E

ENI S.p.A. Form 6-K Summary: Interim Consolidated Report (H1 2024)

Business Context and Reporting Period

This filing covers the interim consolidated report for the period ended June 30, 2024, filed on August 2, 2024. Eni S.p.A. is an integrated energy company focused on a just energy transition, operating across Exploration & Production (E&P), Global Gas & LNG, Refining, Chemicals, Power, and transition businesses (Enilive and Plenitude). The period was characterized by a mixed market environment with higher crude oil prices offset by lower natural gas prices and weaker chemical margins.

Key Financial Metrics

*Note: H1 2023 organic free cash flow calculated as Operating Cash Flow minus Organic Capex (€4,676m) based on available data.

Material Changes vs. Prior Period

• Revenue Decline: Sales decreased primarily due to a 40% drop in natural gas prices and lower gas volumes, partially offset by a 5% increase in Brent crude prices.
• Profitability Pressure: Adjusted net profit fell 36% due to lower income from investments (absence of one-off gains from prior year pipeline sales), higher tax rates (52% vs 44%), and weaker performance in the Global Gas & LNG Portfolio (down 74%) and Chemicals (loss of €390 million).
• Production Growth: Hydrocarbon production increased 5% year-over-year to 1.726 million boe/d, driven by the Neptune Energy acquisition, ramp-ups in Côte d'Ivoire and Mozambique, and higher Libyan output.
• Transition Growth: Enilive bio throughputs more than doubled (+145%), and Plenitude renewable capacity grew 24% to 3.1 GW.
• Balance Sheet: Net borrowings increased to €12.1 billion (ex-IFRS 16) largely due to the cash outflow for the Neptune Energy acquisition (€2.3 billion), though leverage remains on a descending trajectory.

Guidance, Outlook, and Management Commentary

• Full Year Guidance Raised:
  • Proforma Adjusted EBIT: Raised to approximately €15 billion.
  • Adjusted CFFO (ex-working capital): Expected to exceed €14 billion.
  • Organic Capex: Confirmed at approximately €9 billion.
• Shareholder Returns:
  • Dividend: Approved €1.00 per share for FY2024 (6% increase). First quarterly installment of €0.25 payable September 25, 2024.
  • Buyback: €1.6 billion program for 2024 confirmed; management aims to accelerate the pace. Potential for an additional €500 million buyback in Q3 if debt levels allow.
• Strategic Milestones:
  • Finalized acquisition of Neptune Energy.
  • Agreement with Ithaca Energy for a UKCS combination.
  • Exclusivity agreement with KKR to sell 20-25% of Enilive (valuation €11.5-12.5 billion).
  • Completion of divestment of onshore Nigeria activities and agreement to sell Alaska properties.
• Risks: Key risks include geopolitical instability (Ukraine, Middle East), volatility in hydrocarbon prices, regulatory changes regarding climate change, and execution risks in low-carbon investments.

Investor Verification Checklist

• Neptune Integration: Verify the timeline and cost synergies realized from the Neptune Energy acquisition.
• Enilive Valuation: Monitor the progress of the KKR transaction and the final valuation of the 20-25% stake.
• Chemical Segment Turnaround: Assess the outlook for Versalis given the continued adverse market conditions and reported losses.
• Debt Reduction: Track the execution of the divestment program (targeting €8 billion net proceeds over four years) to ensure leverage returns to the target of below 20%.
• Gas Price Exposure: Evaluate the impact of sustained low European gas prices on the Global Gas & LNG Portfolio profitability.