Eni Boosts 2024 Share Buyback After Strong Q1 Profit

Italian energy giant Eni has announced a significant increase in its planned share buyback for 2024, following a better-than-expected net profit in the first quarter of the year. The company will raise its share repurchase target by 45% to €1.6 billion ($1.71 billion), up from the previous goal of €1.1 billion.

Eni's decision comes on the heels of a strong financial performance in Q1 2024, despite a steep fall in net profit compared to the same period last year. The company reported an adjusted net profit of €1.58 billion, which exceeded analyst expectations of €1.56 billion. This result was supported by a 5% year-on-year growth in hydrocarbon production and the completion of the Neptune Energy acquisition.

Why this matters: Eni's increased share buyback and strong Q1 results demonstrate the company's resilience in the face of challenging market conditions. The move also reflects Eni's commitment to creating value for shareholders and investing in its future growth.

Eni CEO Claudio Descalzi highlighted the company's progress in executing its portfolio transformation, including the closing of the Neptune Energy acquisition and the announced UK-focused combination with Ithaca Energy. "The quarterly performance was excellent, with strong results from the E&P segment, supported by a 5% increase in production compared to last year, and continued growth at Plenitude and Enilive," Descalzi stated.

The company's retail and renewable business, Plenitude, reported a 48% increase in proforma adjusted EBITDA. However, Eni's leverage ratio increased, nearing the upper end of the range outlined in its 2024-27 business plan. CFO Francesco Gattei stated that Eni's leverage will fall in the coming quarters as the group turns to disposals and away from major acquisitions.

Based on the updated scenario, Eni expects full-year operating cash flow to exceed €14 billion, prompting the increase in the planned share buyback. The company also confirmed its full-year hydrocarbon production guidance and raised its expected full-year cash flow from operations to over €14 billion.

Eni's shares initially rose following the announcement but later declined by around 1%, underperforming the Milan blue-chip index. The company is in advanced discussions on some disposals, which are part of its strategy to fund its energy transition and upstream investments.

Key Takeaways

• Eni increases 2024 share buyback target by 45% to €1.6 billion.
• Q1 2024 adjusted net profit of €1.58 billion exceeds analyst expectations.
• Eni's resilience amid challenging market conditions, commitment to shareholder value.
• Plenitude reports 48% increase in proforma adjusted EBITDA, but debt rises.
• Eni expects 2024 operating cash flow to exceed €14 billion, raises production guidance.