Eni(US:E)2022-07-31 18:11Financial Data and Key Metrics Changes - EBIT for the first half of 2022 was €11 billion, with €5.8 billion generated in the second quarter [17] - Cash flow from operations (CFFO) reached €10.8 billion in the first half, fully funding capital expenditures of €3.4 billion and the euro distribution plan [17] - Net debt was reduced to 15% leverage, confirming financial resilience [19] Business Line Data and Key Metrics Changes - Upstream division delivered nearly €5 billion of EBIT in the second quarter, with expected production increases in the second half of 2022 due to project ramp-ups [20] - Refining & Marketing (R&M) saw a significant increase in utilization rates, reaching 90% in the second quarter, contributing to strong financial results [24] - Plenitude's EBITDA reached €119 million, nearly 50% of the total for 2021, driven by renewable contributions and retail performance [26] Market Data and Key Metrics Changes - Gas security is a critical focus, with initiatives designed to deliver up to 20 BCM of gas supply by 2025, covering 100% of 2021's Russian gas imports [14] - European gas demand has seen a reduction, with Italy experiencing a 2% drop and Northern Europe seeing a more significant decrease [50] Company Strategy and Development Direction - The company is advancing its energy evolution strategy, focusing on sustainable mobility and increasing renewable energy capacity through Plenitude [34] - Eni is creating a partnership with BP in Angola, aiming to establish a strong upstream player in Africa [10] - The company is committed to achieving net zero Scope 3 emissions in mobility by establishing a dedicated sustainable mobility company [11] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of flexibility in gas sourcing and financial hedging to navigate market volatility [16] - The company expects to maintain free cash flow positivity even in the event of a complete shutoff of Russian gas supplies [70] - Future production guidance is set at 1.67 million barrels per day, with exploration expected to exceed original outlooks [30] Other Important Information - The company announced a buyback program of €2.4 billion, an increase of €1.3 billion from the original target [28] - The annual CapEx is expected to remain unchanged at €8.3 billion [32] Q&A Session Summary Question: What is the cost of the windfall taxes for Eni this year in Italy and the UK? - The total cost of the two taxes is approximately €800 million annually, with payments structured in installments [36] Question: How does Eni's strategy for Plenitude change if IPO conditions remain difficult? - The strategic focus remains on Plenitude itself, with the IPO being a tool for value creation rather than the primary goal [37] Question: What is the potential for additional Coral floating LNG facilities in Mozambique? - Discussions are ongoing for a possible additional offshore development through LNG, with a focus on small-sized, fast LNG projects [41] Question: How much percentage-wise has Eni reduced gas consumption in refineries? - Gas consumption in refineries has been reduced by approximately 70% compared to previous levels [45] Question: What is Eni's market share in gas distribution for households in Italy? - Eni sells gas to residential customers on both fixed and variable price contracts, with a hedging strategy in place [54] Question: What is the outlook for refining margins for the rest of the year? - Refining margins are expected to average around $5 to $6 per barrel in the second half of the year, despite high volatility [78] Question: Can Eni meet its natural gas contractual obligations without Russian gas? - Eni can meet its obligations without additional costs from Russian gas, thanks to flexibility in sourcing and existing contracts [90]