Eni: solid first quarter results despite falling gas prices

Eni reaches the halfway mark of the first quarter with solid results despite the drop in gas prices, which have left 50% of their value on the ground compared to the same period of 2023, while Brent prices have remained substantially stable. Thus, the accounts of the group led by Claudio Descalzi go into the archives with adjusted pro-forma Ebit - which incorporates Eni's share of Eni's associated JVs - at €4.1 billion (-30% on the first three months of 2023), adjusted net profit of €1.58 billion (-46%, while the figure not adjusted for extraordinary items stands at €1.2 billion, down 49%) and adjusted cash flow at replacement cost (before changes in working capital) of €3.9 billion (-26% compared to the first three months of 2023). These results are prompting the group to revise upward both its annual pro forma adjusted Ebit and adjusted cash flow before working capital changes forecasts, with the bar set at over EUR 14 billion. And the buyback plan is also expected to rise, now at EUR 1.6bn, up 45% from the level announced when the strategic plan was presented last March (EUR 1.1bn).

"In the first quarter of 2024 we accelerated the process of transforming our portfolio by leveraging the different platforms for value growth, both in traditional businesses and in those related to the energy transition," commented Descalzi, number one. Thanks to the completion of the acquisition of Neptune Energy and the announced merger of the UK business with Ithaca Energy, we will strengthen our Upstream business with a greater presence in OECD countries and an increasing incidence of gas production; in addition, the investment of the EIP fund in Plenitude, at an implied value of over €10bn, confirms the high potential of our renewable and retail segment".

The CEO emphasises the achievement of 'excellent operating results thanks to our distinctive exploration and development skills: the significant exploration discovery in Côte d'Ivoire will increase the options for long-term value creation in terms of both additional resources and possible early monetisation; the "accelerated" development model has enabled the first liquefied gas cargo from the Congo LNG project to be delivered just one year after the investment decision. The financial results for the quarter were excellent, with a strong contribution from E&P thanks to a 5% year-on-year increase in production and continued growth at Plenitude and Enilive.

Turning to the contribution of the various sectors, in 1Q2024, E&P (exploration and production) achieved pro-forma adjusted ebit of €3.32bn thanks to growth in production (1.74 mln barrels of oil equivalent per day, +5% compared to 1Q2023), as also highlighted by Descalzi, due to the driving force of new fields coming on stream and the acquisition of Neptune Energy. This growth, and the constant focus on efficiency, allowed the group to achieve resilient results (down just 13% compared to 1Q2023), despite the weakening of natural gas realisation prices, the note released by the group underlined.

As for the gas business, Ggp achieved an adjusted pro-forma ebit of EUR 0.33 billion in the first quarter of 2024, in line with management's expectations, which were discounting lower trading opportunities due to lower prices and volatility compared to the previous year.