Italian energy major Eni reported its highest net profit in at least a decade, completing a series of record-setting results for Europe’s biggest oil and gas companies following upheaval in energy markets amid the war in Ukraine.
Despite a weaker performance in the final three months of the year, which weighed on the company’s share price on Thursday morning, Eni made adjusted net profits for 2022 of €13.3bn, the highest since at least 2009, when the group started reporting the metric.
In the fourth quarter adjusted net profit was €2.5bn, in line with an average analyst estimate compiled by the company, but down from each of the first three quarters when it reported respective figures of €3.3bn, €3.8bn and €3.7bn. Eni’s shares were down about 1 per cent on Thursday morning.
Chief executive Claudio Descalzi said the group had delivered “excellent financial and operating results” while working to secure new sources of energy for Italy and Europe to replace Russian hydrocarbons.
The weaker performance in the final three months was largely due to a drop in oil and gas prices from the highs earlier in the year, and slightly lower production than forecast.
“During the year, we were able to finalise agreements and activities to fully replace Russian gas by 2025, leveraging our strong relationships with producing states and fast-track development approach to ramp up volumes from Algeria, Egypt, Mozambique, Congo and Qatar,” 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, rather than rely on US liquefied natural gas to replace piped supply from Russia.
Gas deliveries from Russia have fallen dramatically since its full-scale invasion of Ukraine a year ago and the EU has pledged to phase out Russian energy completely.
The disruption in energy markets caused by the invasion drove up fossil fuel prices to historic levels last year, supercharging producers’ profits and prompting new windfall taxes in the UK and EU.
Eni said it owed an additional €1.7bn in tax because of the new levies, of which it had already paid €1bn in 2022.
Like its European rivals, Eni is in the process of building out new low-carbon businesses to help reduce the company’s emissions.
Last year it postponed the initial public offering of its retail and renewable power business, citing poor market conditions. However, Descalzi said the unit, known as Plenitude, had still been able to double its installed renewable power capacity to 2.2 gigawatts during 2022. The company expects that to grow to 6GW by 2025 and 15GW by 2030.
Eni will release its strategy for the next three years on Thursday.
