London, 16 February 2024, (Oilandgaspress): –Eni’s Board of Directors, chaired by Giuseppe Zafarana, yesterday approved the unaudited consolidated results for the full year and the fourth quarter of 2023.
Financial highlights of the fourth quarter 2023
Notwithstanding a volatile scenario featuring both weaker Brent (down by 5% from Q4 ‘22) and natural gas prices (down 57% for the European benchmarks), in Q4 ’23 Eni’s adjusted profit before tax was €3.2 bln (with a FY adjusted profit before tax of €15.1 bln), signaling a robust Group performance driven by strong operational execution and financial discipline.
- Proforma adjusted EBIT[1] for Q4 ’23 was €3.8 bln (with a remarkable €17.8 bln in the FY) driven by steady E&P results, a record-breaking GGP performance and a positive contribution from Plenitude.
- E&P earned €2.4 bln of adjusted EBIT in Q4 ’23, down 17% from Q4 ’22 affected by weaker realized prices, partly offset by a strong rebound in hydrocarbon production, up by 6% to 1.71 mln boe/d in the quarter.
FY ’23 E&P adjusted EBIT was €9.9 bln (versus €16.5 bln in the FY ’22) reflecting weaker hydrocarbons realization and the effect of the deconsolidation of Azule. Including the contribution of JV/associates, proforma adjusted EBIT for the FY was €13.3 bln (versus €20.9 bln in 2022). - Q4 ’23 GGP adjusted EBIT was €0.68 bln and included the favorable outcome of an arbitration procedure. FY ’23 adjusted EBIT was a record €3.2 bln, up by 57% compared with 2022, driven by an optimized natural gas and LNG portfolio and contract renegotiations benefits, while maintaining stability and reliability of supplies to European markets and compensating for the reduction of Russian volumes. Including the contribution of JV SeaCorridor, proforma adjusted EBIT for the FY was €3.4 bln.
- Enilive delivered €0.12 bln of adjusted EBIT in the Q4 ’23, up by 5% y-o-y, €0.73 bln in the FY ’23 (up by 8%) benefitting from a resilient marketing performance. Proforma adjusted EBITDA in the FY ’23 was €1 bln in line with the Company’s guidance.
- Refining Q4 ’23 results were impacted by negative trends in the refining scenario, with the SERM falling by 40% y-o-y and narrower spreads between heavy/sour vs. light/sweet crudes, with an adjusted EBIT of €0.03 bln compared with €0.36 bln in Q4 ‘22 (€0.44 bln in FY ’23 compared with €1.51 bln in FY ‘22).
- Plenitude & Power delivered €0.11 bln of adjusted EBIT in Q4 ‘23, down 6% year-on-year, impacted by lower marketing margins for both renewables and gas-fired plants. FY ’23 adjusted EBIT was €0.68 bln, up 11% leveraging on strong performance in the retail business and the material ramp-up in renewable capacity. Plenitude’s proforma adjusted EBITDA in the FY ’23 was €0.93 bln well ahead of the original EBITDA guidance.
- Versalis reported an adjusted operating loss of €0.24 bln in Q4 ’23 (a loss of €0.61 bln in the FY ’23). The negative performance was driven by a weak macro environment and higher production costs in Europe.
- Q4 ’23 adjusted net profit attributable to Eni shareholders was €1.64 bln, with a Group tax rate of about 48%. In the FY ’23 adjusted net profit attributable to Eni shareholders was €8.30 bln and a Group tax rate of about 44%.
- In Q4 ’23, Group adjusted operating cash flow before working capital at replacement cost was €3.6 bln, exceeding outflows related to organic capex of €2.4 bln, and resulting in an organic free cash flow “FCF” of €1.2 bln. In the FY ’23, adjusted cash flow was €16.5 bln, exceeding outflows related to capex of €9.2 bln, resulting in an organic FCF of around €7.3 bln. In addition to fund WC requirements, the organic FCF was deployed to return cash to shareholders through dividends (€3 bln) and a share repurchase program (€1.8 bln), and to pursue strategic M&A opportunities to accelerate growth in the decarbonization businesses (€2.4 bln), including the Chalmette deal in the USA, the acquisition of Novamont control and the purchase of gas assets in Algeria.
- Net borrowings ex-IFRS 16 as of December 31, 2023, were €10.9 bln, an increase of around €3.9 bln from December 31, 2022. Group leverage stood at 0.20, versus 0.13 as of December 31, 2022.
- In November 2023, the second out of four instalments of the dividend for the fiscal year 2023 of €0.23 per share was paid for a total consideration of €0.75 bln. The third instalment of the 2023 dividend of €0.24 per share was resolved at the same Board meeting and is scheduled to be paid on March 20, 2024.
- In September, the second tranche of the 2023 share buy-back program was launched contemplating a maximum cash out of €1.375 bln (or a maximum number of 275 mln shares, approximately 8% of the share capital) to be executed by April 2024. Through February 9, 2024, 84.5 mln shares have been purchased for a cash outlay of €1.275 bln.
- In December, Plenitude and Energy Infrastructure Partners (EIP) signed an agreement which allows EIP to acquire a 9% interest in Plenitude through a reserved share capital issuance with net proceeds to Eni’s subsidiary of up to €0.7 bln. The transaction, expected to be finalized early in 2024, is recognizing an implied enterprise value of Plenitude of around €10 bln and will strengthen Eni’s consolidated financial structure and leverage. As at December 31, 2023, Plenitude’s net debt was about €2.2 bln.
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