## ENI S.p.A. Reports Q3 EBIT Decline, Boosts Share Buyback, and Expands into Lithium-Ion Battery Market
Italian energy giant ENI S.p.A. has revealed its financial performance for the third quarter, reporting a 14% year-over-year decline in pro forma adjusted EBIT, reaching €3.4 billion ($3.68 billion). This dip is primarily attributed to lower oil prices, which impacted the company’s upstream operations. Despite the decline in earnings, ENI demonstrated resilience with a 2% increase in hydrocarbon production, reaching 1.661 kboe/d ($1.80 kboe/d). The company’s commitment to renewable energy is evident in the installed capacity from renewables, which stood at 3.1 GW by the end of the quarter.
ENI’s exploration and production (E&P) segment recorded a 5% decline in pro forma adjusted EBIT, reaching €3.2 billion, due to lower realizations stemming from the aforementioned decrease in crude oil prices. Conversely, the Global Gas & LNG Portfolio segment saw a significant 65% increase in pro forma adjusted EBIT, reaching €0.25 billion. This positive performance can be attributed to a more favorable trading environment and the positive outcome of a negotiation/settlement.
The company’s adjusted net profit for the third quarter amounted to €1.27 billion, reflecting a 30% decline from the same period last year. However, this figure surpassed analyst expectations, which projected €1.08 billion (per Reuters).
CEO Claudio Descalzi emphasized ENI’s strategic direction: “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.” He also highlighted the company’s commitment to attracting investment, stating: “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.”
Looking ahead, ENI projects hydrocarbon production to reach around 1.70 million boe/d, compared to the upper end of the previously projected range of 1.69 – 1.71 million boe/d. This forecast is based on an expected Brent price of $83/bbl. The company now anticipates a pro forma adjusted EBIT of €14 billion for the year, compared to the previous estimate of around €15 billion. Adjusted CFFO before working capital is projected to be €13.5 billion, down from the earlier expectation of exceeding €14 billion.
In a significant move, ENI has announced plans to increase its 2024 share buyback program to €2 billion, representing a 25% increase from the previous guidance of €1.6 billion and more than 80% higher than the original plan for the year. This decision underlines ENI’s commitment to enhancing shareholder value. Furthermore, the company anticipates a quarterly dividend of €0.25 per share, payable on November 20, 2024, following shareholder approval of a €1 per share dividend for FY 2024 (a 6% increase from 2023).
Beyond its core energy operations, ENI has made a strategic foray into the lithium-ion battery market. The company has entered into an agreement with SERI Industrial 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. This move signals ENI’s commitment to expanding its presence in the growing clean energy sector.
ENI’s share price closed up 1.36% at $31.32 on Friday, reflecting investor confidence in the company’s strategic direction and future prospects.