Eni increases share buyback, pledges to cut leverage in 2024

By Francesca Landini

MILAN (Reuters) -Italian energy group Eni will cut its leverage in the coming quarters as it turns to disposals and away from major acquisitions, its Chief Financial Officer said on Wednesday, after the group increased its 2024 share buyback.

The state-controlled group reported a steep fall in net profit compared to last year, but beat analyst expectations and announced a 45% uplift in its buyback to 1.6 billion euros.

"The leverage will fall during the next quarters, starting from the second quarter," CFO Francesco Gattei said on a post-results conference call.

Eni's debt to equity ratio was 0.23 at the end of March, up from 0.20 at the end of last year and versus a range of 0.15-0.25 indicated in the 2024-27 business plan.

Gattei said the increase was linked to several recent M&A deals, but added the group had now completed all the major strategic acquisitions it had in sight.

According to its business plan, Eni plans to pocket around 8 billion euros from selling stakes in its low-carbon units and from disposals of upstream activities.

"We are in advanced discussions on some disposals," Gattei said, without elaborating.

Sources have told Reuters that Eni aims to sell minority stakes in its biofuel unit Enilive and its bioplastic company Novamont by the end of this year in two deals that could fetch around 1.3 billion euros.

This is part of the group's so-called satellite strategy under which it is creating separate entities to fund its energy transition and upstream investments.

First quarter adjusted net profit came in at 1.58 billion euros, 46% below the 2.91 billion recorded a year earlier as European gas prices soared, but just topping the analyst consensus of 1.56 billion euros.

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.

Eni's shares reversed earlier gains to stand 2% lower on the day by 1530 GMT, underperforming a 0.3% drop in Milan's blue-chip index.

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 Clarence Fernandez, Kirsten Donovan)