Eni SPA has finalized its share repurchase program for 2024, earmarking EUR 1.6 billion ($1.7 billion) with an option to raise the package to up to EUR 3.5 billion ($3.8 billion). The option to pump up the program relies on “upside scenarios”, Italian government-controlled Eni said in a statement Thursday. The program is to be completed by April 2025. “The First Tranche will concern up to a maximum of 6.4 million of Eni’s shares (approximately 0.2 percent of share capital), up to a total maximum of €150 million [$162.7 million] to be used for the implementation of the 2024-2026 Employee Stock Ownership Plan”, Eni said. The first tranche will launch before this month ends, as decided at Eni’s annual general meeting last May 14. Eni’s annual dividend has been raised six percent to EUR 1 ($1.08) per share, to be distributed in four equal installments, as decided at the yearly assembly.
Eni completed its 2023 buyback program last March, regaining 153.5 million units for EUR 2.2 billion ($2.4 billion). Eni plans to raise shareholder payout, in the forms of dividends and buybacks, to 30–35 percent of cash flow from operations (CFFO) from 25–30 percent previously for the 2024–27 period. “Over the 4-year Plan period distributions are equivalent to 40 percent of the current market capitalization”, Eni said in a press release March 14 announcing its strategic plan. The new plan set a target net capital expenditure of EUR 7 billion ($7.6 billion) yearly from 2024 to 2027, down over 20 percent compared to last year’s plan.
The new plan focuses on capital discipline through “optimization, improved project quality and greater portfolio management”, Eni said at the time. Eni expects to generate about EUR 13.5 billion ($14.6 billion) in CFFO before working capital this year and EUR 62 billion ($67.3 billion) over 2024–27 with a 30 percent growth. Eni sees upstream production growing by a compound annual rate of three to four percent in the four years.
At Enilive, Eni’s biofuel and sustainable mobility business, Eni expects to raise pro-forma earnings before income tax, depreciation and amortization (EBITDA) by 20 percent yearly to reach over EUR 1.6 billion ($1.7 billion) in 2027. “Biorefining capacity is seen at over 3 MPTA by 2026 (2x end-2023) and over 5 MTPA by 2030, with more than 1 MTPA SAF [sustainable aviation fuel] optionality by 2026, and the potential to double by 2030”, Eni said. “Eni’s agribusiness will grow to account for over 35 percent of the Company’s Italian throughputs by 2027”.
Meanwhile Plenitude, Eni’s renewable energy arm, targets EUR 2 billion ($2.2 billion) in pro-forma EBITDA in 2027. Eni anticipates an increase from the current three gigawatts (GW) to four GW in renewable generation capacity this year, and eight GW in 2027. For Eni’s chemical production arm, the company said, “The restructuring and transformation of Versalis will lead to the EBITDA reaching breakeven in 2025, and to positive EBIT in 2026, representing an improvement of over €600 million [$652 million] to the Group”. For the first quarter of 2024 Eni reported EUR 1.6 billion ($1.7 billion) in net profit adjusted for extraordinary or nonrecurring items, down 46 percent year-on-year driven by lower gas prices.
Eni logged EUR 3.9 billion ($4.2 billion) in CFFO before changes in working capital at replacement cost, down 26 percent. Organic free cash flow totaled EUR 1.9 billion ($2.1 billion). In the first quarter of 2024, capital expenditure totaled EUR 2 billion ($2.2 billion), “in line with a FY figure of around €9Bln taking into account this period is historically lighter on spending”, chief financial officer Francesco Gattei said in prepared remarks for the company’s earnings call April 24. Eni’s hydrocarbon production in the January–March 2024 quarter rose five percent year-on-year to 1.7 million barrels of oil equivalent per day. However sales fell 16 percent year-on-year to EUR 22.9 billion ($24.8 billion).
Source: rigzone.com