Eni closes a first record quarter, also thanks to rising energy prices. In the first three months of 2022, the oil group's net profit jumped to €3,58 billion from €856 million in 2021 and adjusted net profit to €3,27 billion from €270 million. An increase of 3 billion compared to the first quarter of 2021 due "to the ability to capture the significant increase in the realization prices of equity productions (+70% on average)", underlines the oil group. Consolidated adjusted Ebit flies to 5,19 billion, up 300% compared to the same period of 2021. All this despite the fact that hydrocarbon production decreased by 3% to 1,66 million boe/day, a level consistent with the guidance of the 'year.
After the quarterly accounts, above expectations, the title of the six-legged dog in Piazza Affari gains 0,74% to 13,26 euros, in line with the positive intonation of the market.
Eni: in the first quarter of 2022 the adjusted ebit grows by +300%
This performance was driven by strong Exploration and Production results with a adjusted ebit of 4,38 billion euros, an increase of 3 billion compared to the first quarter of 2021.
The segment Global Gas & LNG Portfolio recorded an adjusted Ebit of €0,93 billion, compared to the breakeven of the first quarter 2021, supported by sales growth, better results of the international LNG business in the context of a robust price scenario, and margin optimization by leveraging the flexibility of the gas procurement portfolio.
The R&M (refining and marketing) business achieved a good result (24 million euros), an improvement on the loss of 159 million in the first quarter of 2021. The good performance is linked to the optimization of the plant structures, which made it possible to reduce the utilization of natural gas and utility costs, as well as the good recovery of the refining margin from the second half of March, driven by the strengthening of diesel, due to scarce availability on the market.
While the chemical business managed by Versalis showed a weak trend with a deterioration of -154 million euros compared to the comparison period, penalized by the increase in the prices of the oil feedstock and by the higher costs of the industrial utilities.
The retail, renewable & electric mobility business managed by Plenitude is well positioned to achieve the annual guidance of adjusted ebitda (over 0,6 billion euro) despite the volatility of the current context.
Eni: Cash flow and debt in the first quarter of 2022
Il adjusted net cash flow before working capital at replacement cost was €5,61 billion “supported by the solid performance of the core businesses (+186% compared to the first quarter of 2021)”. The cash flow of the quarter benefited from the finalization of the share placement of the subsidiary Var Energi with proceeds for Eni of approximately 0,4 billion.
After organic capex funding of €1,62 billion, up slightly from Q2021 XNUMX, and net working capital needs, the group achieved a organic free cash flow of 1,8 billion. The seasonal factors that typically determine the need for net working capital in the first quarter led to a cash absorption of 1,96 billion, which reflects the higher nominal value of trade receivables.
Non-organic cash requirements of 1,25 billion refer to the Plenitude acquisitions (0,8 billion) and the capital contribution to the JV Saipem (0,46 billion) as part of the financial restructuring of the subsidiary.
Net financial debt pre IFRS 16 as at 31 it stood at 8,62 billion euro; instead leverage continues to strengthen with a value of 0,18 against 0,20 as at 31 December 2021.
CEO Descalzi: "Solidity and resilience in an uncertain context"
"The quarter was characterized by significant strategic developments for Eni", commented the CEO Claudio Descalzi, retracing the major operations undertaken by the group. “We have successfully completed the listing process of our Norwegian upstream subsidiary, Var Energi, of which we now hold 64%, and we launched the integration operation with BP of the respective relevant upstream portfolios in Angola. Plenitude, our subsidiary that integrates renewable energies with retail gas&power, proceeds towards listing by 2022, subject to market conditions and we have announced the forthcoming establishment of a company for the Sustainable mobility which will combine our biorefineries, our network of multi-product, multi-service outlets and related customers”. And finally, the CEO recalled the completion "of the initial subscription offer on the London list of Neoa shares, a vehicle that will identify acquisition opportunities in the decarbonisation and energy transition sectors", as well as all the agreements for increase gas supplies, such as Angola and Congo.
As for the results, for Descalzi the six-legged dog, he demonstrated "solidity and resilience in a context of extreme price volatility and uncertainty due to the ongoing war and international tensions", added the number one of Eni .
Guidance increased: for the moment no break with Gazprom
Eni has revised upwards the guidance of the adjusted operating profit of the Global Gas & LNG Portfolio, expected at approximately 1,2 billion euro compared to the previous target of 900 million considering the expected evolution of the market. This was announced by the group, adding that these "operating and financial forecasts for the 2022 financial year have been defined on the basis of information currently available, management estimates relating to possible risks and uncertainties associated with the current war situation in Ukraine and assuming no significant disruption in gas flows from Russia."
As regards hydrocarbon production, the forecast of 1,7 million boe/day at a scenario of 80 dollars a barrel in 2022 has been confirmed.
S&P Global Ratings assigns BBB with stable outlook to Plenitude
The S&P Global agency has assigned Plenitude – a subsidiary of a company linked to renewable energies – the preliminary long-term rating of “BBB” with a stable outlook. The report underlines that “the stable outlook reflects the expectation of experts that the utility will be able to leverage its initial competitive advantage in the retail sector and in the production of renewable energy, with a ratio of funds from operation (FFO) to debt of about 25% from 2022-2024”.
