How are Eni’s accounts going?
Eni reported a net profit of 1.5 billion euros in the first quarter of 2024. Net financial debt amounts to 12.9 billion. All the numbers and details in the Energia Oltre article
The first quarter of 2024 closed with positive results for Eni: the company reported an adjusted pro forma EBIT of €4.12 billion, a net profit of €1.58 billion and an adjusted cash flow at replacement costs (before changes of working capital) of €3.9 billion.
In the words of the CEO, Claudio Descalzi: “In the first quarter of 2024 we accelerated the process of transforming our portfolio by leveraging the various value growth platforms, both in traditional businesses and in those linked to the energy transition. Thanks to the completion of the acquisition of Neptune Energy and the announced merger of the UK activities with Ithaca Energy, we will strengthen the Upstream with a greater presence in OECD countries and a growing incidence of gas production; furthermore, the EIP fund's investment in Plenitude, at an implicit value of over €10 billion, confirms the high potential of our renewable and retail segment”.
DESCALZI'S WORDS
Not only. Descalzi recalled that “the €4.1 billion of adjusted pro forma Ebit for the quarter translate into €1.6 billion of net profits. Operating cash flow net of changes in working capital was €3.9 bn, double organic investment spending, allowing us to maintain leverage of 0.23 well within our target range, despite the outlay for the acquisition of Neptune Energy”, underlined the manager.
“These results, together with the efficient execution of our upstream growth programs and profitable development of businesses linked to the energy transition, as well as the capture of the favorable phases of the scenario, mark a trajectory of exceeding the budget economic-financial forecasts. Based on our updated scenario, we expect an operating cash flow of over €14 billion and, in line with our distribution policy, we expect to increase the 2024 buy-back plan by 45% to €1, 6 billion.”
ENI'S FINANCIAL RESULTS IN THE FIRST QUARTER OF 2024
From a financial point of view, Eni's quarter highlights an E&P at €3.32 billion in pro forma adjusted EBIT thanks to production growth (1.74 million boe/d, +5% compared to the first quarter of 2023), driven by entry into operation of new fields and the acquisition of Neptune Energy. “This growth and the constant attention to efficiency have allowed us to achieve resilient results (down by just 13% compared to the first quarter of 2023), despite the weakening of natural gas realization prices,” explained the company .
GGP also achieved €0.33 bn of adjusted pro forma EBIT, in line with management expectations which discounted fewer trading opportunities due to the reduction in both prices and volatility compared to the previous year. Also in the first quarter of 2024, the new Enilive and Plenitude business sectors contributed substantially to the Group's results with €0.42 of adjusted pro forma EBIT (approximately +60% compared to the first quarter of 2023). Enilive achieved €0.18 billion of adjusted pro forma EBIT (+30%) thanks to increased biorefinery processing and the positive performance of marketing activities. Plenitude recorded €0.24 bn of adjusted pro forma EBIT, 80% more than the previous year, driven by higher commodity margins which benefited from a favorable pricing scenario and better retail performance in international markets as well as entry into operation of new renewable capacity and related production.
Enilive's pro forma adjusted EBITDA of €0.25 billion (+27%) and Plenitude's pro forma adjusted EBITDA of €0.35 billion (approximately +50%) were both in line with management's forecasts.
The Refining business recorded solid results, with €0.2 bn of adjusted pro forma EBIT supported by profitable refining margins and plant reliability in Europe. The Chemicals business operated by Versalis achieved an adjusted pro forma operating loss of €0.17 billion due to adverse macroeconomic conditions and cost disadvantages of European plants compared to other geographies. However, the constant attention to optimizing costs has allowed us to improve the result by approximately €70 million on a sequential basis.
First quarter 2024 adjusted net profit was €1.58 billion with a consolidated tax rate of approximately 49%.
Net cash flow from operating activities at adjusted replacement cost (before changes in working capital) was €3.9 billion, exceeding organic investment requirements of €2 billion, thus generating free cash flow on an organic basis (free cash flow) of €1.9 billion. The free cash flow was used to remunerate shareholders through dividend payments and share repurchases (€1.2 billion overall) and to finance the strategic acquisition of Neptune Energy Group (€2.3 billion) and assets of the renewables business in the USA (€0.2 billion), net of the proceeds from the sale of the minority 7.6% stake in Plenitude to the EIP fund (approximately €0.6 billion) and of non-strategic assets in the E&P (€0 .2 billion).
FINANCIAL DEBT
In such a context, the net financial debt ex-IFRS 16 at 31 March 2024 was equal to €12.9 billion with a leverage of 0.23. Finally, in March the third of the four tranches of the dividend relating to the 2023 financial year was distributed, amounting to €0.24 per share for a total of €0.8 billion. The fourth tranche of the 2023 dividend of €0.23 per share is scheduled to be paid on May 22nd.
THE BUYBACK OF SHARES
While as of 5 March 2024, the 2023 buy-back program was concluded with the purchase, in the period May '23 – March '24, of 153.5 million treasury shares for a total cost of €2,200 million (€24 .5 million shares, equal to €363 million in the first quarter of 2024).
ESTIMATES ON OIL PRODUCTION
For the remainder of the year, Eni expects annual hydrocarbon production in the E&P sector to be confirmed in a range of 1.69 -1.71 million boe/d assuming a Brent price revised to $86/bbl. And for GGP a confirmation of the adjusted pro forma EBIT forecast of €0.8 billion.
Enilive and Plenitude chapter: adjusted pro forma EBITDA forecast of €1 billion for each business confirmed; and installed renewable energy capacity projected at 4 GW at the end of 2024, plus approximately 2 GW of organic projects under construction.
The annual adjusted pro forma EBIT and adjusted cash flow forecasts before the change in working capital are revised upwards to over €14 billion. While as regards organic investments, they are expected to be around €9 billion in line with the original forecast. Including the expected developments of the divestment plan, investments net of proceeds are expected in the €7 – 8 billion range, confirming the original forecast.
SHAREHOLDER REMUNERATION
As regards shareholder remuneration, the share buyback plan is now expected to rise to €1.6 billion with an increase of 45% compared to the €1.1 billion communicated in the March Capital Market Update. This change is in line with the remuneration policy which attributes 30-35% of the cash flow from operating activities through dividends and buybacks and which envisages allocating up to 60% of the incremental cash flows compared to the management forecasts, and subject to the approval of the Shareholders' Meeting on 15 May 2024 of a purchase plan of up to €3.5 billion.
The Shareholders' Meeting is also expected to approve the 2024 dividend of €1 per share, which represents a 6% increase compared to 2023, with payment in four tranches starting from September 2024.
THE NEXT DIVIDEND
Finally, the next quarterly dividend, as resolved by the Board of Directors on April 4, 2024, will be paid on May 22, 2024, with ex-dividend date on May 20, 2024 for the last quarterly installment of the 2023 dividend of €0.23 per share.
(Article published in Energia Oltre )
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/eni-risultati-primo-trimestre-2024/ on Wed, 24 Apr 2024 14:01:59 +0000.