ENI Navigates Lower Oil Prices: Q3 Adjusted EBIT Down 14%, Boosts Stock Buyback

ENI S.p.A. E reported third-quarter pro forma adjusted EBIT of €3.4 billion ($3.68 billion), down 14% year-over-year.

Hydrocarbon production rose 2% to 1.661 kboe/d ($1.80 kboe/d), with installed capacity from renewables of 3.1 GW at the end of the period.

E&P proforma adjusted EBIT was 3.2 billion euros, down 5% due to lower realizations impacted by a decrease in crude oil prices in USD.

Global Gas & LNG Portfolio segment proforma adjusted EBIT stood at 0.25 billion euros, up 65% on the more favorable trading environment and the positive outcome of a negotiation/settlement.

Adjusted net profit stood at 1.27 billion euros, down 30% from the prior year but above the analyst consensus of 1.08 billion euros (per Reuters).

CEO Claudio Descalzi stated, “We have increased our upstream production alongside investing for the next phase of growth, including gaining approval for the plan of development on our large Indonesian projects.”

”Our satellite strategy continues to evolve and we are delighted to confirm the €2.9 bln investment by KKR into Enilive, which builds on the transaction concluded at Plenitude earlier in the year and demonstrates our ability to attract investment, confirming the value we are delivering.”

Outlook: The company projects hydrocarbon production to be around 1.70 million boe/d (vs. upper end of the 1.69 – 1.71 million boe/d range), given a forecast Brent price of $83/bbl.

The company now expects proforma adjusted EBIT of 14 billion euros vs. around 15 billion euros prior, with adjusted CFFO before working capital expected to be 13.5 billion euros (prior view: exceeding 14 billion euros) for the year.

Dividend: Eni anticipates the next quarterly dividend, following shareholder approval of a 1 euros per share dividend for FY 2024 (a 6% increase from 2023), will be 0.25 euros per share, payable on November 20, 2024.

Buyback: The company plans to raise the 2024 share buyback, which is now expected to be 2 billion euros, a 25% increase on the previous guidance of 1.6 billion euros and more than 80% higher than the original plan for the year. This will bring the total distribution to around 38% of CFFO.

In a separate release, Eni and SERI Industrial disclosed that they have established an agreement to explore the potential development of an industrial chain for lithium-iron-phosphate electrochemical batteries.

This initiative focuses on applications in energy storage systems (ESS) and industrial and commercial electric mobility.

Price Action: E shares are up 1.36% at $31.32 at last check Friday.

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