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Eni release third quarter and nine months of 2021 results

October 29, 2021

by oilandgaspress

Group adjusted EBIT: €2.49 bln in the Q3 2021, up by 22% vs. Q2 2021 (€5.86 bln in the nine months 2021, an increase of €4.4 bln, +315% vs the nine months 2020). The quarterly Group result was driven by the positive performance of all Eni’s businesses:
   – E&P: EBIT of €2.44 bln, up by 33% vs. Q2 2021 (+375% vs. the same period of 2020) due to a strengthening price scenario and a 6% increase in production to 1.69 mln boe/d. In the nine months 2021, EBIT was €5.66 bln (+660% vs. nine months 2020) mainly due to the ability to fully capture the upside in hydrocarbon prices;
   – EGL, Power & Renewables business: EBIT at €64 mln, declining when compared to the Q2 2021 due to seasonal factors; up by 12% from the same period of 2020. In the nine months 2021, EBIT amounted to €374 mln, up by 12% compared to the nine months 2020;
   – R&M: positive EBIT of €161 mln compared to a loss of €12 mln in Q2 2021 (+€87 mln compared to the Q3 2020) thanks to higher throughputs and volumes sold through the retail stations’ network benefitting from the economic recovery as well as seasonal factors due to the driving season. In the nine months 2021, the performance was affected by a weak refining scenario and higher costs for CO₂ emission allowances with an EBIT lower by €304 mln compared to the nine months 2020;
   – Chemicals: EBIT of €25 mln, declining by €177 mln compared to the Q2 2021 (+€78 mln vs. the same period 2020) due to a normalization in products margins and a catch up in maintenance activity that was delayed to capture the upside of the strong Q2 market. In the nine months 2021, EBIT amounted to €266 mln (a loss of €184 mln in the nine months 2020) reflecting the turnaround driven by the post-pandemic recovery, temporary products shortages and greater plant utilization rates;
   – GGP: EBIT of €50 mln, more than doubled compared to the Q2 2021. The positive performance in the quarter leveraged on capturing the spike in spot prices, which enabled to optimize the portfolio more than offsetting the negative PSV – TTF spread. The comparison with the corresponding reporting periods of 2020 (EBIT was -22% vs. Q3 2020; €44 mln in the nine months of 2021 compared to over €400 mln in 2020) has been affected by trends in gas prices spreads, significant one-off positive effects accounted for in 2020 from portfolio optimizations and contractual renegotiations.
Adjusted net profit: €1.43 bln in Q3 2021 with an increase of 54% vs. Q2 2021 due to the ability to catch market scenario and production growth. In comparison to the corresponding 2020 reporting periods, impacted by the COVID pandemic, it saw a material recovery: up by €1.6 bln and €3.4 bln respectively vs. Q3 and the nine months 2020 due to a better operating performance, improved results of equity accounted investments and a normalized Group tax rate (50% in the nine months of 2021) due to a lowered tax rate in the E&P segment due to a broad-based recovery in taxable profit and a better profitability outlook of the green activities in Italy.
Cash flow from operations before changes in working capital at replacement cost: €3.3 bln in the Q3 2021, enough to fund net capex of €1.1 bln. In the nine months of 2021, the Group generated €8.1 bln of cash flow, which after funding €4 bln of net capex left a free cash flow of over €4 bln.
Portfolio: net investment of about €2.2 bln in the nine months 2021, including net borrowings of acquired entities, fully deployed to accelerate growth in the renewables and low-carbon businesses.
Net borrowings ante IFRS 16: €11.3 bln, down by €0.3 bln vs. December 31, 2020. Leverage lowered to 0.28 (vs. 0.31 as of December 31, 2020).
Paid the 2021 interim dividend in September amounting to €0.43 per share, equal to 50% of the 2021 dividend, with a cash out of €1.5 bln.
Buy-back: started the €400 mln buy-back program at the end of August; as of October 22, 2021, 17.63 mln shares were purchased at a cost of €197 mln.