Results by business segment

Exploration & Production

Exploration & Production

 

 

 

 

 

 

(€ million)

2017

2016

2015

Change

% Ch.

(a)

Excluding special items.

Operating profit (loss)

7,651

2,567

(959)

5,084

198.1

Exclusion of special items:

(2,478)

(73)

5,141

 

 

- environmental charges

46

 

 

 

 

- impairment losses (impairment reversals), net

(154)

(684)

5,212

 

 

- impairment of exploration projects

 

7

169

 

 

- net gains on disposal of assets

(3,269)

(2)

(403)

 

 

- provision for redundancy incentives

19

24

15

 

 

- risk provisions

366

105

 

 

 

- commodity derivatives

 

19

12

 

 

- exchange rate differences and derivatives

(68)

(3)

(59)

 

 

- other

582

461

195

 

 

Adjusted operating profit (loss)

5,173

2,494

4,182

2,679

107.4

Net finance (expense) income(a)

(50)

(55)

(272)

5

 

Net income (expense) from investments(a)

408

68

254

340

 

Income taxes(a)

(2,807)

(1,999)

(3,173)

(808)

 

Tax rate (%)

50.8

79.7

76.2

(28.9)

 

Adjusted net profit (loss)

2,724

508

991

2,216

436.2

In 2017, the Exploration & Production segment reported an adjusted operating profit of €5,173 million, increasing by €2,679 million compared to 2016 thanks to the recovery in crude oil prices (with the Brent price up by 24%), as well as the production growth. These positives were partly offset by higher exploratory well write-offs and higher expenses, as well as lower appreciation of Eni’s average realizations than the Brent benchmark, which has not been yet fully reflected in gas prices due to the time lags in oil-linked price formulas.

Adjusted operating profit excluded a negative adjustment of €2,478 million.

Gas & Power

Gas & Power

 

 

 

 

 

 

(€ million)

2017

2016

2015

Change

% Ch.

(a)

Excluding special items.

Operating profit (loss)

75

(391)

(1,258)

466

119.2

Exclusion of inventory holding (gains) losses

 

90

132

 

 

Exclusion of special items:

139

(89)

1,000

 

 

- impairment losses (impairment reversals), net

(146)

81

152

 

 

- environmental charges

 

1

 

 

 

- risk provisions

 

17

226

 

 

- provision for redundancy incentives

38

4

6

 

 

- commodity derivatives

157

(443)

90

 

 

- exchange rate differences and derivatives

(171)

(19)

(9)

 

 

- other

261

270

535

 

 

Adjusted operating profit (loss)

214

(390)

(126)

604

154.9

Net finance (expense) income(a)

10

6

11

4

 

Net income (expense) from investments(a)

(9)

(20)

(2)

11

 

Income taxes(a)

(163)

74

(51)

(237)

 

Tax rate (%)

75.8

..

..

..

 

Adjusted net profit (loss)

52

(330)

(168)

382

115.8

In 2017, the Gas & Power reported an adjusted operating profit of €214 million (up by €604 million from 2016), the best result over the latest seven years. This reflected better margins from the renegotiation of long-term supply contracts, including some contract terminations, lower logistic costs, as well as the improved performance in trading, LNG and Power businesses, targeting structural positive profit one year ahead of plans. From 2017, the profit/loss on stock has been included in the business underlying performance due to a changed regulatory framework on gas storage in Italy, on which basis management has elected to leverage gas stocks as a way to improve margins.

Adjusted operating profit excluded a positive adjustment of €139 million.

Refining & Marketing and Chemicals

Refining & Marketing and Chemicals

 

 

 

 

 

 

(€ million)

2017

2016

2015

Change

% Ch.

(a)

Excluding special items.

Operating profit (loss)

981

723

(1,567)

258

(35.7)

Exclusion of inventory holding (gains) losses

(213)

(406)

877

 

 

Exclusion of special items:

223

266

1,385

 

 

- environmental charges

136

104

137

 

 

- impairment losses (impairment reversals), net

54

104

1,150

 

 

- net gains on disposal of assets

(13)

(8)

(8)

 

 

- risk provisions

 

28

(5)

 

 

- provision for redundancy incentives

(6)

12

8

 

 

- commodity derivatives

(11)

(3)

68

 

 

- exchange rate differences and derivatives

(9)

3

5

 

 

- other

72

26

30

 

 

Adjusted operating profit (loss)

991

583

695

408

(70.0)

- Refining & Marketing

531

278

387

253

(91.0)

- Chemicals

460

305

308

155

(50.8)

Net finance (expense) income(a)

5

1

(2)

4

 

Net income (expense) from investments(a)

19

32

69

(13)

 

Income taxes(a)

(352)

(197)

(250)

(155)

 

Tax rate (%)

34.7

32.0

32.8

2.7

 

Adjusted net profit (loss)

663

419

512

244

(58.2)

In 2017, the Refining & Marketing and Chemicals segment reported an adjusted operating profit of €991 million, increasing by €408 million from the previous year.

The Refining & Marketing business reported an adjusted operating profit of €531 million, the best full year result in the last eight years, increasing by €253 million. The benefits from the initiatives implemented over the last years, which were designed to improve the set-up of Eni’s refining system allowing to reduce the break-even margin below the 4 $/barrel threshold. The improved cost structure enabled the Company to fully capture the upside in the scenario recorded in the first nine months of 2017, despite the shutdown of Sannazzaro refinery. This results were also strengthened by the gain from the licensing of the EST conversion technology to Sinopec and positive performance driven by the effective commercial initiatives, which supported the premium segments.

The Chemical business reported an adjusted operating profit of €460 million, increasing by €155 million, representing the best performance reported in the recent history of Eni’s Chemical business. This result demonstrates the value of the progress in the turnaround process that through the restructuring plan to optimize plant set-up at core hubs and reposition the product portfolio towards higher-value segments, was able to fully capture the upside in the trading environment and to achieve volume upsides.

Adjusted operating profit excluded a positive adjustment of €223 million.

Zohr, one of our seven special products

The remarkable discovery of Zohr, the gas field offshore of Egypt, was the result of Eni's skill, innovation and the courage of its people, who are willing to accept even the most difficult of challenges.