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Investing.com -- Eni SpA (BIT:ENI) on Thursday reported its fourth-quarter earnings for 2024 that fell short of market expectations. The energy company’s adjusted earnings before interest and taxes stood at €1.69 billion, missing the consensus estimate of €1.88 billion.
Net income also lagged behind expectations, coming in at €892 million versus a consensus forecast of €960 million.
One of the main factors affecting Eni’s earnings was the weaker performance of its Plenitude and Enilive businesses.
The combined results from these divisions reached €136 million, much below the consensus estimate of €220 million.
Analysts highlighted that Enilive’s performance was impacted by an operational outage at the Gela refinery, contributing to the lower-than-expected earnings.
Additionally, the Global Gas & LNG Portfolio (GGP) segment did not experience the anticipated seasonal boost, adding to the overall softness in earnings.
Despite the earnings miss, Eni managed to outperform in underlying cash flow from operations, posting €2.89 billion, which exceeded consensus expectations of €2.75 billion.
On a positive note, Eni’s full-year production reached the upper end of guidance at 1.707 million barrels of oil equivalent per day (kboed), marking a 3% increase year-over-year.
This growth underscores the company’s ability to sustain production levels despite market challenges.
Net debt rose slightly quarter-on-quarter, reaching €12.2 billion, compared to RBC’s projection of €11.7 billion.
The company’s leverage now stands at 22%, but Eni has noted that pro-forma leverage, accounting for pending portfolio actions such as the Plenitude top-up and additional stake sales in Enilive to KKR, is at a lower 15%. RBC analysts expect net debt to decline through 2025 as further disposals materialize.
Eni also announced a memorandum of understanding with Malaysia’s Petronas to merge select upstream assets in Indonesia and Malaysia.
The new entity could evolve into a significant regional producer with an output of 500 kboed in the medium term.
The move follows a pattern seen in Eni’s previous asset partnerships in Norway (Var Energi), the UK (Ithaca JV), and Angola (Azule).
RBC analysts suggest that this deal could provide funding for growth within the joint venture, potentially leading to a reduction in Eni’s group capital expenditure in the future. Further details are expected to emerge during the company’s Capital Markets Update.
Despite the earnings miss, RBC maintains an “outperform” rating on Eni with a price target of €18.
Analysts point to the company’s strong cash flow, strategic asset partnerships, and a strong production outlook as key factors supporting their positive stance.
However, risks remain, particularly in areas such as oil price volatility, production execution, and potential regulatory changes, including windfall taxes in Italy.