April 27 (Bloomberg) -- Eni SpA, Italy’s largest energy producer, said first-quarter profit rose 22 percent as higher oil prices offset lost production caused by violence in Libya.
Adjusted net income climbed to 2.22 billion euros ($3.26 billion) from 1.82 billion euros a year earlier, the Rome-based company said today in a statement. That surpassed the 2.09 billion-euro average estimate in a Bloomberg survey of 12 analysts. Net sales rose 16 percent to 28.8 billion euros.
“Eni delivered a solid set of financial results on the back of a favorable oil price environment,” Chief Executive Officer Paolo Scaroni said in the statement. “In spite of ongoing uncertainties regarding resumption of our activities in Libya, the profitability and growth outlook for our company has remained positive.”
Brent crude averaged $105.52 a barrel during the quarter, helping oil companies boost profits. Eni said today the shutdown of its Libyan facilities caused an 8.6 percent decline in production to an average of 1.68 million barrels of oil equivalent a day in the quarter.
“The results are good, well above estimates, and that’s both interesting and encouraging given the loss of production,” said Gianmaria Bergantino, a fund manager at Bank Insinger de Beaufort in Rome.
Eni added 1.8 percent to 17.79 euros in Milan. The shares are up 8.9 percent this year.
Eni said since April the company has been producing 50,000 to 55,000 barrels of oil equivalent a day in Libya for local electricity production, all coming from its Wafa facility. The loss in output is being partly compensated through ramped-up production in Egypt, Iraq and Italy, the company said. Eni also said it plans to start up new fields in Australia, Algeria and the U.S.
Neither Eni facilities in Libya nor export terminals have been damaged and are currently on “hot standby” ready to produce again once the situation stabilizes, Head of Exploration and Production Claudio Descalzi said during a conference call with analysts. Libya has been convulsed by unrest from rebels hoping to oust its long-time leader.
The gas and power division posted a 6 percent increase in revenue helped by improved sales in Italy, Turkey, France, Spain, Portugal, Germany and Austria. Eni expects European gas markets to remain weak in 2011 due to oversupply and low demand.
Eni said today it expects to receive binding offers for the German TENP gas pipeline and Switzerland’s Transitgas pipeline by the end of next week. The company expects to close the deals in the second half of this year. Eni will transfer the stake in the Trans-Austria pipeline, or TAG, to Italian state lender Cassa Depositi e Prestiti in the next few weeks.
Refining margins are also likely to remain unprofitable in 2011, according to the statement. Refining output will probably decline this year particularly at the Venice refinery due to the halt in supply from Libya, the company said.
Eni has temporarily suspended the sale of its stake in Galp Energia SGPS SA due to the political crisis in Portugal, Chief Financial Officer Alessandro Bernini said on a conference call, adding that he is confident a solution will be found “by the end of the year.”
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