Eni boosts payout after profit doubles, shares near 20-year highs (updated)

Eni SpA

Today 07:02

Adjusted net profit beat analyst consensus at €2.8 billion 
Shares reach highest level since July 2007
Refining profit jumps to €730 million 
Adds share reaction, graphics, details
By Francesca Landini
MILAN, Oct 23 (Reuters) - Italian energy group Eni ENI.MI said it would pay a €1.3 billion special dividend and increase its share buyback programme after its third-quarter net profit more than doubled from a year ago, propelling its shares to a near 20-year high. 
The state-controlled company's adjusted net profit for the July-September period was €2.8 billion, above a company-compiled analyst consensus of €2.5 billion and sharply up from €1.3 billion a year earlier.
Eni also raised its guidance for underlying cash flow from operations to €16.5 billion from €15 billion. 
"We are further raising the distribution by an extraordinary dividend of €0.46 per share to be paid in the fourth quarter and increasing again the buyback to €3.8 bln, underscoring our continued commitment to sharing upside with shareholders," CEO Claudio Descalzi said in a statement.
 Shares in the group rose 4% by 0858 GMT to €27.15, just shy of a session peak which set a high since 2007 and bucking a negative Milan blue-chip index .FTSEMIB, according to LSEG data.
"Eni reported a strong set of results... driven by stronger results in the refining segment versus consensus and our expectations, as well as a lower effective tax rate," RBC analyst Biraj Borkhataria said in a report.
Eni rivals including BP BP.L and TotalEnergies TTEF.PA are also expected to post a big jump in third-quarter profit, with refining and trading earnings boosted by the US-Israeli war on Iran which has pushed energy prices to multi-year highs.
Investors are focused on how firms will use the extra cash. 
The Italian group continued to show higher-than-expected growth in production. Eni has discovered 1.23 billion barrels of new hydrocarbon resources so far this year, well above its target.
Underlying hydrocarbon production rose 7% year-on-year to 1.83 million barrel of oil equivalent per day (boe/d) in the third quarter.
This was driven by project ramp-ups in West-Africa, Mexico and Norway and a contribution from Searah, a joint venture launched with Malaysia's Petronas.
Eni now expects production to increase by between 6% and 7% this year as it advances with upstream projects in southeast Asia, Latin America and Africa, it said.
The refining business posted a €730 million pro-forma operating profit, up sharply year-on-year thanks to improved plant utilization rates despite higher shipping costs, Eni said.
As for the low-carbon businesses, Eni's biofuel unit Enilive reported an 80% year-on-year increase in its pro-forma adjusted operating profit.

 (Reporting by Francesca Landini, additional reporting Mirko Miorelli editing by Giulia Segreti, Gavin Jones and Valentina Za)
 ((francesca.landini@thomsonreuters.com; +39 02 66129437; Reuters Messaging: reutersitaly.thomsonreuters@reuters.net/))