Versalis widens loss as restructuring ‘begins to yield benefit’

Milan, Italy – Eni’s chemicals arm Versalis remained in the red for the first half of 2025, but the Italian group said its restructuring programme (ERJ report) launched late last year has started to “yield some benefits”.

The chemical business, managed by Versalis, reported a pro-forma adjusted loss of €184 million in the second quarter, down €38 million from the same quarter last year, Eni reported 25 July.

The group linked the decline to reduced oil-based feedstock expenses amid ongoing restructuring.

“The overall picture of the chemical sector remains weak, driven by macro headwinds and comparatively higher production costs in Europe compared to other geographies,” the group said.

These factors, it noted, have reduced the competitiveness of Versalis production compared to US and Asian players “in an oversupplied market.”

In the first half, Versalis’ pro-forma adjusted loss amounted to €427 million, down from €390 million reported for the first six months of 2024.

The widened loss, Eni said, reflects “exceptionally adverse market conditions.”

“Our transformation plan for Versalis is a critical lever,” explained Eni chief executive Claudio Descalzi during an earnings call.

The company closed its Brindisi steam cracker in March and shut down another cracker in Priolo in July, “well ahead of our original plan,” said Descalzi.

The closures will allow Versalis to address “a significant portion of the losses through the remainder of 2025 and 2026.”

Together with the investments in new platforms, the plant closures are expected to contribute to delivering a turnaround in EBIT of almost €1 billion, bringing Versalis back to "FCF breakeven" at the end of its four-year plan, the Eni leader added.

While Versalis remained “significantly loss-making,” Descalzi said the first positive effects of the transformation plan are expected to be observed in the second half of this year.

“Our refining operations improved over the first quarter on a better margin but were impacted by downtime at key assets,” he added.

Volume sales of chemical products stood at 720 kilotonnes in the second quarter, down 5% year-on-year due to lower demand and plant shutdowns.

In the first half, volumes dropped 6% year-on-year to 1.52 million tonnes, according to Eni.

“Margins remained weak across the board as commodity prices did not offset feedstock and energy input expenses due to European headwinds, sluggish economic activity, and competitive pressures from players with better cost structures,” it concluded.