Eni ups share buyback on Q1 profit beat, but debt rises
MILAN, April 24 (Reuters) - Italian energy group Eni said on Wednesday it would raise its planned 2024 share buyback by 45% to 1.6 billion euros ($1.71 billion) after first-quarter net income beat expectations.
Adjusted net profit fell 46% to 1.58 billion euros, just above the analyst consensus of 1.56 billion in a company-provided forecast for the first three months of the year.
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In the first quarter of last year, adjusted net income rose to 2.91 billion euros on the back of much higher natural gas prices in Europe.
However, the group's leverage ratio increased, coming close to the top end of the range indicated for the 2024-27 period.
Hydrocarbon output grew 5% on the year, supporting the performance of the group's exploration and production business.
This was partly related to completion of the acquisition of upstream company Neptune Energy, the Italian group said.
"The results put the company firmly on track to exceed the full-year earnings and cash flow guidance as we work to efficiently grow the upstream, profitably develop the businesses tied to the energy transition, and work to fully capture the market scenario," CEO Claudio Descalzi said in a statement.
Based on the group's updated scenario, Eni now expects full-year cash flow from operations to exceed 14 billion euros, compared with guidance of 13.5 billion euros indicated in its mid-March capital markets update.
As a consequence, Eni raised the 2024 share buyback to 1.6 billion euros from 1.1 billion euros.
"The key drivers of the earnings beat were higher earnings from Plenitude, with Eni citing higher retail commodity margins, as well as the ramp-up in its renewable portfolio," said Biraj Borkhataria, head of global energy transition research at RBC Europe.
"Elsewhere, upstream volumes and earnings came in higher than expectations."
Eni's retail and renewable business Plenitude reported a proforma adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 346 million euros, up 48% from the first quarter last year.
The leverage of the group rose to 0.23 at the end of March, from 0.20 at the end of last year, versus a range of 15% to 25% indicated in the 2024-27 business plan.
Shares in the Italian group pared initial gains and were falling around 1% by 0730 GMT, underperforming a flat blue-chip index in Milan.
On Tuesday, Ithaca Energy said it agreed to buy nearly all of Eni's UK-based oil and gas producing assets for about 754 million pounds in stock, creating one of the biggest independent energy companies in the North Sea.
($1=0.9345 euros)
(Reporting by Francesca Landini; Editing by Giulia Segreti and Clarence Fernandez)