Earnings call transcript: ENI Q2 2025 beats EPS forecasts, stock rises 1.82%

Eni S.p.A. (ENI) reported its second-quarter earnings for 2025, surpassing EPS expectations with a reported EPS of 0.3644 USD, beating the forecast of 0.2924 USD by 24.62%. However, revenue fell short of expectations, coming in at 18.77 billion USD compared to the forecasted 20.22 billion USD, marking a 7.17% miss. The stock’s positive performance aligns with InvestingPro data showing ENI trading near its 52-week high of 17.50 USD, with a strong year-to-date return of 16.07%. According to InvestingPro’s Fair Value analysis, the stock currently appears undervalued, suggesting potential upside for investors.

Key Takeaways

• Eni’s EPS exceeded forecasts by 24.62%, despite a revenue miss.
• The company lowered its full-year CapEx guidance to under 8.5 billion EUR.
• Net debt reduced to 10.2 billion EUR, with leverage at 19%.
• ENI’s stock rose 1.82% post-earnings announcement.
• Expansion in renewable energy and LNG projects highlighted.

Company Performance

Eni reported a robust performance in Q2 2025, with significant earnings before interest and taxes (EBIT) of approximately 1.7 billion EUR and a pro forma EBIT of 2.4 billion EUR. The company also reported cash flows before working capital of 2.8 billion EUR for the quarter and 6.2 billion EUR for the first half of the year. With an EV/EBITDA ratio of 3.53x and a healthy current ratio of 1.14, InvestingPro data reveals strong financial health with an overall score of "GOOD." Eni’s strategic focus on reducing net debt and leveraging its strong position in the LNG and renewable sectors has positioned it well against industry peers.

Financial Highlights

• Revenue: 18.77 billion USD, missing forecasts by 7.17%.
• Earnings per share: 0.3644 USD, beating forecasts by 24.62%.
• Gross CapEx year-to-date: 3.9 billion EUR.
• Cash Flow from Operations (CFFO) expected to reach 11.5 billion EUR in 2025.

Earnings vs. Forecast

Eni’s actual EPS of 0.3644 USD significantly exceeded the forecast of 0.2924 USD, resulting in a 24.62% positive surprise. This marks a strong performance relative to previous quarters, where earnings surprises were less pronounced. However, the company missed its revenue forecast by 7.17%, which reflects challenges in achieving expected sales volumes.

Market Reaction

Following the earnings announcement, ENI’s stock rose by 1.82% to 14.664 USD. This increase reflects investor confidence in the company’s earnings performance and strategic direction, despite the revenue miss. InvestingPro analysis highlights ENI’s impressive track record of maintaining dividend payments for 30 consecutive years, with a current dividend yield of 6.99%. The stock has demonstrated strong momentum, delivering a 13% return over the past six months. For detailed insights into ENI’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Outlook & Guidance

Eni has revised its full-year CapEx guidance to under 8.5 billion EUR, signaling a more conservative approach to capital expenditure. The company is targeting production of 1,700,000 barrels per day in 2025 and expects CFFO growth of 40% by 2030. Strategic initiatives include expanding renewable capacity and advancing LNG projects.

Executive Commentary

Claudio Descalci, CEO of Eni, stated, "Our speed of action is enabled by the clarity of our strategic intent," underscoring the company’s proactive approach. He also emphasized, "We expect to grow CFFO by around a total of 40% by 2030," highlighting long-term growth ambitions. Descalci added, "The strength of Eni is not the CEO alone, is the team," reflecting on the collaborative efforts driving the company’s success.

Risks and Challenges

• Revenue shortfall indicates potential challenges in market demand.
• Fluctuating oil prices could impact profitability.
• Regulatory changes in the EU and US may affect biofuel operations.
• Execution risks related to new projects and partnerships.
• Economic uncertainties could impact global energy demand.

Q&A

During the earnings call, analysts inquired about Eni’s interest in LNG projects, succession planning, and cash management initiatives. Executives confirmed strong interest in expanding LNG operations and discussed strategic partnerships aimed at enhancing market position.

Full transcript - ENI S.p.A. (ENI) Q2 2025:

Conference Moderator: Good afternoon, ladies and gentlemen, and welcome to Eni’s twenty twenty five First Half Results Conference Call hosted by Mr. Claudio Descalci, Chief Executive Officer. I am now handing you over to your hosts to begin today’s conference. Thank you.

Claudio Descalci, Chief Executive Officer, Eni: Thank you. Good afternoon, and welcome to our Q2 twenty twenty five result presentation. I’m pleased to say that the strong and consistent pace of strategic progress we have set in transforming HENI has continued through the first half of twenty twenty five. Our speed of action is enabled by the clarity of our strategic intent that can be summarized as: in Upstream, delivering efficient competitive growth and improving the return of our portfolio, most notably through exploration success, active portfolio management and organic production start ups and ramp ups. Integrating our equity gas production into LNG chain to maximize value.

In particular, Eni is the leader in floating LNG, which provides an opportunity to unlock large amount of resources in associated gas or from deepwater from far from shore discoveries. In parallel, building new complementary and competitively advantaged energy business related to end product decarbonization, such as Eni Life, Plenitude and CCS transforming the downstream and chemicals converting these businesses to new growth opportunities, such as our plan for Versalis enhancing profitability and margin capture in areas such as trading to take benefit of more complex energy markets and anticipating new trends such as data center and nuclear fusion. Critically, our business initiatives are supported and improved by unique and innovative financial strategies that discloses value, support investment in growth and contribute to our enhanced balance sheet strength with leverage at historic lows. Executing this strategy, we expect to grow CFFO by around a total of 40% by 2030 and materially improve return on capital employed. This, in turn, drives shareholders’ returns, which are our first commitment, combining a competitive euro denominated dividend that has been growing at over 5% per year and is our top priority with our share buyback program.

If we now take a look at the important development of the year to date and day contest, We continue to grow and enhance our Upstream. The key engine of our organic growth remains our industry leading aspiration. In first half, we discovered around 600,000,000 barrels of oil equivalent of new resources, including from Namibia, hourly cost in Norway. And in the second half, we have significant further activity, including follow drilling in Namibia, Angola and material prospect offshore Indonesia. Our Norwegian satellite VAR started up two major projects, Johan Kasberg in March and Malder X in June, which will contribute towards driving VAR’s production to more than 400,000 barrels per day in Q4 this year.

These are the first two of five major projects in the Any portfolio due for the first production in 2025, with Agogo NGC in Angola and second floating LNG in Congo to come on stream in second half. We are now advancing our fourth and largest upstream satellites, focused on Asian LNG in combination with Petronas in Indonesia and Malaysia. I will come back to this in a moment. In June, we also opened a new equity gas to LNG opportunity by signing an agreement with YPF for the Argentina LNG project, combining significant resources in the Vaca Muerta and 12,000,000 ton per year floating export facility. Alongside our existing development portfolio focused on time to market and our continuing exploration success, we are forming compelling visibility over the profile of our long term upstream activities.

Alongside growing upstream, our strategy in building transition businesses supported by Align Fresh investment is unique and delivering material value while strengthening and diversifying any overall returns. With the conversion of San Lazaro into a biorefinery, we have now four additional biorefinery projects in pipeline, of which two are located in the Asian market. Plenitude buying offer to Atcha Energy made in June grows the customer base by more than 10%, parallel to the expansion of renewable capacity. Indeed, that capacity growth will also be marked in 2025, growing by over 30% year on year to over 5.5 gigawatt net to Plenitude or more than seven gigawatt in gross terms. The growth outlook for Any Life and Plenitude with EBITDA close to tripling between 2024 and 2030 is being recognized by important investors.

In addition to the top up by EIP taking their stake to 10%, we announced the €2,000,000,000 investment by Ares for a 20% stake valuing Plenitude at around €12,000,000,000 in enterprise value. This transaction is expected to close around the end of the year. In April, KKR topped up its stake to 30 in Any Life by investing $6.00 €1,000,000 following the €2,960,000,000 we collected in March. Our satellite model is also adaptable to supporting a more nascent business. In May, we agreed an exclusivity agreement with GIP related to the sale of a 49.99% stake in our CCUS activities, providing aligned capital ahead of the build out of wider platform of CCUS project and is expected to close in the second half of twenty twenty five.

The agreement followed the financial close reached in April with The U. K. Government on our Liverpool Bay project. Finally, our goal of improving financial performance and profitability is also focused on corporate cost efficiency. But in this respect, our transformation plan for Versalis is a critical lever.

In this, we are accelerating our actions. In March, we closed the Brindis’ steam cracker and we closed Priolo in July, well ahead our original plan. These closures will allow us to address a significant portion of the losses through the remainder of 2025 and 2026. Together with the investment into new platform, they will contribute to delivering a turnaround in EBIT of almost €1,000,000,000 bringing Versalis back to free cash flow breakeven at the end of our full year plan. Q2 results broadly reflect any sensitivity to the scenario.

We are delivering in line with our guidance. In the Upstream, production was 1,670,000 barrels per day in line with our guided range. EBIT for the quarter was around €1,700,000,000 and pro form a EBIT of €2,400,000,000 was both consistent with the prevailing scenario. GDP result benefit from the positive effect of a contract renegotiation and full year pro form a EBIT is now expected to be around €1,000,000,000 capturing the original guidance upside. Any lines saw an improvement in EBITDA versus Q1, almost unchanged year over year.

This positive momentum should be supported by typically stronger marketing contribution in Q3 and the recovery in buyer spread that we already saw toward the end of Q2. Planitu was supported by retail business and continued progress productions. Both transition businesses remain on track to meet their full year guided result. Versalis result show an improvement quarter on quarter, but remain significantly loss making, ahead of the expected positive impact of the transformation plan now underway, the first effect of which should be observed in second half. Our refining operations improved on Q1 on a better margin, but were impacted by downtime at key assets.

Cash flows before working capital in the quarter were 2,800,000,000 or €6,200,000,000 for the half year, maintaining our efficient conversion of earnings into cash. Gross CapEx year to date stands at €3,900,000,000 and we are on track to deliver the lowered guidance of under €8,500,000,000 for the full year, while the net CapEx is expected below €6,000,000,000 thanks mainly to the Ares investment into plenitude and upstream valorizations. On the cash initiatives of €2,000,000,000 announced with our Q1 result, 1,000,000,000 has been delivered. Moreover, we have identified a further 1,000,000,000 to be captured by the end of the year, raising the total benefit to €3,000,000,000 In the first half of the year, we repurchased €660,000,000 of which €300,000,000 related to our 2025 program that we confirm to complete in Q1 twenty twenty six. Net debt fell again quarter on quarter to €10,200,000,000 €2,000,000,000 lower than year end 2024.

And leverage stood at 19% despite the impact from ForEx on equity balances. With outstanding valorization received, pro form a leverage was 10%, equivalent to 9% net debt to capital, the lowest level in our history. Before moving to Q and A, I want to update on an important achievement in this quarter, our upstream combination with Petronas in Indonesia and Malaysia. Since announcing the MOU in February, significant work has continued, culminating in the framework agreement signed in June setting out key principles, including the asset level valuation of the respective contribution yield, a fifty-fifty split. Work is continuing on completing financial due diligence in defining the business plan and in receiving the relevant approvals ahead of the completion targeted around the end of twenty twenty five.

Our upstream satellite model is proving to be a powerful means of creating critical mass and new strategic options and generating material additional cash flow. VAR, Azul, Itaka clearly demonstrate this. Our combination with Petronas replicate the model and will be our largest to date, creating a leading regional player with an exceptional growth outlook in a highly dynamic area of the world where gas demand is forecast to increase substantially and with significant capacity to independently fund its investment program. Together with Petronas asset, the combination will combine 19 blocks and across Indonesia and Malaysia, spanning production, development and exploration activities. Five FIDs are targeted for 2026 and four more in the following years.

And we expect gross production of over 300,000 barrels per day at closing with the prospect of over 500,000 barrels per day in four, five years. Additional exploration success offers the prospect of even higher production levels, extending well into the 2030s, as emphasized by the over 10,000,000,000 barrels of estimated unrisked resources in place. Indeed, at least 10 highly probability of success, high impact wells are planned to be drilled over the next three years aiming to prove up this material upside. We have also agreed a mechanism for the JV to compensate the legacy acreage owner for new discoveries made, representing a further source of cash upside. In addition, we continue to expect to valorize a retained minority equity stake in Cutaiin blocks in a separate portfolio operation likely in 2026.

The Petronas combination is a compelling example of how ANI uses its distinctive features, exploration skills and technologies, valuable relationship, dual exploration and satellite model to deliver portfolio high grading, growth, cash and ultimately value in a way I would say is unique in the industry and is highly material to any. Looking ahead, the second half of the year will build on our strategic execution, speeding up growth and value delivering in 2026. Production will benefit from the start ups and ramp ups to each around 1,700,000 barrel per day full year guidance. The third quarter will reflect this impellent growth, but also the usual seasonal maintenance activity with the production seen at between one point seven million and one point seven two million barrel per day. New renewable power generation capacity will come on stream to reach the target of over 5.5 gigawatts by the end of the year.

We now expect CFFO in 2025 to be €11,500,000,000 €500,000,000 higher than our Q1 outlook and €500,000,000 higher on an underlying basis than our original guidance. In addition, we realized the remaining €2,000,000,000 of the overall €3,000,000,000 of cash initiatives I highlighted earlier. Distribution will continue as promised with a steady pace of buyback to recognize to our investors an attractive and resilient returns in a volatile market. We will continue to keep the company pro form a leverage between 1520% in 2025 within the planned range. On the basis of this result, our operational momentum and with the closing of the currently Life deals, we can expect a positive second half of the year, an even more promising 2026 that will build on a larger, diversified and more valuable set of assets.

And now with the team, we are ready to answer your questions. Thank you.

John, Moderator/Host, Eni: Okay. Thank you, Claudio. We’re going to move to questions. Good afternoon, everybody, I should say. And the first question is from Josh Stone at UBS.

So Josh, if you’d like to ask your questions. And if I can again ask if you can keep it to two questions just so that everybody can participate. Thank you, Josh.

Josh Stone, Analyst, UBS: Thanks, and good afternoon, John. Good afternoon, everyone. First question I’ll ask is on GGP. You signed a fairly large contract with Venture Global this quarter starting 02/1930. It’s significant.

It’s the first U. S. LNG contract you’ve signed. I’m sure it went to pass you by, there’s an arbitration ongoing with some of your competitors’ peers. So I was curious as to if you could elaborate on the terms of that contract and what gives you the confidence that these volumes will appear as promised when the project starts up?

And then second question, actually a bit more of a modeling question around the satellites. Your stake in any lives has now gone to 70% and Planitig will go to the same level at the end of the year. It’s quite intuitive to model the minority interest. But in terms of the minority dividends, are you able to give any guidance there? I presume your private equity backers want to get paid at some point.

And is there any dividend policy within these? And how should we account for that in our cash flow balances would be helpful? Thanks.

Claudio Descalci, Chief Executive Officer, Eni: Okay. Thank you for the question. The first question is for Guido for GDP. And the second, Francesco is going to answer.

Guido, Executive, Eni: Well, of course, we cannot comment on the third party contract and proceedings. We know that there is an arbitration ongoing. We know which provision has been posted by Venture Global. And of course but of course, we rely very much on their project ability to deliver modular plant as they did already in the past. As far as concerned, the contract in itself, we’ve actively scouted the market and we found this project very competitive.

We found it very much in line with our need to complement our portfolio of contracted volumes. As you know, we have a target to hit 20,000,000 tonnes per annum and also to cover geographically the whole globe. And this contract is very complementary to our current portfolio, which covers East And West Africa, Middle East and Far East.

Francesco, CFO, Eni: Yes. About the distribution policy that are related to any live and plenitude, we will not disclose this value that are related to clearly reference to net results and a proportion of that. And I think we can provide the further details in the future. But for the time being, we have no disclosure of that volume that are not particularly material in this phase.

Josh Stone, Analyst, UBS: Okay. Understood. Thanks.

John, Moderator/Host, Eni: Thanks, Josh. We’re going now to Biraj at RBC. Biraj?

Biraj, Analyst, RBC: Hi there. Thanks for taking my questions. The first one is just on the asset sale to Vitol. There’s roughly a two year gap between the effective date and the expected close based on what you said and the headline price. It’s a project where you’re obviously spending quite a lot of development CapEx.

So was just wondering if the adjustment would be in ENI’s favor, I. E. The cash received would be higher than the headline value or it would be lower? Just any kind of sense of the magnitude of that adjustment there. And then as we have you on the call, Claudio wants to ask about succession planning.

You’ve been CEO for over a decade now. Strategy in the business has changed quite a bit over that time. Just wondering if you could give any comments around whether you’re looking to be present within E and I from 2026, either as exec chairman or as another term CEO? Thank you.

Francesco, CFO, Eni: Yes. It’s right. You are correct in describing the deal, consideration, let’s say, effective date of the deal. And clearly, the closing will take into account of the amount that is cashed in term of production because both assets are producing asset. And clearly, in term of investment because as you are correctly saying there is a ramp up of investment for reaching the plateau of the different phases.

Clearly, is still an uncertain amount because it will be determined at the time of closing, but the consideration have to be adjusted for that amount.

Claudio Descalci, Chief Executive Officer, Eni: So for the succession plan, what I can say that the strength of any is not the CEO alone, is not the CEO, is the team. We have a very competent, strong team. That is the strength. We build together this, I can say, fantastic strategy, very resilient that has been able to navigate this very agitated sea. We are clearly inside of a succession plan.

But any people our people our management has a very strong sense of belonging, competencies and know the company and know the strategy. So I just can say that there is no worry. I think any is strong because it’s any because we have a culture, because we have a strong management.

Biraj, Analyst, RBC: Okay, understood. Thank you.

John, Moderator/Host, Eni: Thanks, Biraj. So we’ll move now to Peter Low at Rothschild. Peter, if you’re there, if can ask your questions.

Peter Low, Analyst, Rothschild: Yes. Hi, thank you. Yes, the first was just on the tax rate. It’s come in a bit lower than kind of your previous guidance for a couple of quarters now. Can you perhaps just elaborate on what’s driving that and kind of where we should expect it to be going forward?

And then the second was on the refining market. We’ve seen a step up in margins in the third quarter. There seems to be mixed views out there as to whether it’s transitory or maybe a bit more structural. I’d be interested in your perspective on what’s driving that. And then whether there’s any reason you won’t fully capture the improvement in 3Q?

So

Claudio Descalci, Chief Executive Officer, Eni: Francesco is going to answer for the two questions. See, about the

Francesco, CFO, Eni: tax rate, you know that we drove we drive a tax rate in the year between 50% to 55% related to clearly an assumption on scenario performance of the different business. And this the different ways of return on results related to the business are impacting the tax rate. Another element that is more important that is becoming relevant is the conversion of loss making business make Italian assets profitable and not instead, let’s say, a factor weighting negatively on the tax rate. And another factor, this will allow also to restate certain tax credits that were considered not recoverable assuming a long term loss making activity. So the conversion of biorefineries, the conversion in of crackers to new opportunities as the battery storage will help also to reduce the tax rate.

So we can now provide a lower expectation for the tax rate closer to the 50%, so the lower boundaries or lower range of the original assumption. I leave then to Pino for the question about the margins.

Pino, Executive, Eni: No. About our vision on the refining margin, what we are seeing is a sudden increase in the margin starting from the June, early in July. And what we expect is that for some months this situation could remain because the storage of products is very low. The crack spread of gasoil is very, very high because of the stress in the ban of Russian crude, Russian gasoil. This is very positive for the at least for all the driving season.

Peter Low, Analyst, Rothschild: Thank you.

John, Moderator/Host, Eni: Thanks, Peter. And we’re going to move now to Irene Himona at Bernstein. Irene?

Irene Himona, Analyst, Bernstein: Thank you. Good afternoon. My first question on Plenitude. As you clearly are moving towards the 28 capacity target of 10 giga and then 15 by 02/1930. Can you provide a time line for that satellite turning cash flow neutral?

So will it be by 2030 or later? And then my second question on this very material new upstream satellite in Indonesia. To better appreciate the materiality near term, can you perhaps give us a sense of the uplift to your 2026 production, CFFO, etcetera? Thank you.

Claudio Descalci, Chief Executive Officer, Eni0: Yeah. Good afternoon and thank you for the question, Irene. This is Stefano Goverte. For Pleneto, Pleneto is a growth company today. We of course, we will reach our 10 gigawatts financing that grow by 60%, 70% from cash from operation generated by the company, the remaining true debt.

We want to maintain a very strong financial statement balance sheet. And so the net debt to EBITDA ratio will be below 3% in our statutory numbers. And the growth will continue up to when our retail domestic client will be served with our production from the renewable plants. And we expect this to happen between thirty five percent and forty So before that date also the cash flow will turn to positive.

Claudio Descalci, Chief Executive Officer, Eni: Yes. For Indonesia, it’s clearly a big project, transformational project for us not just for the where it is, but also for the dimension and the potential that can express. We cannot disclose, for sure, we’ll be positive and give an upside in 2026. We cannot disclose exactly figures in terms of returns financial returns or dividend or production. It’s something that we’re going to clarify in February when we will present the full year plan.

But clearly, is one of the best deal we have done in the last period and will be very accretive for any overall.

Irene Himona, Analyst, Bernstein: Thank you.

John, Moderator/Host, Eni: Thanks, Irene. We are going to move to Henry Tarr at Berenberg. Henry?

Claudio Descalci, Chief Executive Officer, Eni1: Hi, and thanks for taking my questions. The first one is just on the YPF Argentina project. Could you give more color just around what might need to happen for it to reach FID? And are you happy to sort of push ahead with potentially large scale LNG projects currently, just given the sort of large ramp up of capacity that we’re seeing in LNG towards the end of the decade? And then the second question is just on the buyback.

Clearly, the balance sheet continues to be in good shape. You have had strong divestment proceeds coming in. What could cause you to reassess the buyback as you look towards the rest

Claudio Descalci, Chief Executive Officer, Eni2: of the year? Thank you.

Claudio Descalci, Chief Executive Officer, Eni: We do response on the YPF and

Guido, Executive, Eni: then I take care about the buyback. Yeah. Of course, quite a number of steps needs to be made and fine tuned with YPF, which includes the final project configuration and the final field development plans, commercial agreements and then offtake agreements and the project financing. So this would require some time. Our expectation is to finalize all of this by the very end of the year or beginning of next year.

Claudio Descalci, Chief Executive Officer, Eni: Good. For the buyback, we said that we present during our Q1 buyback as a floor. Clearly, the trend is very positive. So we are improving. We are the execution of the strategy, I think, is really very positive.

The leverage, all the KPIs are good. So we’re going to see in the next month, if we are able to continue, we are very I’m convinced that we can continue this trend. So we can consider, considering our balance sheet and all what I said, we can consider it to improve our buyback. We will be clear in the next months, but there is this possibility.

Claudio Descalci, Chief Executive Officer, Eni2: Many thanks.

John, Moderator/Host, Eni: Thanks, Henry. I would just actually just to complement one thing that Stefano said earlier on is we do disclose the net debt position of Plenitude, you can see the capacity that the company has, just to add to Stefano’s comments. We’re going to move now to Lydia Rainforth at Barclays. Lydia?

Claudio Descalci, Chief Executive Officer, Eni3: Thanks, John, and good afternoon, everyone. Two questions, if I could. The first, just coming back to the £3,000,000,000 cash management. Obviously, that’s quite a long way from where we were at 1Q. Can you just talk through that a little bit more?

And have you been surprised that how easy it’s been to actually kind of to manage that cash and to get those savings? And does it make you think about the rest of the business where else you can make savings? And then secondly, I just wanted to touch on the pockets of financing that you’re tapping. When I take a step back and look at the transactions that you’ve done, it’s a combination of national oil companies, it’s trading companies, it’s private equity. What advantages over traditional sources of financing and partners do you think that gives you both short term and long term?

Thank you.

Claudio Descalci, Chief Executive Officer, Eni: So before asking Francesca to talk about the 3,000,000,000, first of all, it was not easy exercise. It’s never easy. It’s not something that we start one week ago. It’s something that we work and all the structure is working. It’s clearly part of the efficiency that we are finding also with the new model, With the business combination, the satellites, we are trying to delete all the over cost or additional overlap we have in the structure.

So as I said before during the presentation in February, this model is not just to give us dividend or the capacity to invest or to give value, but it’s also a complete new organization charter for the company. And clearly, step by step, you can improve. In this so we needed we didn’t need for this for today to express an additional €1,000,000,000 But after the work, we got this €1,000,000,000 more. It was work, not easy because it’s organizational work. Then we can be more flexible on our stocks with the new organization and other financial move that Francesco made.

So that is the main reason. So it’s not we are not defending ourselves because we need more cash. We are adapting our organization to the new models. Francesco, you want to say something more?

Francesco, CFO, Eni: Yes. What is clear is possible in all organization to think and work differently than in the past. There are a lot of tools, financial tools or capability to redesign what was a typical cycle, for example, for payment, a typical cycle for storage, etcetera, that could be shortened, improved in term of financial needs. So it’s a sort of just in time logic that you had, for example, example, in in the the automotive industry twenty years ago. And this give you a lot of more availability and efficiency in terms of use of cash because at the end of the day the cash for an oil and gas company is expensive.

And outside of this company, there are other supplier of capital and cash that are much more let’s say cheaper and therefore optimizing the overall cost.

Claudio Descalci, Chief Executive Officer, Eni: So the second question about new partners. It’s true we open up to new partners, so traders or national oil, energy company funds. I think that also that is linked to the new organization that we are expressing with the model, with the satellite model, because we give more opportunities. Clearly, these partners are very good partners, especially when we work in local situation like in Indonesia and Malaysia with the state company, we go faster. They know the asset.

They know the country. They are quite they are in the need to give priority to their own production, to their own project. So the same need we have. They don’t have any other priority than give value to their own resources. Then we have other the fund.

The fund clearly has been very key. And so these private partners in developing our transition satellite, That is good because they do diligence, they go deep, they dive deep inside your model, they challenge you and it’s not typically the role of another oil and gas company because they put money. We run the show. We are in charge. We are operator and we define a different so it’s a different logic.

So the once model that we started three years ago that now is going very well and is giving a very strength to our not just balance sheet, but to our organization, open up new possibility, more focused, more faster, and that for us is essential. We need to go fast. We don’t want to lose money and time. And when there is resources, we try to find the partner, the right partner that is focused to deliver as soon as possible return on that resources. And that are the right partners.

John, Moderator/Host, Eni: Thanks, Lydia. We’re going to move to Spain now, Alejandro Vigil at Santander. Alex, are you there?

Claudio Descalci, Chief Executive Officer, Eni2: Yes. Thank you for taking my questions. The first question is about the if you can share with us the opportunity of Atea Energia. Know you can discuss this potential investment. And the second is hearing all these comments about satellites.

Just a question about if Namibia could be another potential satellite considering the process that Galp is now currently trying to execute there? Thank you.

Claudio Descalci, Chief Executive Officer, Eni0: Thank you, Alex.

Biraj, Analyst, RBC: I can’t

Claudio Descalci, Chief Executive Officer, Eni: buy a chair please.

Claudio Descalci, Chief Executive Officer, Eni0: Yeah, I bought the chair, not Namibia.

Claudio Descalci, Chief Executive Officer, Eni: Namibia, no. At the moment, don’t try to do something that is not in your

Claudio Descalci, Chief Executive Officer, Eni0: own competence. No, A transaction, we submitted a binding offer and the Board of Director, A chair, upset the binding offer. You know that we offer a value for the company, an enterprise value of €460,000,000 plus a potential another 100,000,000 to be verified in term of KPI and target KPI on the quality of the customer base in June 2027 plus the cash position normalized for another €130,000,000 The operation for us is pretty in line in our strategy because we will acquire counting the customer base at the end of twenty twenty four, 1,400,000 clients, 70% of which are power clients. So perfectly in line with our strategy to increase the power client customer base. So I would say a very good operation and we hope to complete it as soon as possible.

The process is taking the necessary authority authorization mainly from antitrust, so we envisage by the 2026 to close the operation.

Guido, Executive, Eni: Well, Namibia is a clear example of how effective our is our business model with the satellite. So when we created the satellite of Azul, the objective was of course to develop the resources in the country, but of course also to expand regionally and Namibia is a clear example of that strategy materializing into an execution.

Claudio Descalci, Chief Executive Officer, Eni2: No interest in the Galp process?

Guido, Executive, Eni: No. We are not interested. We have found our resources. We have a new exploration well coming. So we are focused on our block and our resources at the moment.

Claudio Descalci, Chief Executive Officer, Eni2: Excellent. Thank you.

John, Moderator/Host, Eni: Okay. So we’re going to move thank you, Alejandro. We’re to move from Alejandro to Alessandro Mediobanca. Alessandro Pozzi, are you there?

Claudio Descalci, Chief Executive Officer, Eni4: Yes. Thanks, John. So I have two questions. And the first one is going back to your opening remarks around Versalis. You’ve talked about the acceleration in the restructuring plan.

Can you maybe talk about what will be the next milestones in the second half into next year for the restructuring of Versalis? And how do you expect Chemicals margins to evolve? And the second question always on the outlook, but this time on biofuels. One of your competitor reported really good results the other day. Maybe can you talk about the dynamics in biofuel markets as we go into second half and 2026 again?

Thank you.

Claudio Descalci, Chief Executive Officer, Eni: Okay. Thank you for the question, Adriano, and then Stefano for biofuels.

Claudio Descalci, Chief Executive Officer, Eni4: Sure. Thanks,

Claudio Descalci, Chief Executive Officer, Eni5: Alessandro, for the question. So as you might have seen from the public announcement, we decided to speed up a little bit the action plan that we announced about the closing of the cracker in Brindisi and the closing of the cracker in Priolo. When you close big machine, the positive impact start to materialize after twelve months. But that said in the 2025 we are going to see some positive effect in the range of nine-zero almost €100,000,000 And this coming from more or less €60,000,000 €65,000,000 from the shutdown of the two big machine another €45,000,000 from the development of the new platforms. Clearly, when I say the project that you start to see the big effect by the second half of twenty twenty six.

So the effect of this efficiency and this shutdown would be in the range of €250,000,000 on a yearly basis. So you start to see from the second half of twenty twenty six. And of course, you start to see more in 2026 coming from the development of the new platform plus more efficiency plan. Going to your question about how we see the scenario, honestly, we see lack of meaningful economic recovery in the chemical sector in Europe. So we see some slight improvement in the scenario.

But as I say, there are very slight improvement. So all of this number that we provide to you are based on pretty much a slight scenario.

Claudio Descalci, Chief Executive Officer, Eni6: Yeah. Alessandro, thank you for the question. Definitely market dynamics are improving significantly. And reason that we can simplify are twofold. From one side, we are seeing additional demand.

This is in line with our expectation. We said demand would have come, for example, from Germany or from SAF close to the second half of the year and this is what’s going on. Second, there are a set of very good news both in EU and in U. S. About future demand target.

An example, Germany published a proposal on the Renewable Energy Directive three deployment and this proposal is moving the 14% of GAG reduction to 25% at 2,030. And they’re even setting a target for 02/1940, very relevant one. And second, they are proposing to get rid of the double counting feedstock. This means a significant increase of demand, even that every HVO will count for one and not for two. In U.

S, we have a similar situation. We have a proposal from the EPA for the new renewable volume obligation for 2026 and it’s a big step up in term of demand above 50%. And on top actually we got eventually approved the new LCFS target in California from 13% GAG to 22% starting July 1. This has been delayed compared to initial assumption, but now it’s there. So it’s going to start to make the difference.

And finally, it’s not a detail. We got clarification about the new clean fuel production credit, the so called 45Z that was fully of uncertainty until a few weeks ago and clarification create value. So these are pretty much the main reasons, structural reason underlying the market upside and improvement you are seeing right now.

Claudio Descalci, Chief Executive Officer, Eni4: What could be the demand uplift from the new proposals in Germany, especially the double counting, the removal?

Claudio Descalci, Chief Executive Officer, Eni6: On Germany, mean the yes, the expectation is to have an uplift around 1,500,000 ton. That’s a rough number, but it’s a very significant one. But we’re considering that actually we are already seeing an increase of around 5,000,000 this year in Germany and that we are coming from previous year of pretty much no demand. So this is all on top of all the other major trajectory.

John, Moderator/Host, Eni: Thank Alessandro. We’re going to move to Martin Rats at Morgan Stanley. Martin?

Claudio Descalci, Chief Executive Officer, Eni7: Yes. Hi, hello. I wanted to follow-up briefly on the comments that there is, at least depending on, I would imagine, the macro and other things, but that there is at a potential for the buyback to go up. If I’m not mistaken, on Page three of the statements, there is guidance that the pro form a leverage ratio will go up back into the 15% to 20% range by the end of the decade from the 0.1% level now. So it does suggest sort of quite a bit of an increase in gearing in the second half of the year, which in and of itself does not point in the direction of a lot of room for the buyback to go higher.

So I was wondering how you how these two things sort of relate to each other? And sort of perhaps sort of as part of that question, maybe you can give us a little bit of a refresher on the timing of the various disposal proceeds that are coming in, in the next couple of quarters. Maybe just more that sort of falls over the second half of this year. Is there sort of a timing impact there that leads you to think that leads you to suggest that the buyback might go up even though the gearing in the second half itself might still trend higher?

Francesco, CFO, Eni: Thank you, Martin. First of all, have to consider that range of 15% to 20% is a wide range and it was what we presented last at the beginning of the year. And this 20% or 15%, 20% means that potentially you could go you see towards the lower bar of this range. Secondly, there is in the scenario an assumption that certain businesses will generative clearly because we are assuming eventually in term of price of oil 68% consequently to the average for the full year or certain return that are lower. For example, we are assuming a quite conservative view on margin downstream margin.

We are now probably also taking into account some upside that are emerging in biofuel. And you have also to consider that in the pro form a logic, the disposal plan is already up and has already happened in term of event. But this doesn’t mean that it’s ended because we have a negotiation and opportunity that could emerge that are not included within evaluation of the range. So it’s a view, it’s a conservative approach so that take into account all risked disposals and also a certain scenario conservative and prudent scenario. So the two sentence about potential buyback uplift and the 15%, 20% are fully compatible one with the other.

Claudio Descalci, Chief Executive Officer, Eni7: Okay. Thank you.

John, Moderator/Host, Eni: Thank you, Martin. We are now going to move to Bertrand Hodi at Kepler. Bertrand?

Claudio Descalci, Chief Executive Officer, Eni8: Yes. Hello. I have two small questions. The first one is a clarification on the Argentina LNG. Do you intend to take an FID early twenty twenty six?

Or it was just the closing of the, I would say, agreement with YPF? And then the second question is also related to LNG, but to Mozambique. Eni has and partners have awarded partial awards to contractors. What we frame Eni at this stage to take a full final investment decision? And what will be the stake of E and I after everything is being closed on Coral Norte?

Thank you.

Guido, Executive, Eni: So on Argentina, yes, we are the plan is to have an FID by the Q1 of twenty twenty six, while the agreement with YPF on how to progress the project will be reached before that, of course. On Mozambique, we have as you may have noticed, we’ve got the government approval, full approval. And we are now in the process to progress and finalize the JV FID. However, we have already secured the long lead items. We have already secured the yards and all the critical element to secure the schedule of the project.

Claudio Descalci, Chief Executive Officer, Eni8: And your final state?

Guido, Executive, Eni: Sorry, say it again?

Claudio Descalci, Chief Executive Officer, Eni8: Because on Coral South, your participating interest was, if I remember, well, 25%. And on Coral Norte

Guido, Executive, Eni: We have 50% because we have an agreement with the with one of the other partner to swap interest between the onshore and offshore project. And so we have taken a higher stake in the offshore.

Claudio Descalci, Chief Executive Officer, Eni8: Okay. Okay. Got it.

John, Moderator/Host, Eni: Thanks, Petron. We’re going to move to Matt Lofting at JPMorgan next. So Matt, if you’re there.

Claudio Descalci, Chief Executive Officer, Eni9: Thanks all for the presentation. Congratulations on the strong strategic execution through the first half of the year. I think it’s been very impressive and important to acknowledge. Two questions. First, the production ramp up.

The guidance implies a strong ramp second half of the year versus first half. If you could just remind us of the, let’s say, the key milestones over the next sort of two, three months to derisk their full year target and perhaps where any risks could sit as well? And then secondly, the cash efficiency or cash initiatives that you highlighted in the press release this morning increasing from $2,000,000,000 to $3,000,000,000 I mean, it struck me the $3,000,000,000 is quite a significant proportion of CFFO and FCF on an underlying basis. So wondered if you could just expand there on the main initiatives and how perhaps underlying versus transitory some of them may be. Thank you.

Guido, Executive, Eni: On production ramp up, as you know, this was a very key year for the organic growth. We had five major projects coming and two in Norway, two in Angola and one in Italy. And basically three of them have been delivered. The last two are John Kasberg and Balderick’s in Norway. John Kasberg already reached his plateau production, while Balder is in its ramp up phase, which will be John completed by the end of the year.

We have a project in Angola coming very soon. It’s an FPSO of 170,000 barrel per day as overall capacity. We have also another project coming towards the end of the year, the NGC. It’s a gas project to feed the Angola LNG plant. And then we have the second floating LNG on Congo coming by the end of the year.

So of course, the whole production profile was back loaded. So we will have a pretty strong exit rate, which will set ourselves for a great 2026 also.

Francesco, CFO, Eni: About the cash initiative, clearly these are mainly related to working capital management, some cost efficiency, so nothing to do with the cash flow from operation or marginal impact in the cash flow from operation. Everything else is related to other lines of the cash.

Claudio Descalci, Chief Executive Officer, Eni8: Thank you.

John, Moderator/Host, Eni: Thanks, Matt. We’re now going to move to Massimo Bonasoli at Equita. Massimo?

Biraj, Analyst, RBC: I have just one question left on Libya. If you can provide an update on the status of your Libya gas projects, specifically the structures A and E? And what is the expected timing of first gas, please?

Guido, Executive, Eni: On Libya, actually, we have more than one project ongoing. We have three projects: one, which is monetization of some gas in one of our Mediterranean platform, which is will come on stream by the Q3 of next year. Then we have a compression project to expand the plateau of one of our offshore platform, which is forthcoming by the end of the year, would help to maintain the plateau. And we have the A and E structure where we are executing the main contract and the first production is expected by the end of twenty twenty seven, the first production.

Biraj, Analyst, RBC: Thank you.

John, Moderator/Host, Eni: Good. Thanks, Massimo. Into the final stretch, we have Paul Redman at BNP Paribas. Paul, are you there?

John, Moderator/Host, Eni0: Yes. Thank you very much for allowing me to ask some questions. I’ve got two relatively brief ones, I think. The first one is just on the CFFO guidance upgrade. If I run the sensitivities and have a little bit more on for GDP uplift, I’m just trying to work out why the increase in CFFO from last quarter, I.

E, the guidance for the year is not as much as the sensitivities would suggest. And secondly, when we talk about these working capital initiatives for 2025, should I call these as one offs? They can’t be replicated in 2026. Is that how I should think about it?

Francesco, CFO, Eni: Yes. About the cash flow from operation increase, this is related to the fact that substantially you have to take into account that the scenario is not just Brent and FX. So scenario is biofuel, is power, is margin, is chemical, is a lot of stuff. And therefore, these are clearly not completely reflected in the benchmark when you provide them the simple calculation of three metrics. So there is an uplift on the scenario on valuation in performance versus the scenario and this is what is happening taking into account of all the variable and not just the three that you are referring to.

About the cash initiative, you have to consider cash initiative are an improvement in the way you manage your cycle of payment. And therefore, the time you apply this on the first element or the first step is a step up and then you continue to roll over this initiative in all the remaining year and the following year. So this is a way to change the way you manage your cycle of payment and your cycle of storage.

John, Moderator/Host, Eni: Thanks, Paul. And finally, and thanks for your patience, we’re going to move to Matt Smith at Bank of America for the final question. Matt, if you still there.

John, Moderator/Host, Eni1: Hi there. Thanks, John. Thanks, everyone. Just one left from me, which I don’t think we’ve covered. Coming on to GDP gas trading, another strong quarter.

Once again, for E and I, just it’s been an interesting quarter for trading performance across the space. At some point, it’s a good result, some less good and unusually talking about too much volatility for the traders in some sense. So I just wanted to pick up, obviously, how you saw the opportunities in the quarter clearly played out quite well, but how you see the rest of the year in the current conditions? How conducive is it for that business to keep outperforming, please? Thank you.

John, Moderator/Host, Eni2: Well, thanks for the question. In terms of performance this quarter has been marked by two elements. One is the one off settlement that we discussed before. And the second one also was the fact that the volatility as you said has been somehow less than first quarter twenty twenty five, but still in a good shape, especially I would say on the LNG global scenario because of the volatility between JKM and ETF and oil. So that allowed us to take advantage of fuel arbitrage opportunities globally and that set up that result for this quarter.

John, Moderator/Host, Eni: Okay. Thank you, Matt. Thank you, Christian. That wraps us up for the second quarter call. Thank you to everybody for attending.

Any follow ups then myself and the team are available for your questions. And if we don’t speak, have a great summer, and we’ll see you again in the autumn. Goodbye.

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