Italy's Eni Raises Share Buyback to 2.8 Billion Euros

Italy's Eni nearly doubles buyback on stronger commodity outlook

Eni's Financial Performance and Strategic Moves in 2024

By Francesca Landini

First Quarter Results and Analyst Reactions

MILAN, April 24 (Reuters) - Italian energy group Eni nearly doubled its share buyback to 2.8 billion euros ($3.27 billion) and improved its 2026 guidance on cash flow on Friday, betting on a long-lasting effect of the Iran war on oil and gas prices.

State-controlled Eni reported first-quarter adjusted net profit of 1.3 billion euros, down from 1.4 billion euros in the same period last year, which had benefited from one-off income, and below an analyst consensus forecast of 1.5 billion euros provided by the company.

Analysts pointed to maintenance at refining sites and continued margin pressure on Eni's chemical business as reasons for the lacklustre performance in the first quarter.

Market Expectations and Peer Performance

"Heavy planned maintenance in the downstream businesses sees Eni first quarter earnings below market expectations, albeit perhaps setting up for a better Q2," said Citi analysts.

Earlier this month, Eni's European rivals flagged their trading desks reaped billions of dollars from the energy supply crunch caused by the U.S.-Israeli war with Iran, helping offset the conflict's impact on their production operations.

Eni's CEO recently said the group was considering an alliance with a commodity trader to create its own trading business.

Commodity Outlook and Production Growth

Positive View on Oil and Gas Prices

POSITIVE VIEW ON OIL, GAS PRICES

The Italian group revised up its expectations for Brent crude, gas prices and refining margin in 2026, predicting that the surge in commodity prices would continue.

The company's shares opened 1% higher.

Share Buyback and Cash Flow Guidance

The share buyback was hiked on the back of an improved macro scenario coupled with a more positive view on underlying cash flow for the year, the company said.

Oil and gas production grew by 9% in the quarter, driven by project ramp-ups in West Africa, Norway and startups in Angola, as well as good operational continuity, offset by some limited impact from Middle East disruptions.

Exploration added around 1 billion barrels of oil equivalent of fresh resources, with discoveries in Angola, Ivory Coast and Libya.

"Thanks to our high-quality and diversified asset portfolio... E&P low breakeven prices and resilient financial structure, with gearing at historic lows, we are uniquely positioned to capture scenario improvements and to share expected upside with shareholders," CEO Claudio Descalzi said.

Refining and Chemicals Performance

Refining and Chemicals in the Red

REFINING AND CHEMICALS IN THE RED

The refining business posted a slight improvement but reported a loss as lower throughputs more than offset better products crack spreads.

Eni's chemicals business signalled a reduction in losses but the turnaround was still to come.

Debt and Financial Position

Net debt was 10.8 billion euros at the end of March, with proforma gearing at 15%, in line with a targeted range of 10%-15%.

($1 = 0.8563 euros)

(Reporting by Francesca Landini, editing by Gianluca Semeraro and Elaine Hardcastle)