Eni Announces Future Capital Expenditure and Distribution Plans After Strong Quarter of Earnings

Eni ENI reported adjusted net earnings of EUR 2.5 billion in the fourth quarter of 2022 compared with adjusted net earnings of EUR 1.7 billion the year before. Full-year adjusted net earnings amounted to EUR 13.3 billion in 2022 compared with an adjusted net loss of EUR 4.3 billion the year before.

Eni announced its 2023 shareholder return policy, raising its dividend 7% to EUR 0.94 per share and announcing a share buyback plan of EUR 2.2 billion. The company aims to distribute between 25% and 30% of annual cash flow to shareholders via these methods. In 2022, Eni returned EUR 5.4 billion to shareholders, comprising a dividend of EUR 0.88 per share and share buybacks of EUR 2.4 billion. Our EUR 14.40 fair value estimate and no moat rating are unchanged.

Capital expenditures are forecast to be EUR 9.5 billion for 2023 and EUR 37 billion from 2023-26, 25% of which is going to low-carbon businesses. Eni’s operating cash flow, excluding working capital, decreased to EUR 4.1 billion from EUR 4.6 billion. Net debt excluding leases fell from one year ago to EUR 7.0 billion, implying a gearing ratio of 18% versus 24% the year prior, at the lower end of peers’ range. Capital spending increased to EUR 2.8 billion, falling just below full-year guidance of EUR 8.3 billion.

The exploration and production segment reported an adjusted operating profit of EUR 2.9 billion during the quarter compared with an adjusted operating profit of EUR 3.6 billion the year before, largely due to the derecognition of subsidiaries operating in Angola. Fourth-quarter production fell to 1.62 million barrels of oil equivalent per day from 1.74 mmboe/d the year before on planned and unplanned outages in Kazakhstan, local issues in Nigeria, and lower production in Norway and Egypt. Full-year guidance for 2023 is 1.63 mmboe/d-1.67 mmboe/d from 1.61 mmboe/d in 2022.