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ENI S.p.A. First Quarter 2022 Results Summary

Business Context and Reporting Period

This Form 6-K filing reports the unaudited consolidated results for ENI S.p.A. for the first quarter ended March 31, 2022. The results were approved by the Board of Directors on April 29, 2022. The reporting period was characterized by high market volatility and geopolitical tensions linked to the war in Ukraine, which significantly impacted energy prices. ENI leveraged its global upstream portfolio to secure alternative gas supplies for Europe, signing new agreements in Algeria, Egypt, and the Republic of Congo.

Key Financial Metrics

Material Changes vs. Prior Period

• Exploration & Production (E&P): Adjusted operating profit surged to €4,381 million (up 218% YoY) driven by a 67% increase in Brent prices and a 426% increase in spot gas prices. Realized prices for liquids and gas rose 64% and 135% respectively. Production volumes decreased slightly by 3% to 1.65 million boe/d due to declines in Libya, Nigeria, and Norway, offset by ramp-ups in Indonesia and Egypt.
• Global Gas & LNG Portfolio (GGP): Turned from a loss of €30 million in Q1 2021 to a profit of €931 million. Growth was driven by higher gas sales volumes, strong international LNG results, and margin optimization.
• Refining & Marketing (R&M): Improved from a loss of €159 million to a profit of €24 million. This turnaround was due to plant optimizations reducing gas utility costs and a rebound in refining margins in late March. Conversely, the Chemicals segment (Versalis) reported a loss of €115 million due to high feedstock costs.
• Plenitude & Power: Adjusted operating profit was €185 million, down 8% YoY, primarily due to a challenging trading environment, though renewable electricity sales volumes increased significantly.

Guidance, Outlook, and Risks

2022 Guidance Updates:

• GGP Adjusted EBIT: Revised upward to approximately €1.2 billion (previously €0.9 billion).
• Downstream Adjusted EBIT: Revised to positive (previously expected to be negative).
• Adjusted Cash Flow: Expected at €16 billion (based on $90/bbl Brent), up from the previous guidance of >€15 billion.
• Organic Capex: Confirmed at €8 billion.
• Leverage: Expected to remain well below the 0.20 ceiling by year-end.

Strategic Developments:

• Completed the listing of Vår Energi (Norway), retaining a 64% stake.
• Launched Azule Energy, a 50/50 joint venture with BP in Angola.
• Announced the planned IPO of Plenitude in 2022, subject to market conditions.
• Established a Sustainable Mobility entity integrating biorefineries and multi-energy outlets.

Risks and Contingencies:

• Geopolitical Risk: Outlook assumes no material disruptions in Russian gas flows; ongoing war in Ukraine remains a primary uncertainty.
• Regulatory Risk: Management estimated a charge for a potential Italian windfall tax on energy company extra-profits, pending further legislative guidance.
• Market Volatility: High volatility in commodity prices and exchange rates (EUR/USD) impacts cash flow and margins.

Investor Verification Checklist

• Windfall Tax Impact: Verify the final legislative details and financial impact of the Italian windfall tax on energy profits.
• Plenitude IPO Timing: Monitor market conditions for the execution of the Plenitude listing, which is a key value-creation milestone.
• Gas Supply Agreements: Track the operational ramp-up of new gas agreements in Algeria, Egypt, and Congo to ensure projected volumes reach Europe.
• Refining Margins: Assess the sustainability of the R&M turnaround given the volatility in gasoil margins and natural gas utility costs.
• Non-GAAP Reconciliations: Review the reconciliation of Adjusted EBIT/Net Profit to GAAP figures, specifically regarding inventory holding gains/losses and commodity derivative fair value adjustments.