Introduction & Market Context
Italian energy giant Eni S.p.A. (BIT:ENI) reported its first quarter 2025 results on April 24, showing resilient performance despite challenging market conditions. The company’s stock rose 1.88% following the announcement, as investors responded positively to better-than-expected earnings.
Eni navigated a mixed energy price environment during the quarter, with Brent crude averaging $75.7/bbl, down from $83.2/bbl in the same period last year. However, European gas prices (PSV) strengthened significantly to €48/MWh, up from €29/MWh in Q1 2024, providing a partial offset to weaker oil prices.
As shown in the following chart of key market indicators:
Quarterly Performance Highlights
Eni delivered a strong quarter with net profit of €1.4 billion, representing an impressive 60% increase quarter-on-quarter. The company posted an EBIT pro forma of €3.7 billion and cash flow from operations (CFFO) of €3.4 billion.
The earnings waterfall chart below illustrates how various business segments contributed to the overall results:
The upstream segment remained the largest contributor at €3.3 billion, while GGP (Global Gas & Power) added €0.5 billion. The company’s performance benefited from positive portfolio effects, improved gas realizations, and effective cost control, which helped offset lower oil prices and divestment volume effects.
Quarter-over-quarter, Eni’s EBIT pro forma improved significantly from €2.7 billion in Q4 2024 to €3.7 billion in Q1 2025, as shown in this comparison:
Strategic Initiatives
Eni continued to advance its strategic initiatives across both traditional and transition businesses during the quarter. Key developments included:
- Start-up of Johan Castberg oil field
- Agreement for the exploitation of Cyprus’ Cronos (NASDAQ:CRON) Block 6 resources
- MoU with YPF for participation in the Argentina LNG project
- Financial close for the HyNet Liverpool Bay carbon capture and storage project
- Valorization of West Africa assets agreed with Vitol
In its transition businesses, Eni made significant progress with:
- Commencement of SAF (Sustainable Aviation Fuel) production at the Gela biorefinery
- Completion of the Guajillo plant in Texas – Plenitude’s largest battery storage facility
- Start-up of recycled polymer production at Porto Marghera
- Closure of the Brindisi cracker as part of Versalis transformation
- Partnership with UKAEA in fusion energy technology
These strategic initiatives are summarized in the following slide:
Financial Analysis and Cash Flow
Eni’s cash flow performance remained solid, with Q1 2025 CFFO at €3.4 billion despite a seasonal build in working capital. The quarter saw significant portfolio activity, including €3.0 billion from KKR’s investment into Enilive and €0.2 billion from EIP’s investment into Plenitude.
The company achieved a net debt reduction of €1.8 billion during the quarter, as illustrated in this cash flow breakdown:
Eni’s balance sheet strength has improved substantially, with leverage reduced to 18% (12% on a pro-forma basis), reaching historic lows. This represents a significant improvement from previous years and positions the company well to weather potential market downturns.
The following chart shows Eni’s leverage trend over time:
Guidance and Outlook
Despite solid Q1 performance, Eni has updated its 2025 guidance to reflect a more challenging market environment. The company reduced its full-year CFFO guidance from €13.0 billion to €11.0 billion, primarily due to lower oil price assumptions (revised from $75/bbl to $65/bbl).
However, Eni confirmed its shareholder return commitments, maintaining the dividend at €1.05 per share and the share buyback program at €1.5 billion. The company also reduced its net capex guidance to below €6 billion (from €6.5-7.0 billion previously).
The updated guidance is detailed in the following comparison:
To mitigate the impact of weaker market conditions, Eni has implemented a series of measures expected to generate over €2 billion in additional cash flow. These include capex optimization, portfolio adjustments, working capital initiatives, and cost reduction measures.
As shown in the following chart of cash flow mitigation strategies:
"We are creating value, leveraging our competitive strength in the Upstream," stated Francesco Gatti, CFO of Eni, emphasizing the company’s focus on enhancing its core operations while advancing its energy transition strategy.
With its strengthened balance sheet, strategic progress across both traditional and transition businesses, and confirmed shareholder returns, Eni appears well-positioned to navigate the evolving energy landscape despite near-term market challenges.
Full presentation:
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