Eni Earnings: Higher Volumes Can't Offset Lower Oil Prices and Weak Gas Results

Eni’s third-quarter adjusted net earnings fell to EUR 1.8 billion compared with adjusted net earnings of EUR 3.7 billion the year before as strong refining margins were not enough to offset the impact of lower oil and gas prices. Eni reported operating cash flow, excluding working capital, of EUR 3.4 billion compared with EUR 5.5 billion a year before. Net debt excluding leases rose to EUR 8.7 billion, implying a gearing ratio of 19% compared with 18% at year-end 2022. Capital spending was EUR 1.9 billion, with management reiterating guidance of EUR 9.0 billion for the year. Eni again left its shareholder payout guidance unchanged for 2023: a dividend of EUR 0.94 per share and EUR 2.2 billion in share buybacks. Our fair value estimate and moat rating are unchanged.