MILAN (Reuters) -Italian energy group Eni beat expectations with third-quarter profit which jumped back to pre-COVID levels, boosted by higher gas prices that could give an additional lift to earnings in coming months.
The group, which lifted operating cash guidance for the year, said on Friday it swung to an adjusted net profit of 1.43 billion euros ($1.7 billion) from a 153 million euro loss a year earlier, beating a 1.08 billion euro consensus forecast.
Gas prices have surged in recent months as tight supplies met with strong demand in economies recovering from the pandemic, boosting the bottom lines of many energy companies.
Eni said adjusted operating profit for its Global Gas & LNG Portfolio (GGP) doubled in the third quarter from the second to 50 million euros, adding it expected to reach 500 million euros for the year.
This guidance could be possibly revised upward under sustained volatile and tight market conditions, it said.
“We believe the better than expected results and improved outlook have positive implications for estimates and the stock,” Milan-based broker Equita said.
At 1035 GMT Eni shares were up 1.90% while the European oil and gas index was up 0.08%.
Cash flow from operations, before changes in working capital at replacement cost, jumped 88% to 3.3 billion euros, allowing the company to raise guidance to more than 12 billion euros for the year, from a previous estimate of more than 10 billion.
Cash generation in the first nine months, together with cost management, “more than covers the overall 2021 dividend and buyback,” CEO Claudio Descalzi said.
Eni also painted an upbeat outlook for the upstream business this year.
Oil and gas production grew 6% on the second quarter to 1.688 million barrels of oil equivalent per day (mboe/d), with 1.76 mboe/d expected in the final three months.
Eni has launched one of the industry’s most ambitious clean-up strategies, pledging carbon neutrality by 2050 and shifting into clean energy as it phases out oil production as of 2025.
It recently created a new division comprising renewable energy and retail and plans to list a minority stake in the company to help fund its green drive.
On Friday it said it expected to have 2 gigawatts of renewable energy capacity installed or under construction by the end of this year compared with less than 1 GW last year.
The company is targeting renewable capacity of 15 GW in 2030.
($1 = 0.8572 euros)
Source: Economy - investing.com
