Financial Data and Key Metrics Changes - Adjusted net profit increased by 17% quarter-over-quarter to €2.9 billion despite an 8% decline in oil prices and a significant drop in gas prices [10] - Cash flow from operations was notably strong at €5.3 billion, only 6% lower year-on-year and nearly 30% higher compared to the last quarter of 2022 [20] - Net debt remained flat at a historically low level, indicating financial resilience and flexibility [12] Business Line Data and Key Metrics Changes - The upstream segment showed resilient profitability, with production flat year-on-year but up 2.4% sequentially, aligning with guidance for 2023 [22][23] - GGP (Gas and Power) achieved record EBIT, benefiting from market volatility and strong performance despite lower gas prices [63] - Downstream performance was impacted by high levels of planned refinery maintenance, but sustainable mobility and trading contributed positively [54] Market Data and Key Metrics Changes - The European gas market is expected to be less critical this summer compared to the previous year, with higher storage capacity easing price pressures [45] - The company anticipates more volatility in the winter due to unpredictable weather conditions [46] - The Italian and European markets are seeing a shift towards biofuels, with mandatory quantities increasing annually [32] Company Strategy and Development Direction - The company is focusing on biofuel investments in Europe and the U.S., with plans to expand into the Far East [2] - A joint venture with PBF Energy aims to establish a biorefinery in Louisiana, contributing to a target of over 3 million tonnes of biorefinery capacity by 2025 [39] - M&A activity is a key part of the strategy, with recent acquisitions aimed at enhancing portfolio value and sustainability [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changing market conditions, particularly in the gas sector following the loss of Russian supply [46][120] - The outlook for GGP remains strong, with expectations for continued profitability despite market volatility [76] - The company is on track to achieve a 50% replacement of Russian gas by 2022-2023 and aims for 80% by 2023-2024 [46] Other Important Information - The Livorno lubricant refinery is undergoing maintenance, with plans to transform it into a biorefinery [14] - The company confirmed a buyback plan of €2.2 billion and an increase in dividends to €0.94 per share [31] - The company is targeting a shift in production mix to 60% gas by 2030, with ongoing projects in various regions [65] Q&A Session Summary Question: Can you provide insights on cash flow guidance and underlying performance? - Management confirmed that cash flow from operations is improving, with a reduction in expected negative impacts from gas prices and foreign exchange rates [4][5] Question: What is the status of new gas opportunities in Cyprus and Australia? - Management indicated that recoverable volumes from Cyprus are still being assessed, with potential for new gas opportunities in the future [6][26] Question: How is the Livorno refinery project progressing? - The Livorno refinery is in maintenance, with plans for transformation into a biorefinery expected to be finalized by summer or early autumn [14] Question: What are the expectations for the European gas market this summer? - The company expects a less critical summer compared to last year, with higher storage levels easing price pressures [45] Question: Can you elaborate on the strategic partnership with ADNOC? - The partnership aims to explore opportunities for reducing emissions and developing carbon capture projects in the UAE and internationally [99]
Eni(E) - 2023 Q1 - Earnings Call Transcript