Italy's Eni posts record profit but markets unimpressed

By Francesca Landini

MILAN (Reuters) -Italian energy group Eni said on Thursday its adjusted net profit rose to 13.3 billion euros ($14.12 billion) in 2022, the largest in over a decade, but its shares fell as markets focused on a weaker exploration and production performance in Q4.

The state-controlled group's 2022 performance was boosted by a heightened focus on energy security and a spike in energy prices caused by the conflict in Ukraine.

Earlier this year, big Western oil groups said their profits more than doubled in 2022, smashing previous records in a year of volatile energy prices.

In the final part of the year, however, a fall in oil and gas prices from previous peaks weighed on Eni's exploration & production (E&P) business and its gas and LNG division, leading to a slowdown versus the previous quarters.

In the fourth quarter the adjusted net profit came in at 2.5 billion euros, just above an analyst consensus of 2.49 billion euros provided by the company but down from the third quarter.

Eni's E&P division reported a 20% fall in its adjusted operating profit in the fourth quarter.

Its oil and gas production fell 4% to 1.610 million barrels of oil equivalent per day (boe/d) for the whole year.

Shares in the Italian group fell 1% at 0840 GMT, underperforming a 0.8% gain in Milan blue-chip index as investors were disappointed by the E&P performance and awaited Eni's strategy presentation later on Thursday.

"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," Eni's CEO Claudio Descalzi said in a statement.

The group also pushed ahead last year in the development of its renewable and retail unit Plenitude, which reached an installed capacity of 2.2 gigawatt (GW) for green energy, and of a newly-established Sustainable Mobility unit.

Thanks to its strong results the group was able to return 5.4 billion euros to its shareholders and cut net debt to 7 billion euros.

Eni also said that windfall taxes on its energy profits totalled 1.7 billion euros, of which 1 billion were paid in 2022.

($1 = 0.9420 euros)

(Reporting by Francesca Landini, editing by Gavin Jones)