Eni Plans Further Shareholder Payouts, Lower Investment — Update

By Adria Calatayud

Italy's Eni outlined plans to reduce investment through 2027 and continue returning cash to shareholders, as the energy major seeks to position itself for the energy transition.

The company said Thursday that it had completed the key merger-and-acquisition investments needed to support its strategy and that it would try to balance investments with improved shareholder returns. Eni--which recently expanded its natural-gas business through the acquisition of Neptune Energy--is targeting cost savings from corporate functions as well.

European oil-and-gas producers have been ramping up their payouts to shareholders even as energy prices cool. Before Eni, larger peers Shell, BP, TotalEnergies said in recent weeks they would keep cash returns flowing.

Eni aims to return 40% of its current market capitalization--which stood at 50.10 billion euros ($54.86 billion) as of Wednesday's close--to shareholders until 2027, having already returned 20% over the past two years, it said.

For 2024, the company said it would launch a share buyback of EUR1.1 billion and raise its dividend to EUR1.00 a share from EUR0.94.

"Ultimately, it's evident that the energy transition can only become real if it creates material and sustainable returns and enables new forms of profitable business," Eni Chief Executive Claudio Descalzi said.

Pro forma earnings before interest and taxes are expected to be around EUR13 billion this year and rise around 25% in 2027, Eni said.

The company expects overall net capital expenditure over the 2024-27 period to amount to EUR27 billion, which compares with EUR37 billion for the 2023-26 plan it presented last year.

Eni is looking to speed up asset sales, particularly in its upstream segment. The company expects upstream production to grow by an average of 2% annually over the plan period, and by 3% to 4% when adjusting for divestments.

The company said it is targeting corporate cost savings of EUR1.8 billion over the four-year plan.

It also said cash flow from operations before working capital is forecast to be EUR13.5 billion this year, and to rise 30% above that level in 2027. Energy-transition businesses Enilive and Plenitude are expected to contribute to that growth, Eni said.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

March 14, 2024 10:48 ET (14:48 GMT)

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