Italian energy group Eni reported a 49% decrease in its adjusted net profit for the second quarter of the year due to lower commodity prices. However, the company’s strong performance in its gas business helped it exceed expectations.

Adjusted net profit for the period was 1.94 billion euros ($2.13 billion), down from 3.81 billion euros the previous year. Despite the decline, this result surpassed the analyst consensus of 1.64 billion euros.

Eni’s gas business (GGP) played a key role in the company’s second-quarter results, generating an adjusted operating profit of 1.1 billion euros. This figure was more than double the 0.5 billion euros predicted by analysts. As a result, Eni raised its 2023 guidance for the gas business.

Eni’s swift response to Russia’s invasion of Ukraine last year, which involved replacing Moscow’s gas supplies with fuel extracted from African countries, contributed to its strong position in the gas markets.

The positive performance of Eni’s gas division in the last three months was driven by trading activity related to its large gas portfolio, as well as re-negotiations and settlements related to contracts.

Eni now expects the gas business to achieve an adjusted earnings before interest and taxes (EBIT) figure between 2.7 billion and 3.0 billion euros for the year, surpassing the previous guidance of 2.0-2.2 billion euros.

In addition to the improved outlook for its gas business, Eni also enhanced its full-year expectations for its low-carbon unit, Plenitude. Furthermore, the company reduced its capital expenditure plans for the year to below 9 billion euros.

Despite weaker oil and gas prices, Eni maintains its confirmed expectation of adjusted EBIT totaling 12 billion euros for the year.

Shell and TotalEnergies recently reported significant declines in their second-quarter profits compared to the previous year. In contrast, Eni’s second-quarter results surpassed market expectations.

According to Royal Bank of Scotland, Eni’s adjusted EBIT and net income were well ahead of market expectations. The bank also highlighted that the revised guidance for the gas division was a significant improvement relative to market predictions.

Eni’s shares rose by 1% following the announcement, outperforming Milan’s blue-chip index.

During the second quarter, Eni and other energy companies faced challenges such as a 30% drop in crude oil prices and a decline of over 60% in gas prices and refining margins compared to the same period last year.

Despite the uncertain outlook for commodity prices, Eni stated that it would continue its share buy-back program initiated in May.

Eni CEO Claudio Descalzi expressed confidence in the company’s performance, stating that they have a solid position to pay the first quarterly installment of the raised 0.94 euros per share 2023 dividend in September, as well as continue their 2.2 billion euro buy-back.