Eni pledges higher returns as business looks up

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The logo of Italian energy company Eni is seen at the booth of Eni during the Nigeria International Petroleum Summit in Abuja, Nigeria February 10, 2020. REUTERS/Afolabi Sotunde

MILAN, July 30 (Reuters) - Italian energy group Eni (ENI.MI) pledged higher shareholder returns after turning in one of its best half yearly performances in a decade boosted by firmer oil prices.

In the first six months the group swung to an adjusted net profit of 929 million euros ($1.1 billion), from a 714 million euro loss a year earlier, beating a 570 million euro consensus.

Chief Executive Claudio Descalzi said the results, outlook and a new Brent reference scenario of $65/bbl had allowed the group to increase its dividend back to pre-COVID levels.

"This set of results is one of the best in the last 10 years," Descalzi told analysts in a conference call on Friday.

Eni, which cut its dividend last year to 0.36 euros, said it would pay a 2021 dividend of 0.86 euros per share and launch a 400 million euro share buyback in the third quarter.

In a note Santander said the results were strong with a major step-change in cash returns. "We see a consequent positive trading reaction vs peers short term," said oil analyst Jason Kenney.

Eni shares were up 0.2% at 1400 GMT while the European Oil & Gas index (.SXEP) was down 1.3%.

The hike in returns follows similar moves at peers like Shell (RDSa.L), as the industry signals confidence in a lasting recovery from the pandemic, reassuring investors on the roll out of risky climate strategies. read more

Eni has launched one of the industry's most ambitious clean-up strategies, pledging carbon neutrality by 2050 and shifting into clean energy as it phases out oil production.

On Friday the group, which is targeting renewable capacity of 15 GW in 2030, doubled its forecast for this year to 2 gigawatts after snapping up a series of renewable energy portfolios in recent weeks. read more

The acquisitions were focused on the Italian, Spanish and French markets where Eni is looking to grow its retail client base.

The group is merging retail and renewable energy to generate synergies and help the group decarbonise. It plans to list or sell a minority stake in the unit next year.

Descalzi, who said the group would roll out green capacity on its own sites round the world, said the recent deals had gone through at multiples of some 9-10 times core earnings.

"We have accelerated drastically in view of the new company."

($1 = 0.8422 euros)

Reporting by Stephen Jewkes; Editing by Maria Pia Quaglia, Kirsten Donovan and Mike Harrison

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