Business Context and Reporting Period
Company: Eni S.p.A.
Filing Type: Form 6-K (Report of Foreign Issuer)
Reporting Period: First Quarter 2025 (Ended March 31, 2025)
Release Date: April 24, 2025
Eni reported solid Q1 2025 results driven by improved economic fundamentals, despite macro uncertainty. The period was marked by strategic portfolio management, including the closing of a 30% investment by KKR in Enilive and EIP reaching a 10% stake in Plenitude. The company successfully applied its dual exploration model, securing farm-out agreements with Vitol for the Baleine and Congo FLNG projects.
Key Financial Metrics
| Metric (€ million) | Q1 2025 | Q1 2024 | Change |
|---|---|---|---|
| Proforma Adjusted EBIT | 3,681 | 4,116 | (11%) |
| Adjusted Net Profit (Attributable to shareholders) | 1,412 | 1,582 | (11%) |
| Net Profit (GAAP) | 1,172 | 1,211 | (3%) |
| Adjusted Cash Flow (Before working capital) | 3,414 | 3,896 | (12%) |
| Net Cash from Operations | 2,385 | 1,904 | +25% |
| Organic Capital Expenditure | 1,885 | 1,990 | (5%) |
| Net Borrowings (Ex IFRS 16) | 10,334 | 12,882 | (20%) |
| Leverage (Proforma) | 0.12 | 0.23 | Improved |
Material Changes vs. Prior Period
- Revenue & Profit Decline: Proforma adjusted EBIT decreased 11% year-over-year, primarily due to a ~10% drop in Brent crude prices and continued downturns in downstream refining and chemicals margins.
- Production Mix: Hydrocarbon production averaged 1.65 million boe/d (down 5% YoY). Liquids production was flat (-1%), while natural gas production fell 9% due to divestments and mature field declines, partially offset by ramp-ups in Congo, Italy, and Mozambique.
- Segment Performance:
- E&P: Adjusted EBIT of €3.3 billion (down 2% YoY) due to lower realizations, offset by efficiency gains.
- Refining & Chemicals: Reported a proforma adjusted loss of €334 million (vs. €53 million loss in Q1 2024) driven by deteriorating crack spreads and weak European demand.
- Enilive & Plenitude: Combined adjusted EBIT of €336 million (down 21% YoY), impacted by lower biorefining margins at Enilive.
- Balance Sheet Strengthening: Net borrowings decreased by €1.8 billion to €10.3 billion. Proforma leverage improved to 0.12x, supported by €3.0 billion in proceeds from portfolio monetization (KKR investment in Enilive and EIP investment in Plenitude).
Guidance, Outlook, and Management Commentary
- 2025 Outlook Revision: In response to macro headwinds and trade tariff uncertainty, Eni identified over €2 billion in mitigating actions (capex, portfolio, and cost initiatives).
- Capex: FY 2025 gross capex revised down to below €8.5 billion (from €9.0 billion); net capex seen below €6.0 billion (from €6.5-7.0 billion).
- Cash Flow: FY CFFO before working capital expected at €11 billion based on a revised scenario (Brent $65/bbl, TTF €40/MWh).
- Production: Oil and gas production expected at 1.7 million boe/d.
- Shareholder Returns:
- Dividend: Proposed 5% increase in FY 2025 dividend to €1.05 per share.
- Buyback: Commencement of a new €1.5 billion share buyback program.
- Payment: Fourth tranche of 2024 dividend (€0.25/share) scheduled for May 21, 2025.
- Strategic Developments:
- Indonesia: Establishing a financially independent E&P satellite JV with Petronas targeting 500 kboe/d plateau.
- Cyprus/Egypt: Historic agreement to export Cronos gas resources to Europe via Eni infrastructure.
- Monetization: Farm-out agreements with Vitol for Baleine and Congo FLNG projects expected to generate $2.7 billion in proceeds.
Investor Verification Checklist
- Monetization Closing: Verify the regulatory approval and closing timeline for the Vitol farm-out agreements (Baleine and Congo FLNG) to confirm the $2.7 billion proceeds.
- Downstream Margins: Monitor the trajectory of Standard Eni Refining Margin (SERM) and European chemical sector demand, as these segments remain loss-making and sensitive to macro conditions.
- Capex Execution: Track the execution of the revised €2 billion in cost mitigation measures to ensure the net capex target of below €6 billion is met.
- Dividend Approval: Confirm the approval of the €1.05 per share dividend and the €1.5 billion buyback authorization at the Annual General Meeting (AGM) on May 14, 2025.
- Indonesia JV: Assess the progress of the JV formation with Petronas and the timeline for the 500 kboe/d production plateau.