Eni (E) Q3 2026 earnings review
Eni raises its payout, but price caps will cut profit
Eni earned far more from oil, gas and refining than a year ago, and handed most of the extra cash to shareholders. Profit excluding one-offs more than doubled to €2.8 billion as refining margins tripled and production grew. Finance chief Francesco Gattei raised the cash flow outlook to €16.5 billion, added a special dividend and enlarged the buyback.
| Cash from operations, before working capital | €4.29B +30% from a year ago |
|---|---|
| Profit excluding one-offs | €2.80B 2.2 times a year ago |
| Underlying production growth | 7% full-year target now 6-7% |
| Full-year cash flow outlook | Raised to €16.5B €15.0B in July |
⚖️ Verdict: 🟢 Bullish
The story got better because Eni raised its targets for production, cash flow and payouts at once, with debt at its lowest level ever. The bad news: Plenitude cut its profit target as rivals poached retail customers, and the chemicals arm is still losing money. One caution: the fuel price caps Eni introduced in Italy will cost a few hundred million euros a quarter.
The question now is how much of this profit survives when refining margins and oil prices come back down. One answer is that higher production and the satellite stakes now carry the cash flow on their own; the other is that the record rests on a refining margin that is already fading, near $18 so far this quarter against $28 last. The fourth-quarter refining result and the price cap bill will tell.
🐂 Bull Case
Production Growth Lifted Upstream Profit by Three Quarters
Eni pumped 1.83 million barrels of oil equivalent a day, 4% more than a year ago. New fields in Congo, Mexico and Norway ramped up, and Searah, the venture with Petronas in Indonesia and Malaysia, added its first full quarter. Stripping out assets Eni sold or swapped, chief executive Claudio Descalzi said "E&P again delivered outstanding underlying production growth of 7%".
Exploration and production earned €4.6 billion before interest and tax, 76% more than a year ago. Volumes rose while oil prices averaged two fifths higher, so both levers pulled the same way. The partly owned companies did much of the lifting: Vår Energi in Norway earned two and a half times its year-ago result, and the share of profit from these stakes keeps climbing.
- Gas output: up 10% from a year ago, to 5,148 million cubic feet a day
- Liquids output: down 2%, to 845 thousand barrels a day
- Production from partly owned companies: 35% of the total, from 28% a year ago
- Realised price per barrel equivalent: $69, up 33%
Volumes matter more than price here, because the price is not Eni's to keep. Growth is now running well ahead of the original plan of 3-4%, so finance chief Francesco Gattei raised the full-year target to 6-7%, the second increase this year. Even if Brent falls back, the base from which Eni earns is larger than it was.
What to watch: fourth-quarter production against the 6-7% full-year target, with Kazakh export limits and the Middle East still a drag. A reading at the top of the range would mean the new fields are running ahead of plan.
Refining Profit Rose Fivefold on Wider Margins
Eni's refineries turn crude into diesel and petrol, and the gap between the two prices, which it calls the standard refining margin, averaged $28 a barrel against $9 a year ago. Disrupted flows from the Middle East and plant closures in Europe and the Americas kept diesel scarce. Refining earned €727 million before interest and tax, five times the year-ago figure, with the Italian plants running at 86% of capacity.
The release says the gain was "partly capped by higher shipping costs" and by narrower discounts on heavy crude. Across the group, the cost of purchases and services fell to 81% of sales from 83%, by our math, so the margin widened. This is the least repeatable part of the quarter, because the margin has already dropped: Gattei said "The quarter today is $18", about a third below the third-quarter average. Eni covers about 60% of its shipping under long-term contracts, trading head Stefano Poyatti said, and passes most of the rest to buyers.
What to watch: the fourth-quarter refining result against this quarter's €727 million. A result above half of it would mean the plants kept most of the gain even as the margin fell.
Cash Flow Funds a Special Dividend and a Bigger Buyback
Eni generated €4.3 billion of cash from operations before working capital, 30% more than a year ago. Oil prices fell from the second quarter, so the growth came from volumes, refining and trading. Gattei said Eni is "bringing our debt down to its lowest level ever", and used the room to pay out more. The buyback rises to €3.8 billion, the third increase this year, and a special dividend of €0.46 a share arrives in December.
- Full-year cash flow outlook: €16.5 billion, from €11.5 billion at the start of the year
- Total payout for 2026: €8.2 billion, half of that cash flow
- Returns to shareholders in the quarter: €1.9 billion, 44% of cash flow by our math
The payout follows a formula: Eni returns 60% of cash flow above its budget up to $90 Brent, and all of it above that. So the special dividend is not a change of policy but the policy working at $97 oil. Asked whether Eni could end up with net cash, Gattei said "It is not in our assumption", though he added it could happen if prices stay high.
What to watch: fourth-quarter cash flow against the €4.9 billion the full-year outlook implies by our math, with Plenitude now contributing only dividends. A figure at that level would confirm the outlook was set with the usual caution.
Biofuel Margins Doubled Enilive's Profit Despite Lower Volumes
Enilive is Eni's biofuels and fuel-retail arm, and it had its best quarter yet. Profit before interest and tax rose 76% to €410 million. Almost all the gain came from biorefining, where the European margin on diesel made from used cooking oil widened by two fifths from a year ago.
The volumes went the other way. Enilive processed 17% less bio feedstock than a year ago because it shut the Venice and Gela plants to reconfigure them. Its biorefineries ran at 71% of capacity, against 85% last year, so the record came from price, not from the plants.
Margins are the part Enilive does not control, so the question is whether policy keeps them wide. Enilive head Stefano Ballista expects it to: seventeen European countries have adopted the renewable fuel directive, and US producer credits now have "extra clarity", he said. Gattei raised the full-year target for earnings before depreciation to €1.4 billion, but by our math that leaves the fourth quarter at €318 million, a third below this quarter.
What to watch: fourth-quarter bio throughput once Venice and Gela restart, against the 262 thousand tonnes processed this quarter. Higher volumes at a narrower margin would show the business depends less on the spread.
🐻 Bear Case
Plenitude Cut Its Target as Rivals Took Customers
Plenitude is Eni's retail power and gas supplier and renewable generator, and the presentation labels its quarter "Renewables-led growth". Earnings before depreciation fell 8% from a year ago to €204 million. Gattei then trimmed the full-year target, the only cut in the outlook. It now stands at about €1.2 billion, from €1.3 billion.
New rivals are "entering the market with aggressive policies", Gattei said, and a summer heatwave forced Plenitude to buy power at spot prices for its customers. Gas sales to end customers fell 13%, while power sales rose 32% only because Plenitude bought Acea Energia's customer book.
This matters because the renewables are growing as promised, but retail is where most of Plenitude's earnings sit, and Eni has now joined the price war with a 30% discount on the raw-material part of its tariffs. Operating profit rose 95% only because Eni stopped depreciating Plenitude's assets ahead of the change of control, so the headline flatters the quarter.
What to watch: Plenitude's fourth-quarter earnings before depreciation, which by our math must reach about €455 million for the full-year target to hold, more than double this quarter. A miss would mean the discounts cost more than the few million Gattei estimated.
Chemical Losses Persist, Break-even Now Set for 2028
Versalis, Eni's chemicals arm, lost €178 million before interest and tax, about the same as a year ago, after a brief recovery in the second quarter. Its plants ran at 43% of capacity. The release blames "a sharp deterioration in products margins": feedstock and energy costs rose and could not be passed on to plastics buyers.
Versalis chief executive Adriano Alfani said the transformation plan now saves almost €90 million a quarter, but that this is "offset completely by utilities and by the negative scenario". He also cited the end of import duties against US producers from 1 July, which leaves European plants more exposed. The target has moved too: a year ago Eni spoke of break-even in 2027, and Gattei now calls the business "on track towards its target of break-even in 2028".
What to watch: the capital markets day next year, where Alfani promised to show how Eni will speed up the transformation. A plan that depends on demand recovering would mean another year of losses at this size.
Italian Price Caps Will Cost Hundreds of Millions
At the end of September Eni capped diesel and petrol at its Italian stations about 17 cents a litre below market, under an initiative it calls "Eni for Italy". Plenitude followed with a 30% discount on the raw-material part of its energy tariffs, and farm and fishing customers get 20% off fuel.
Gattei put the cost of the fuel cap "in the range of a few hundred millions" a quarter at current prices and said Eni will review it periodically. He framed it as social responsibility for a supplier of a basic need. Enilive head Stefano Ballista said the pricing is already winning customers: "There is a significant market share gain", with Italian retail volumes up 11%.
This matters because Enilive's retail arm just earned a record, and the cap started on the first day of the next quarter. Against €4.3 billion of quarterly cash flow the sum is manageable, but it is a cost Eni chose, and the cap can run to year-end and be extended again. It also shows that Italian energy profits of this size are hard to keep politically.
What to watch: the fourth-quarter cost of the caps, which Gattei should quantify, and whether they run into 2027. A cost at the top of "a few hundred millions" would absorb most of Enilive's quarterly profit.
👓 Other Themes
Venezuela and Argentina Are Next Year's Growth Story
Eni signed a 25-year contract to operate the Junín 5 heavy-oil field in Venezuela, which today produces only a trickle. Upstream head Guido Brusco expects a first phase of 200,000 barrels a day within two years of approval, with long-run potential of one million. Brusco confirmed "Venezuela is not included" in the 600,000 barrels a day of new 2030 output sanctioned this year, and Argentina LNG awaits a year-end investment decision.
Plenitude Leaves Eni's Accounts From the Fourth Quarter
From October Eni reports Plenitude as a joint venture, after Ares subscribed most of a €1.56 billion capital increase that cut Eni's stake to 65%. Plenitude's debt leaves Eni's balance sheet, which lowered gearing by four points, and its cash flow now arrives only as dividends. The change booked a gain of about €1.5 billion in reported profit, alongside about €2 billion from folding Indonesian assets into Searah; neither sits in adjusted profit.
💲 Other KPIs
Net debt fell by €4.6 billion in the quarter and by €2.8 billion since December. Moving Plenitude off the books accounted for about €2.75 billion of the drop; the rest came from cash flow and a €1.75 billion payment from investors for a stake in infrastructure assets. Gearing is 10% reported and 9% pro forma, below the 10-15% range Eni targets.
The share count fell 4.1% from a year ago as buybacks continued. Eni had bought 85 million shares for €1.95 billion by mid-October, so by our math about €1.85 billion of the €3.8 billion programme remains for the next six months. A smaller count lifts profit per share faster than profit itself.
Gas volumes sold rose 16% from a year ago, with Italy up 28% and the rest of Europe up 2%. The trading arm turned the volatile market into €407 million of profit, 46% more than a year ago, without the one-off contract gains seen in the second quarter.
🔮 Guidance
Raised. The plan now has underlying production growing 6-7% this year, from about 5% in July. This quarter ran at 7%, so the target implies the fourth quarter holds near this pace despite Kazakh export limits and Middle East disruption. Second increase this year, each of 1.5 points.
Raised. Gas and LNG trading should earn about €1.5 billion this year, half as much again as the €1.0 billion plan in March. By our math that leaves about €310 million for the fourth quarter, below this quarter's €407 million but more than double the year-ago fourth quarter. Third raise this year; each is smaller than the last: +€0.3, +€0.1, +€0.1 billion.
Raised. Earnings before depreciation should reach €1.4 billion, from €1.3 billion in July. By our math that leaves €318 million for the fourth quarter, a third less than this quarter, as the Venice and Gela plants stay down and the Italian fuel cap bites. Almost 30% above the original plan.
Cut. Plenitude should earn about €1.2 billion before depreciation, from €1.3 billion. By our math that requires about €455 million in the fourth quarter, more than double this quarter and above the €308 million of the first quarter, the other winter period. The retail price war and the new 30% discount make that a stretch.
Unchanged. Capacity stood at 6.1 GW at the end of September with 1.2 GW more under construction, so the last 0.4 GW must arrive in one quarter. Enilive's 0.5 million tonne biorefinery addition should reach mechanical completion at year end, on top of 1.65 million tonnes available.
Raised. Cash from operations before working capital should reach €16.5 billion, from €15.0 billion in July. By our math that leaves about €4.9 billion for the fourth quarter, above this quarter even though Plenitude now contributes only dividends. Third raise this year: +€2.3, +€1.2, +€1.5 billion. The plan assumes Brent at $95 and a refining margin of $18.
Unchanged at €7 billion. Organic spending reached €5.1 billion in nine months, so by our math the plan leaves €1.9 billion for the fourth quarter. That is well above the €1.3 billion spent in the third. Gattei expects a lower second half now that Plenitude and the Indonesian assets have left the books, so the year likely ends under the figure.
Lowered to below €4.5 billion from below €5 billion, because disposals and partner money, including the €1.8 billion infrastructure deal, offset more of the spending. Eni keeps the gross figure and shrinks the net one, which is how the satellite model is meant to work.
Unchanged range, now pinned to its low end. Gearing stood at 10% reported and 9% pro forma at September. Gattei said a net cash position is "It is not in our assumption" but could happen if prices stay high; the extra cash goes to shareholders rather than to more debt reduction.
Raised. €3.8 billion from €3.4 billion, 12% more and the third increase this year. Each raise is smaller than the last: +€1.3, +€0.6, +€0.4 billion. Eni had bought 85 million shares for €1.95 billion by mid-October. The formula returns 60% of cash flow above budget up to $90 Brent.
New. Paid on 9 December under the policy that returns all cash flow upside once Brent is forecast above $90 for the year. Total cash dividends for 2026 rise to €4.4 billion, the most in Eni's history, and the full payout reaches €8.2 billion.
Unchanged. €1.10 a share, 5% more than 2025, paid in quarterly tranches; the tranche paid this quarter was €0.8 billion. Gattei said cash flow covers the ordinary dividend more than five times.
❓ Key Questions
How much will the Italian price caps cost in the fourth quarter?
Gattei said a few hundred million euros a quarter for the fuel cap and a few million for Plenitude's discount. An exact figure, and whether the cap continues into 2027, decides how much of Enilive's record profit repeats.
Is Versalis aiming for break-even in 2027 or 2028?
A year ago the target was 2027; Gattei now says 2028. The chemicals arm lost €178 million this quarter, so each year of delay costs several hundred million euros.
How does Plenitude double its earnings by December?
The lowered full-year target still needs about €455 million in the fourth quarter by our math, against €204 million this quarter, while Plenitude offers a 30% discount to new Italian customers.
Will fourth-quarter spending really reach €1.9 billion?
The €7 billion plan leaves that much for the last quarter by our math, against €1.3 billion spent in the third. Gattei expects less; a lower figure would add to free cash.
What tax rate applies in 2027 at a normal oil price?
The adjusted rate fell to 32% from 42% on geographic mix and the satellite stakes. Gattei said the structural part persists but gave no range for next year, which matters for profit at lower prices.