MILAN, April 30 (Reuters) - Italian energy group Eni
is planning to spin off a minority stake in its new
retail and renewable business next year, it said on Friday,
after announcing first quarter profits that missed expectations.
Several European energy companies, including Spain's Repsol
, aim to divest parts of their renewables business to
raise money to reduce debt and pay for the shift away from oil
Eni said it planned to list or sell a minority stake in the
business that includes renewable energy and retail energy sales
next year, confirming a Reuters report from March.
Analysts at Jefferies said the business, which has 10
million customers and plans to grow green power generation to
over 5 gigawatts (GW) by 2025, could be worth 9 billion euros
($10.89 billion) including debt.
Eni expects the new unit to almost double its core earnings,
or EBITDA, by 2024 to 1 billion euros.
"The combination of these two entities clearly could move
the vehicle to the range of a double-digit multiple (to
EBITDA)," CFO Francesco Gattei said on a call with analysts.
In the first quarter, Eni's adjusted net profit jumped
almost five times to 270 million euros ($327 million) as firmer
oil prices offset lower production.
The result was below an analyst consensus of about 440
million euros, in part due to a weaker performance in gas and
refining margins. Cash flow from operations fell 12% to 1.6
"That's less scope for upwards estimate revisions that peers
will benefit from coming out of earnings," said Bernstein.
At 1422 GMT Eni shares were down 2.4% while the European
oil&gas index was down 0.4%.
Pandemic lockdowns throttled fuel demand last year prompting
energy groups like Eni to rein in investments and returns. But
Europe's energy companies this year have posted increased
earnings boosted by higher oil prices as demand starts to pick
"We have been able to improve our outlook for the coming
months, forecasting free cash flow generation in 2021 of more
than 3 billion euros," Chief Executive Claudio Descalzi said.
The group, which confirmed a full-year production target of
about 1.7 million barrels of oil equivalent a day, hiked its
cash flow from operations target to more than 9 billion euros,
from less than 8 billion euros previously.
It said it was looking for acquisitions to grow its green
business to reach 4 GW of renewable capacity by 2024 from 1 GW
this year, with a focus on the U.S. and southern Europe.
In 2021 the company expects to make disposals worth around
500 million euros while buying assets worth 1 billion euros.
It also said its share buy-back programme was expected to
resume with a Brent reference price of at least $56.
"Eni is in very good shape... the premises are good," Gattei
($1 = 0.8267 euros)
(Reporting by Stephen Jewkes; Editing by Edmund Blair, Barbara
Lewis and Louise Heavens)