Eni Lifts Profit Guidance after Q3 Beats Expectations

Italian energy group Eni raised its guidance on Friday for full-year earnings before interest and taxes (EBIT) and cash flow, while also announcing an acceleration of its share buyback program.

The group beat analysts' expectations for third-quarter adjusted net profit thanks to a better-than-anticipated performance from its exploration and production (E&P) division and its low-carbon unit Plenitude.

Following Russia's invasion of Ukraine last year, Eni has been working to diversify its global gas portfolio, with new discoveries and recently-signed LNG contracts. It has also grown its renewable capacity and pressed on with the development of its biofuel business. 

Adjusted net profit in the period came in at 1.82 billion euros, exceeding a company-provided analyst consensus of 1.63 billion euros. That was down from a bumper result of 3.73 billion euros a year ago, when energy prices surged in response to the Ukrainian war. 

Adjusted EBIT was 3.01 billion euros, above a consensus of 2.85 billion euros.

"We are raising our full-year guidance of EBIT and cash flow, while accelerating our buyback plan for this year," Chief Executive Claudio Descalzi said in a statement.

Eni shares were up 1.15% at 0845 GMT, outperforming a 0.55% rise in Milan bluechip index.

"Eni has reported a robust set of results today, with adjusted EBIT 6% ahead of consensus," said analysts at Royal Bank of Canada.

"The key drivers of the beat were better upstream results, as well as a surprisingly strong result from Eni's Plenitude division."

BUYBACK ACCELERATION

Adjusted EBIT guidance for 2023 was raised to about 14 billion euros from a previous 12 billion, reflecting improved market conditions and better underlying business performance.

The group also revised up its full-year guidance for core earnings at Plenitude to 900 million euros from 700 million.

Eni's 2.2-billion-euro share buyback, which began in May, will accelerate in the final months of 2023, compared to initial plans, the company said.

Following new discoveries, the initial target of 700 million barrels of oil equivalent of hydrocarbon resource additions will be exceeded this year, the group said.

JP Morgan said that an improved performance at Eni's upstream business and the assumption of higher oil and gas prices could lead to rosier expectations for the group's results in the last quarter.

The unfolding of the Middle East crisis has pushed up the price of natural gas up with Brent price close to $90 a barrel.

(Reuters - Reporting by Francesca Landini; Editing by Gavin Jones, Clarence Fernandez and Keith Weir)

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