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Amid the oil price crash and macro headwinds, Eni SpA (NYSE: E) on Thursday reduced its capital expenditure plans for 2025 and vowed to cut more costs as it maintained the planned shareholder distributions such as dividend and buybacks.
The Italian energy major reported an adjusted net profit of $1.6 billion (1.41 billion euros) for the first quarter of the year, down by 11% from the same period of 2024. The earnings beat a company-provided consensus forecast of $1.3 billion (1.15 billion euros).
Analysts are watching how oil majors will be approaching the recent oil price slide and whether the market rout will affect the 2025 shareholders’ distributions which the companies promised just two months ago.
In Eni’s case, no cuts to payouts to shareholders were announced, which sent Eni’s shares in Milan rising by 1.88% at 1:51 p.m. local time.
The company kept its pledge to increase 2025 dividend by 5% and begin a buyback program of $1.7 billion (1.5 billion euros), subject to approval at the Annual General Meeting on May 14.
To keep shareholder distributions at the current price environment, Eni is lowering net capex by up to $1.13 billion (1 billion euros).
Mitigating actions around capex, portfolio, costs, and and other cash initiatives are expected to offset more than $2.27 billion (2 billion euros) of negative scenario effects, said Eni, which is optimizing its 2025 spending plan and will employ its portfolio optionality “in response to macro headwinds and uncertainty around trade tariffs.”
“Looking ahead we are well positioned to navigate the current downturn. Thanks to our high-quality, high-graded asset portfolio that provides us with significant flexibility, low cash breakeven and resilient financial structures, ensuring disciplined capital allocation and self-funded growth, we are able to optimize our spending and cash plans,” Eni CEO Claudio Descalzi said.
“As a result, we have identified over €2 bln of mitigating actions, equivalent to around 15 $/bbl of oil price sensitivity effect, and we are able to confirm our 2025 distribution policy within the context of a highly robust financial structure.”
By Michael Kern for Oilprice.com
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