Italy’s Eni will boost its purchases after quarterly profit beat Reuters expectations
Written by Francesca Landini
MILAN (Reuters) – Italian energy group Eni will expand its share buyback program to 2 billion euros ($2.2 billion), it said on Friday, after beating expectations for third-quarter profit.
The state-controlled group indicated in July that it could increase the 1.6-billion-euro program to 2.1 billion if the macroeconomic situation improves.
It reported an adjusted profit of 1.27 billion euros, beating the 1.08 billion expected by analysts in a survey of the company but down from 1.82 billion a year earlier.
Despite lower expectations for oil prices, Eni said on Friday it would increase rewards for investors as progress in its disposal program and cost controls help keep its debt under control.
Analysts have warned that falling oil prices after more than two years of record profits could pressure major energy companies to borrow to maintain shareholder payments or force them to cut purchases.
Eni announced on Thursday that US fund KKR will buy a 25% stake in its biofuel business Enilive for 2.9 billion euros, continuing efforts to set up growth businesses to finance the energy transition.
As Eni expects the price to drop to an average of $83 a barrel this year, down from the previous estimate of $86, the company adjusted its full-year guidance for underlying cash flow from operations and operating profit.
Third-quarter cash flow from operations (CFFO) of 2.9 billion euros was in line with consensus.
The group’s ratio, which measures total debt relative to equity, was stable compared to the second quarter at 22% and is now expected to fall to the lower end of the 15%-20% range.
Its four-year disposal program is progressing faster than expected and is well reflected in almost all of the 8 billion euros in planned revenue, Eni said in a statement.
“Overall, Eni continues to achieve its strategic objectives, and the improvement in distribution is likely to be welcomed by investors,” Royal Bank of Canada analyst Biraj Borkhataria said in a note to clients.
($1 = 0.9238 euro)
