”
Highlights
Exploration & Production
Gas & Power
Refining & Marketing and Chemicals
Group results
Outlook
Exploration & Production
Confirmed the 2017 target of 0.8 bln boe of new resources, at a unitary discovery cost of approximately 1 $/bbl.
Confirmed FY production target of 1.84 mln boe/d (up by 5% from 2016) leveraging on new project start-ups (Indonesia, Angola and Ghana) and ramp-ups of fields entered into operations in 2016, mainly in Kazakhstan, Egypt and Norway. The unexpected shutdown of Val d’Agri, which lasted almost a full quarter and the impact of OPEC cuts, will be absorbed by the implementation of other initiatives to optimize production, as well as by the earlier than planned start-up of the large projects in Angola, Indonesia and Ghana.
Gas & Power
Confirmed structural positive results from 2017.
Confirmed cost position improvements by leveraging on long-term supply contracts revision already finalized in large part in the first half of the year.
Eni plans to retain market share in the large customers and retail segments, increasing the value of the existing customer base by developing innovative commercial initiatives, integrating services and optimizing operations.
Refining & Marketing and Chemicals
Confirmed the target of refining breakeven margin at 3 $/barrel in 2018.
Refinery intakes on own account are expected to decrease slightly y-o-y due to the downtime of certain assets at the Sannazzaro refinery and of the Taranto refinery, partially offset by higher volumes at Livorno and Milazzo refineries. Against a backdrop of strong competition, management expects to consolidate volume and market share in the Italian retail market by leveraging innovation and product and service differentiation. In the rest of Europe, sales on a like-for-like basis are expected to slightly increase.
In the Chemical business, sales are expected to trend up, due to higher production supplies. Cracker and polyethylene margins are expected to decline.
Group
Confirmed the target of around 18% reduction in capex y-o-y on a pro-forma basis, i.e. net of the capex which will be reimbursed in connection with asset disposals and advances paid by the Egyptian partners in the Zohr project.
Cash neutrality: confirmed the organic coverage of capex and dividends at a Brent price of approximately 60 $/bbl in 2017.
Leverage at the end of 2017: projected to substantially decline from 2016 level, also reflecting the expected closing of portfolio transactions, particularly the Mozambique deal.
1 Net of reimbursement of capex relating to asset disposals and advances made by the Egyptian partners in the Zohr project, see page 12.
The full version of the Press Release is available in PDF format.
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