Eni closes the first quarter, with “a robust recovery of results”, to quote Claudio Descalzi, and turns on the green light to enhance the new Eni gas and electricity and renewables business unit through the listing or sale of a minority package of the corporate vehicle born from the integration between the two activities. The accounts thus go on file, thanks above all to the push that comes from exploration and production, as well as from chemistry, with a clear improvement in the numbers, starting with the net result which returns to positive territory after the slowdown in recent months caused by the pandemic .
Quarter on file with improved accounts
And here they are the numbers approved by the group: adjusted operating profit of 1.32 billion, up compared to the fourth quarter of 2020 (+ 171%) while the increase over the same period of 2020 is 1 percent, adjusted net profit of 270 million equal to almost five times that achieved in the first quarter of 2020. Looking, then, at the figure net of extraordinary items, there is also a return to profit on this front for 856 million from the loss of 2.92 billion in the same period of 2020. The operating cash flow before working capital at replacement cost is equal to 1.96 billion compared to net capex of 1.4 billion (-27% from the first quarter of 2020). Hydrocarbon production in the first quarter stood at 1.704 million barrels per day, down by 4% compared to the first quarter of 2020. Debt, before IFRS16 (leasing), was 12.2 billion, an increase of 671 million compared to figure recorded at the end of 2020 (11.5 billion).
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Descalzi: strong recovery of results
«In a first quarter still strongly characterized by the effects of the lockdowns, Eni highlighted a robust recovery in results, in particular in the E&P and chemical sectors, commented the number one Descalzi who lined up the main indicators of this first quarter. «The growth of our G&P retail business continues (+ 19% Ebit compared to 2020), thanks to the expansion of power customers and extra-commodity services. On the other hand, R&M performance was penalized by the reduced demand for fuels in Europe, resulting from the pandemic, and by a negative refining margin. In the context of a complex scenario, the adjusted EBIT at group level of 1.3 billion is in line with the first quarter of last year and is almost tripled compared to the end of 2020. The growth in net profit is also consolidated, equal to 270 million, almost fivefold compared to the same quarter of 2020. The quarter recorded an organic cash generation before the change in working capital of approximately 2 billion, clearly higher than the investments of the period of 1.4 billion ”.
The CEO: we are looking forward to the next few months with optimism
The CEO then anticipated the possible trend of the coming months. «The progressive improvement of the pandemic and economic situation on a global level allows us to look with optimism to the next few months and to foresee a generation of free cash flow in the year of more than 3 billion based on current Brent prices of 60 dollars / barrel. In this context, we will continue to pursue our energy transition and decarbonisation strategy, ensuring the strengthening of our capital structure and a competitive distribution policy for our shareholders ».
Go to the enhancement of Eni gas and electricity and renewables
Together with the accounts, the board of directors also fired, as mentioned, the enhancement plan of the new company that will arise from the union of the retail and renewable energy activities. The process will begin in 2022 and the options under consideration, the group clarifies, “include the listing on the stock exchange through an initial public offering (IPO), or the sale or exchange of a minority share”. To date, Eni has around 10 million customers, which it considers “an important source of value for the company”. The merger of the retail and renewable activities, whose development plan provides for a significant increase in installed capacity, explains Eni, “will maximize the creation of value by expanding the offer of services, infrastructures and green energy directly to large retail customers”. The new company aims to develop a “green” electricity generation capacity exceeding 5 gigawatts by 2025: “This capacity will be offered to the growing customer base, of over 11 million by that date, with an overall EBITDA expected to grow from 600 million euros in 2021 to over 1 billion euros in 2025 “.