Eni, profit halved in the quarter. Buyback strengthened, Descalzi: “Excellent results”

Eni closes the first three months of 2024 with an adjusted net profit of 1.58 billion, down 46% compared to the same period of the previous year and with a net profit of 1.2 billion, down 49% compared to the first three months of 2023.

The group communicated this in a note after the board of directors which approved the accounts, explaining that the scenario of the first quarter of 2024 was characterized by the decline in natural gas prices (approximately -50% compared to the first quarter of 2023, the decline in the spot price at the main European hubs), while the price of Brent crude oil was stable at 83 dollars a barrel.

“The financial results for the quarter were excellent, with a strong contribution from E&P thanks to the 5% increase in production compared to the previous year and the continued growth of Plenitude and Enilive”, he clarified to Eni’s CEO, Claudio Descalzi, in a note. In which he announces “based on our updated scenario, our expectations are for an operating cash flow of over 14 billion euros and, in line with our distribution policy, we expect to increase the 2024 buy-back plan by 45 % to 1.6 billion”.

Precisely with regards to the new Enilive and Plenitude business sector, mentioned by Descalzi, the accounts explain that “it contributed substantially to the Group’s results with 0.42 billion adjusted pro forma Ebit (the operating margin without extraordinary items, approximately +60% compared to the first quarter of 2023). Enilive achieved 0.18 billion adjusted pro forma Ebit (+30%) thanks to the increased processing of the biorefineries and the positive performance of the marketing activity.

Plenitude recorded 0.24 billion adjusted pro forma Ebit, 80% more than the previous year, driven by higher commodity margins which benefited from a favorable price scenario and from the better performance of retail in international markets as well as from the entry operating new renewable capacity and related production.

Citi analysts judge Eni’s results overall to be in line with expectations, but based on a consensus that had already been revised downwards. The American bank highlights the increase in the outlook for the price of oil (from 80 to 86 dollars a barrel) and the expansion of the buyback from the expected 1.1 billion, “even if the high financial leverage compared to competitors reduces the ability to react if the macroeconomic situation were to worsen”.

Beyond the budget results, Eni records “with satisfaction the decision of the Council of State which after 4 years rejected the thesis of the Competition and Market Authority (AGCM) according to which Eni had implemented an unfair commercial practice to the detriment of consumers for the advertising campaign for Eni Diesel+ fuel“. A note explains that the Council of State “has in fact fully accepted Eni’s appeal in the proceedings with which the company had been condemned to pay a fine of 5 million euros. In 2020, the Agcm contested the valorisation in terms of environmental benefit of the green component consisting of the percentage of HVO (hydrogenated biofuel) mixed in diesel. With the ruling of the Council of State, an affair which caused Eni significant economic and reputational damage comes to an end, confirming unjust accusations of ‘greenwashing’ which are now revealed to be totally unfounded”.