Eni: operating profit at EUR 4.1 billion, production runs (+6%). Descalzi: 'Results beyond expectations'

Exploiting the strong pull of its usual 'engine', exploration and production, which closed the quarter with a 26% leap in adjusted pro forma operating profit, exceeding EUR 3.5 billion, Eni arrives at the halfway point of the accounts with results above analysts' estimates and with a significant growth in production (+6% compared to 2023), so much so that the group led by Claudio Descalzi has decided to revise upwards some of its 2024 targets, starting with adjusted pro forma ebit, raised to EUR 15 billion, and announced an acceleration of the buyback plan with respect to the April 2025 deadline.

Returning to the numbers, the quarter closed with adjusted pro forma operating profit of EUR 4.1bn, down slightly from the year before (-3%) due to the normalisation of Ggp's (the Gas division) result and the reduction in Versalis's (the Chemicals division) margins, weighed down by difficult market conditions and the further downturn in the chemicals cycle in Europe. In the first half, the bar was set at EUR 8.2bn, down 19% from H1 2023. Adjusted pre-tax profit, adjusted for the effects of extraordinary transactions, stood at 3.4 billion, down 7% compared to Q2 2023. Adjusted net profit attributable to shareholders was 1.5 billion, down 21% compared to Q2 2023, and was impacted by an increase in the group tax rate to 55% (compared to 47% in the comparative quarter) due to the higher tax burden on consolidated pre-tax income from foreign countries.

Ajusted cash flow before changes in working capital is 3.9 billion, thanks to robust industrial management supported by operational effectiveness, growth, our value assets and financial discipline. In H1 2024, the group generated adjusted cash flow from operations of 7.8 billion, covering capital expenditure requirements of 4.1 billion. Organic cash flow of EUR 3.7bn covered shareholder remuneration of EUR 2bn and together with proceeds from disposals relating mainly to Plenitude and Saipem of around EUR 1bn reduced debt to EUR 12.1bn after the high level that had accumulated in the first quarter of the year due to the acquisition of Neptune (EUR 2.3bn). As for leverage, it returned to a downward trend, amounting to 0.22 at the end of June.

Eni's CEO Claudio Descalzi spoke of 'results that exceeded expectations', which demonstrate 'the significant progress made by Eni in multiple aspects of its strategy and business plan illustrated to investors last March. With respect to the clear development objectives of our business lines with competitive advantages - hydrocarbon production, biorefining and renewable generation capacity - we have achieved significant growth in each". The CEO emphasises the 'excellent financial results with 1.5 billion in adjusted net profits. In parallel with industrial growth, we are making better than expected progress in portfolio management activities in terms of both execution time and value generated'. We are improving, he added, 'the quality of the upstream portfolio, with the recent announcement of the divestment of non-strategic oil assets in Alaska and the ongoing completion of the sale of onshore assets in Nigeria, while we have finalised an agreement for the business combination between Ithaca Energy and our assets in the UK'.

Then a passage on the most recent transactions. "Enilive has announced an exclusive agreement with the Kkr fund for a private capital infusion that, similar to the transaction finalised in Q1 related to Plenitude, will help fund growth and confirm the value we are creating in our transition-related businesses," he explains. Although the portfolio contribution was relatively small in Q2, net debt has decreased and, with divestments progressing, we expect leverage to be significantly lower than 0.2 at year-end, which is better than our initial expectations. This in turn will allow us to accelerate the EUR 1.6bn share buy-back plan, confirming our ability to deliver on both our business growth and shareholder remuneration objectives.