Eni lifts guidance as high oil and gas prices boost its bottom line

By Louis Goss

Italian oil major Eni on Friday lifted its full-year guidance and signaled plans to accelerate its share buyback initiative after posting better-than-expected second-quarter results that were boosted by buoyant oil and gas prices and high levels of production.

The Rome-headquartered company upped its full-year outlook, stating it now expects to generate adjusted earnings before interest and tax (EBIT) worth EUR15 billion ($16 billion) in 2024, having previously said it expected to generate EUR14 billion.

Eni's hiked guidance came as the oil supermajor beat forecasts in posting a lesser-than-expected 3% drop in its adjusted EBIT, to EUR4.1 billion, compared to the EUR2.8 billion expected by 10 analysts, FactSet data shows.

Shares in Eni (IT:ENI) , listed in Milan, increased 3% on Friday having lost 7% of their value over the previous 12 months.

Eni, which is part-owned by the Italian government, saw its second-quarter profits boosted by a 6% increase in hydrocarbon production, driven by the expansion of its projects in Libya, Congo, and the Ivory Coast, as it was also buoyed by 8% higher Brent crude prices compared to 2023.

High fuel prices and bumper production saw the Italian firm generate total revenue worth EUR23.1 billion, up 16% year-on-year, as its sales were also boosted by a doubling of throughput from its biorefining business and a 24% increase in renewable capacity owned by its utility subsidiary Plentitude.

The strong results come as Eni pushes forwards with the strategic plan it outlined in March through which it aims to cut investment by 20% and refocus its portfolio towards its most profitable assets with a view to increasing payouts to shareholders.

The oil major said it now expects it will be able to accelerate its share buyback plans on the back of its bumper results as it said it will update the market in the third quarter.

Analysts at RBC said the updated plan could see Eni buy back an extra EUR500 million worth of its own shares from shareholders.

Eni is currently aiming to transition into an entirely carbon neutral company by 2050, with a view to reducing direct scope 1 + 2 emissions from its upstream business to net zero by 2030.

The Italian company on Tuesday said it had entered exclusive talks with private equity giant KKR, with a view to selling off a 20-25% stake in its Enilive biofuel unit for between EUR11.5 billion and EUR12.5 billion.

-Louis Goss

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07-26-24 0451ET

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