Eni announce fourth quarter and full year 2022 results
FY 2022 group adjusted EBIT was €20.4 bln, double the amount of FY 2021, driven by a strong performance of the E&P, GGP and R&M businesses:
– E&P with €16.4 bln of EBIT was up more than 70% y-o-y due its capacity to capture the upside of a favorable commodity environment;
– GGP earned €2.1 bln of EBIT, replacing Russian flows with equity gas or supplies from countries where we operate, and ensuring optimization of the gas and LNG portfolio in a tight market, while ensuring stable and secure supplies to its customers and managing financial risks;
– R&M achieved its best performance ever with €2.2 bln, compared to breakeven in 2021, due to plant availability and output optimization allowing to capture the upside of a strong refining environment, and efficiency measures to address the rise in plant utility expenses;
– Plenitude delivered against its operating and financial targets with EBIT of €0.34 bln and a renewable capacity of 2.2 GW, despite the challenging market scenario;
– Versalis was impacted by competitive pressures, weakening demand and higher gas-indexed utilities expenses, driving a loss of €0.25 bln.
- FY 2022 adjusted net profit attributable to Eni shareholders was €13.3 bln and, compared with FY 2021, was €9 bln higher due to a strong operating performance and higher results of equity-accounted entities.
- FY 2022 net profit attributable to Eni shareholders was €13.8 bln and, compared with FY 2021, was driven by an improved underlying performance partly offset by lower net special gains mainly due to inventory evaluation.
In 2022 special charges largely related to environmental and remediation provision of €2 bln, including €0.3 bln decommissioning provision for refinery, impairment charges of €1.1 bln for oil & gas assets and chemicals plants, and windfall taxes on energy profits totalling €1.7 bln, of which €1 bln was paid in 2022. These charges were offset by gains of €2.5 bln on the Azule transaction and of €0.4 bln on the divestment of an interest in the Vår Energi associate and by deferred taxes of €1.6 bln. - Q4 2022 group adjusted EBIT was €3.6 bln, down by €0.2 bln from Q4 2021 owing to the reclassification of Azule Energy (Eni E&P activities in Angola) into associates, lower hydrocarbons production and GGP one-off gains in 2021, partly offset by a strong performance of the R&M business.
- Q4 2022 adjusted net profit attributable to Eni shareholders was €2.5 bln and almost 50% higher compared with the Q4 2021, up by €0.8 bln due to higher results of equity-accounted entities partly as a result of the Azule JV, more than offsetting a lower operating profit.
- Q4 2022 net profit attributable to Eni shareholders was €550 mln and was reduced by fair-valued commodity derivatives of €1.1 bln (compared to a gain of €1.7 bln in the previous year), asset impairments of €0.9 bln (compared to reversals of €0.5 bln in the previous year) and extraordinary solidarity tax contributions of €0.7 bln, partly offset by deferred taxes of €1.6 bln. All these gains and losses were classified as special items.
- In Q4 2022, the Group adjusted operating cash flow before working capital at replacement cost was €4.1 bln. In FY 2022, it reached €20.4 bln, net of €8.5 bln of cash taxes, up 60% y-o-y: after funding organic capex of €8.2 bln, up 42% y-o-y due to a stronger US dollar and planned post-lockdown activity, and covering working capital needs, the Group delivered an organic FCF of €12.8 bln to cover portfolio activities, reduce net borrowing by €2 bln and return €5.4 bln of cash to shareholders via dividends and share repurchases.
- In September and November, Eni paid the first and the second quarterly instalment of the 2022 dividend of €0.22 per share each, amounting to €1.47 bln. The third instalment of €0.22 per share will be paid to shareholders on March 22, 2023, being the ex-dividend date March 20, 2023.
- In November, Eni completed the announced buy-back program of €2.4 bln, repurchasing 196 mln shares.
- In January 2023, Eni successfully placed the first sustainability-linked bond among the retail public in Italy for a total amount of €2 bln. Orders for over €10 bln were received compared to €1 bln initially offered, setting the Italian record for a single tranche corporate bond issue aimed at retail. The offering was closed in advance in just 5 days, the minimum term set in the prospectus.
- Net borrowings ex-IFRS 16 as of December 31, 2022, were €7 bln, down by €2 bln compared to December 31, 2021, and Group leverage stood at 0.13, versus 0.20 as of December 31, 2021.
Eni CEO Claudio Descalzi said:
“In 2022, Eni was not only engaged in progressing its sustainable energy transition goals, but also in ensuring the security and stability of energy supplies to Italy and Europe, building up a diversified geographic mix of energy sources. The Company delivered excellent financial and operating results while contributing to the stability of energy supplies to Italy and Europe and progressing its decarbonization plans. During the year, we were able to finalize agreements and activities to fully replace Russian gas by 2025, leveraging our strong relationships with producing states and fast-track development approach to ramp-up volumes from Algeria, Egypt, Mozambique, Congo and Qatar. The recently signed deal with Libya’s NOC on the A&E Structures development and exploration successes off Cyprus, Egypt and Norway will further strengthen our integrated supply diversification. This prompt reaction to the gas crisis and the integration with the E&P activities were important driver of the performance of our GGP business, which was able to ensure its supply commitments through different sources. Plenitude reached a renewable capacity of 2.2 GW, doubling last year level, and together with our newly established Eni Sustainable Mobility will continue to progress our plans to zeroing customers’ emissions. This new entity, leveraging our strong biofuels footprint will offer increasingly decarbonized mobility solutions to customers in Italy and Europe. While market conditions were clearly supportive, our 2022 financial results were underpinned by capital and cost discipline, operating performance and by effective risk management of price volatility and supply tightness. Strong cash generation with an organic CFFO of €20.4 bln allowed us to invest and grow the business, to reach an all-time low leverage of 0.13 and to return €5.4 bln to shareholders via dividends and an accelerated share buy-back program. Our strategic objectives are unchanged: we will invest to ensure stable and affordable supplies to meet energy market demand and decarbonize our operations and clients, while maintaining financial discipline to ensure attractive returns for our shareholders.”
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