By Francesca Landini
MILAN (Reuters) – Italian energy group Eni reported a 46% slide in fourth-quarter adjusted net profit on Thursday, hit by lower energy prices and weakness at its refining, biofuel and chemicals divisions.
Adjusted net profit for October and December totalled 892 million euros ($934 million), below an analyst consensus of 960 million euros compiled by the company and down from 1.66 billion euros in the fourth quarter of 2023.
Eni said its pro-forma leverage, which measures total debt in relation to equity taking into account also agreed disposals yet to be completed, fell to 15% at the end of last year.
“Our portfolio actions mean our pro-forma leverage is now an historically low 15%, enabling us to continue to invest in the business and reward our shareholders through the cycle,” CEO Claudio Descalzi said in a statement.
Eni shares were down 2.2% in early trade, underperforming a 1.5% drop in Milan’s blue chip index.
Descalzi has developed a strategy based on dedicated units – or satellites – that aim to independently access capital markets to fund their growth.
In 2024 the group opened up the capital of both its renewable and retails unit Plenitude and its biofuel company Enilive prompting investments by Swiss asset manager Energy Infrastructure Partners and U.S.-based KKR respectively.
Underlying cashflow from operations (CFFO) in the fourth quarter beat the consensus forecast, coming in at 2.89 billion euros.
Capital expenditure amounted to 2.7 billion euros, for a full-year total of 8.8 billion euros, below the company’s guidance.
Full-year oil and gas production came in at the top end of the guidance with an increase of 3%, driven by the acquisition of Neptune Energy.
Pro-forma adjusted earnings before interest and taxes (EBIT) at Eni’s exploration and production (E&P) division fell 17% year on year to 2.78 billion euros in the fourth quarter.
Low-carbon units Enilive and Plenitude posted a total pro-forma adjusted EBIT of 133 million euros in the fourth quarter, down 17% from 2023.
Refining and chemicals reported an operating loss of 275 million euros, significantly higher than in the previous year.
Pro-forma adjusted EBIT at the gas and LNG business (GGP) more than halved to 279 million euros.
“At the EBIT level, some of the softness was driven by weaker results from Plenitude and Enilive. GGP results also did not see as large a seasonal increase as we expected,” Royal Bank of Canada analyst Biraj Borkhataria said.
Eni will present its updated strategy and unveil its distribution policy at a virtual capital markets day starting at 1300 GMT.
The Italian group also said it signed a memorandum of understanding with Malaysia’s state energy firm Petroliam Nasional Bhd (Petronas) to create a joint venture to oversee some upstream assets in Indonesia and Malaysia.
($1 = 0.9551 euros)
(Reporting by Francesca Landini, editing by Gianluca Semeraro, Valentina Za and Susan Fenton)
