Business | Oil & Gas
Channel Sponsor
ENI's earnings soar 52% on higher crude production
ENI, Italy's largest oil company, said second-quarter profit rose 52 per cent as crude prices reached a record and production climbed.
- Bloomberg
- Published: 00:04 August 1, 2008
Rome: ENI, Italy's largest oil company, said second-quarter profit rose 52 per cent as crude prices reached a record and production climbed.
Net income advanced to 3.44 billion euros ($5.36 billion) from 2.27 billion euros, the Rome-based company said yesterday in a statement. Profit excluding changes in the value of inventories rose 4.4 per cent to 2.32 billion euros, missing the 2.42 billion-euro estimate in a survey of nine analysts by Bloomberg.
CEO Paolo Scaroni, in his fourth year at ENI, is relying on production at fields acquired over the past year to help boost the company's production by an average of 4.5 per cent a year through 2011.
"ENI and the French company Total have done better in this area than their rivals," Karim Bertoni, a Geneva-based fund manager at Banque Syz, which oversees $26 billion and doesn't hold ENI stock, said in an interview. "In the last five years they've made better use of reserves and we saw the influence of acquisitions on results."
Operating profit was higher than expected, Bertoni said. Earnings before interest and tax and not accounting for inventory changes rose 34 per cent to 5.6 billion euros, exceeding analysts' estimates ENI would report 5.56 billion euros of adjusted Ebit.
The shares gained as much as 40 cents, or 1.8 per cent, to 22.44 euros and traded at 22.07 at 10.06 am in Milan. The company, with a market value of 88 billion euros, has lost 12 per cent of its value this year, better than the 15 per cent slide in the Bloomberg European Energy Index.
Crude prices almost doubled in the second quarter from the year earlier, averaging $123.80 a barrel. Oil reached a record $147.27 a barrel on July 11.
ENI lowered its 2008 oil production forecast to about 1.77 million barrels of oil equivalent a day, about two per cent higher than last year, to account for the higher prices. Contracts with oil-rich countries, called production sharing agreements, allow them to keep a larger portion of output as prices rise.
Scaroni in February said output would rise to more than 1.8 million barrels a day this year based on an oil price assumption of $64 a barrel. Yesterday's forecast is based on an annual average price assumption of $112 a barrel.
In the quarter, oil and natural gas output rose 2.1 per cent to 1.77 million barrels of oil equivalent a day.
Share this article
More from Oil & Gas
More from Business
Popular in Business
-
Budget travel
Airlines in the region
Take a pictorial look at some of the budget airlines in GCC
Business Editor's choice
-
Journey of UAE's own label owner
Sky is the limit for Rais who has renowned Djs signed to his firm
-
Global Village
Revamped layout featuring four cultures to greet visitors this season
-
UAE's bounced cheque law explained
Senior lawyer Hassan Arab explains court's take on bounced cheques
