Eni Q3 2026 Earnings Call Transcript
Eni (NYSE:E) reported third-quarter financial results on Friday. The transcript from the company’s third-quarter earnings call has been provided below.
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View the webcast at https://www.eni.com/en-IT/investors/forms/2026-third-quarter-results.html
Summary
Eni reported strong Q3 results with significant growth in upstream production, driven by successful exploration and new projects in diverse geographies such as Congo, Libya, and Côte d’Ivoire.
The company achieved a record low debt level and strong cash flow, enabling an increased share buyback program and a special dividend, highlighting its robust financial position.
Eni’s strategic focus on energy transition is evident with advancements in LNG contracts, CCS projects, and significant developments in Venezuela and Argentina.
The company revised its full-year cash flow guidance upwards by 43% to €16.5 billion, supporting a substantial dividend payout and buyback plan.
Management highlighted the importance of maintaining a balanced portfolio, with key growth in LNG and biorefining sectors, despite challenges in the chemicals segment due to market conditions.
Full Transcript
OPERATOR
Good afternoon, ladies and gentlemen, and welcome to Eni’s 2026 third-quarter results conference call, hosted by Mr. Francesco Gattei, Chief Financial Officer. For the duration of the call you will be in listen-only mode. However, at the end of the call you will have the opportunity to ask questions by pressing star one on your telephone. I am now handing you over to your hosts to begin today’s conference.
Francesco Gattei (Chief Financial Officer)
Thank you, thank you. Good afternoon and welcome to Eni Q3 conference call. In this quarter Eni has shown once again that this strategy is working and delivering outstanding results. We are driving distinctive real asset-driven organic growth in both the upstream, expanding into new geographies with major projects and in our new businesses linked to the energy transition. At the same time we are generating strong cash flow and bringing our debt down to its lowest level ever.
As we grow, we want all our shareholders to share in the upside. That is why we combine our industrial strategy with a progressive distribution policy that has also reached a record level. Before describing our additional distribution, let me highlight the key milestone of this quarter and of 2026 starting with upstream where production growth is already sector leading. Propelled by our differentiated industrial, organic, technology-led capabilities, we have already had a standout year for exploration, even when set against a decade-long track record of success. We’ve discovered resources of more than 1.2 billion barrels. Our technical rate of success is 80% and our commercial rate is 70%.
Really remarkable, but remarkable still is that this has been achieved with a discovery cost of below $1 per barrel. Strong execution of our strategy has enabled us to raise our full-year underlying production guidance to 6.7%. The growth primarily comes from Congo, Libya, Côte d’Ivoire, Mexico, Ghana and from the business combination in Indonesia, Malaysia called Ceara and comes despite the complex operating environment in the Middle East and constraints on Kazakh exports, and we are locking in future production growth with key FID this year of Baleine Phase 3 in Côte d’Ivoire, Kutei North and Gendalo and Gandang in Indonesia, Kronos in Cyprus and Greater Pashi in Angola.
Nor is volume growth our single target. We are guided by value. Hence, through our dual exploration valorisation in Côte d’Ivoire and Indonesia we have raised around $2 billion of accelerated value. On top of that we are working up an unprecedented level of access to discovered resources, employing our technology and fast-track development skills to mature opportunities in Venezuela and Argentina. Our two listed satellites are also adding new resources with Vår Energi and Ithaca recently announcing acquisitions expanding their geographical footprint and deepening their resource base in Denmark and Canada respectively.
A proof point in their delivery of value is that both companies recently reached record market capitalization with an equity stake value for Eni now at around 10.5 billion euro, almost doubling the original level. Our gas and LNG strategy is delivering tangible value already. New LNG supply contracts signed in Indonesia and Cyprus for a total of up to 3.4 million tonnes per year strengthen the path towards our target of more than 20 million tonnes per year of LNG equity production by 2030 and support the increase of our 2026 full-year pro forma EBIT guidance to around 1.5 billion euro. As to the CCUS business, this year we completed the installation of the new Douglas CCS platform in Liverpool Bay, the world’s first purpose-built offshore platform dedicated to industrial-scale CO2 transportation and storage.
We have also progressed the development of the Ravenna Phase 2 project, securing further support through the award of European Commission’s Innovation Fund. It is worth looking at this in the context of our expanding and increasingly balanced global footprint. Exploration success has come in West Africa, Egypt and Indonesia. It is a mix of infrastructure-led in known plays and higher-impact discoveries, but all representing considerable value. We have built and strengthened four major growth hubs across the Far East, the Americas, Africa and the Mediterranean, giving us a deep and diversified resource base.
Projects sanctioned in full year 2026 will deliver at around 600,000 barrels per day of new production at 2030, underscoring the scale and quality of our development pipeline. And this is a continuously evolving portfolio. New agreements and additional opportunities have been identified or implemented in 2026 contributing around 4.6 billion barrels of oil equivalent of additional equity resources. Let me also take a moment to update in a bit more detail on our progress in Venezuela where we appreciate things have been moving very quickly. In early September we signed the new contractual regime that will govern the Junín 5 field for the next 25 years. We have already submitted the development plans to the Venezuelan authorities. Upon approval, we intend to quickly move forward to FID on phase one, which will add 200,000 barrels gross in 24 months.
This could be before the end of this year. Further phases could then take full-field production to a gross level of 1 million barrels per day. Also, earlier this year we signed a sustainability agreement on Perla giving Eni control of export and revenues from which we will pay our royalty and taxes while resuming payment for our gas. In addition, the agreement allows for some debottlenecking of production for the domestic market while also defining a new expansion phase for future LNG export, roughly doubling production.
It’s important to emphasize our objective is to manage our free cash flow position over both Junín and Perla. Carefully managing the net capital phase development and timely farm-downs to manage the risk-reward are a fundamental feature of Eni’s upstream strategy. As you know, before going into more detail on our performance for the quarter, let’s also cover transition, providing further important balance to our company. We continue to capture value from our transition activities where Enilive has reported record results this quarter, coming ahead of a year when we expected to add significant new biorefining capacity and bring in by year end the benefits of our recent purchase of the marketing asset in Germany.
At the end of the quarter we have also completed the additional investment in Plenitude with Ares taking a larger share. This new structure will efficiently support the next phase of growth for Plenitude. In fact, emphasizing our value creation, we now have market valuation implying a value of these two largest companies in the transition business at a combined 25 billion euro. Our satellite strategy is a key tool to our success in building new transition businesses without sacrificing investment into.
Turning now to Q3 results, this fully reflects our objective to grow Eni while simultaneously reducing risk and adding the optionality that comes with a low-gear balance sheet and delivering an attractive return to our shareholders. E&P reported production growth of 4.2% combined with a supportive market environment and a focus on efficient operation. We generated pro forma EBIT of 4.6 billion euro. GGP pro forma EBIT of 0.4 billion came without one-time benefits seen in Q2 2026 and was driven by strong gas and LNG optimization results.
There were no one-off content adjustments in the quarter. In transition, Enilive and Plenitude together reported pro forma EBIT of 0.7 billion euro, corresponding to 0.6 of pro forma EBIT, with Enilive benefiting from supporting biorefining margins, while Plenitude results were impacted by the current competitive environment in the retail space. Transformation saw refining report a further recovery in utilization as the major turnaround activity was completed, meaning we provided important supply to customers and were able to capture the strong market conditions.
Versalis suffered from a reversal in the scenario from Q2 but the underlying performance remained on track towards its target of breakeven in 2028. Contribution from associates reflects a full quarter of CIARA, the business combination in the Far East, while our share of the ADNOC refinery turned to profitability. The group tax rate of 32% reflects a tax rate of 35% in E&P, helped by high grading of production, a higher proportion of results in lower tax regimes and the effect of the satellites, plus also the improved contribution from Enilive and refining.
We now expect a full-year charge of between 36 and 37%. Net income of 2.8 billion euro was up 20% quarter on quarter despite lower oil price and up 2.2 times year on year. CFFO before working-capital effect was 4.3 billion euro, broadly in line with Q2 despite lower crude oil prices and 30% up year on year. Capital expenditure of 1.35 billion euro is consistent with the 7 billion euro we have guided to and consistent with our comments to expect a lower figure in the second half.
With the consolidation of Plenitude and upstream activity in Indonesia, the impact of this strong cash flow from operation generation, our disciplined net investment and the consolidation of Plenitude debt equivalent to 2.75 billion euro improved our balance sheet, with a reported gearing now at 10%, the bottom end of the guided 10–15% range, while pro forma gearing is at 9%, both levels representing a record minimum. The continuing improvement in our balance sheet metrics is also confirmed by a recent upgrade by Standard & Poor’s on our credit rating and its initiation of an investment-grade rating on Plenitude.
For the full year 2026, we now see cash flow from operation at 16.5 billion euro, 43% above our initial guidance. This underpins our shareholder returns and covers the dividend, our first priority, by more than five times. Our historically strong balance sheet position and excellent cash flow from operation allow us to confirm the raise in our share buyback and the announcement of a special dividend. Today we are raising our 2026 share buyback to 3.8 billion euro from 3.4 billion euro, 2.5 times above the original guidance, and additionally we can confirm we are declaring an exceptional dividend of 1.3 billion euro with ex-dividend date on the 7th of December, bringing our total cash dividend this year to 4.4 billion euro, the highest level in our history. This represents a total payout of 8.2 billion euro, or 50% of cash flow from operation, equivalent to a yield on our share price of more than 11%.
With this I conclude my remarks on what I think you will agree was another excellent quarter, consistent with our view shared at Q2 that Eni is in one of the strongest positions in its history. Together now with my colleagues from Eni management team, I’m happy to take your questions.
OPERATOR
This is the conference operator. Please press star one for questions and star two to remove yourself from the question queue. I now leave the floor to Mr. John Rigby for the Q and A session.
John Rigby (Investor Relations)
Thanks very much. We’re going to move to the first question in the queue, and that’s Alejandro Vigilant at Santander. So Alex, if you’d like to ask your question. Thanks.
Alejandro Vigilant (Analyst)
Yes, thank you for taking my questions and congratulations for these results. Probably two questions that are related also potentially with the Capital Markets Day in ’27, but basically looking at the strong underlying growth in the upstream business. My question is what’s the level of CapEx you need to maintain this profile in the coming years, if the 7 billion is enough or you have to look at this number. And the second question is about Venezuela. I’m very interested in Junín 5 and the Perla project. Can you give us an indication on the total CapEx needed to reach those levels of production? Although you also highlighted the possibility of farm-downs. But just if you can give us some numbers. Thank you.
Francesco Gattei (Chief Financial Officer)
Okay, I will answer the CapEx. Clearly it’s a bit early now to discuss about Capital Market Day because we are starting to work in the coming weeks on the plan that we are going to present next year. But, sure, what you could expect is that the model that we have built and has proved has the potential to make you grow in different directions, different businesses and geographies, without compromising the amount of investment, actually maximizing the opportunity and therefore the speed of this transformation and growth while keeping a steady level of CapEx.
So we could continue to expect something that is in the range of what we have seen this year and also last year. About Venezuela, I leave now to Guido Brusco on Venezuela.
Guido Brusco (Chief Operating Officer – Global Natural Resources)
As you know, it’s a phased project first of all, and then we will leverage on facilities with spare capacity. Of course, over time we will have to build new facilities as the production volumes will increase. So I would say we are still in an assessing phase to understand the level of capital, but for sure at the very beginning it will be low intensity, utilizing spare capacity which is available in the country.
Alejandro Vigilant (Analyst)
Okay, that’s it.
John Rigby (Investor Relations)
Thanks Guido. Thanks Alex. We’re going to now move to Michele d’Alvino at Goldman Sachs.
Michele d’Alvino (Analyst at Goldman Sachs)
Michele, thank you very much and congratulations on the very strong results. I wanted to ask two questions. First, on tanker rates for crude. We’ve seen a crazy increase, over 20 times the normalized level. Could you give us an idea of how much of your crude transport needs are covered by long-term agreements versus spot rates? It’s never really mattered that much before, but it is very important, especially as we start to model the fourth quarter realizations.
And then secondly, you’ve achieved very low tax rates in the last two quarters. You’re guiding 36–37% for this year. Is that also what we should use for modeling next year? Or perhaps with a more normalized refining environment, let’s say maybe something closer to 40–45% would be more appropriate. Thank you.
Francesco Gattei (Chief Financial Officer)
Okay, I leave to Stefano Poyatti, Head of Trading, the answer about the tanker rates, and then we’ll come back to the tax rate.
Stefano Poyatti (Head of Trading)
So in terms of shipping strategy, I would say roughly 60% of the shipping that we do is under long-term agreements. So this is providing us a mitigation on the current very high prices that we are seeing on the market from one side, and from the other it is giving us a certainty of being able to deliver the volumes. The remaining 40% is more, let’s say, on the spot market, but more than half of those we are able, through the sales, through selling contracts actually, to pass through those costs to the buyer.
Francesco Gattei (Chief Financial Officer)
Okay, about the tax rate. Clearly the tax rate evolution is related to two factors. One is the level of pricing, clearly the contribution of the different segments or different upstream geographies on one case, but also from the point of view of the different businesses: R&M on one side or Gas and Power on another side. And Lenivo are supporting on LRP to reduce the tax rate. The other factor that is more structural and not related to the price is the fact that the business combination reduces the tax rate. So you receive just practically the net result from these companies and therefore you don’t have any rate applied to that result. For this reason you should expect clearly a range that is much lower than the historical level that we had in the past. In a normalized price environment—clearly if the price remains where it is now—this is also helping to keep it even lower.
Thank you.
Michele d’Alvino (Analyst at Goldman Sachs)
Thank you.
John Rigby (Investor Relations)
Thanks Michele. We’re going to move to Alessandro Pozzi at Mediobanca. Alessandro?
Alessandro Pozzi (Analyst at Mediobanca)
Thank you, John. A few questions. The first one is going back to Venezuela. You talked about a phased approach. You talked about an initial phase of 200,000 barrels a day increasing to potentially 1 million, which is quite significant. And I believe is that just for Junín 5? That’s what I understood. And I was wondering can you give us a bit of maybe the timing within which you aim to get there? And also I think Junín is in the Orinoco belt and historically it’s been heavy oil; you need a lot of diluents to extract the oil. I was wondering about any technical challenges that you may face there basically.
And on the second question, on Argentina I believe there is an FID targeted around year-end. Can you give us an update about the regulatory approvals that you need, the RIGI framework, and financing as well? And can you clarify what will be the accounting for Argentina upstream and LNG? Thank you.
Francesco Gattei (Chief Financial Officer)
I leave both answers to Guido.
Guido Brusco (Chief Operating Officer – Global Natural Resources)
Okay, starting from Venezuela, a bit of timing on the phase one which would reach the 200,000 barrels of oil per day: we expect between 18 and 24 months. Then we have another intermediate level which is 400, which we will achieve by end of 2029. And then the 1 million is the potential which we will achieve in mid 2030—in mid, let’s say, 2032, 2033. You have to consider that this is a supergiant with 35 billion barrels of oil in place. So the potential is there.
Clearly we have to build, as you have appreciated, the right logistics, the right supply chain. And this will take some time of course, but from a subsurface standpoint, we know the rocks, we know the reservoir. You spotted the right point—we need a lot of diluents, but we also have synergies with our assets in Venezuela. We have condensate from Perla and we expect to double the production of condensate in Perla with the future export of LNG. And so this could be used as a diluent for the AV oil of Junín 5.
Equally we have another asset, Corocoro, on which we have also a plan to increase production. It’s light oil, or lighter than the oil of Junín 5, and this also could be used as a diluent. The amount required is large, but we have also some synergies we can leverage in-country to overcome that. Going to Argentina, there are a few things required for the FID from a technical point of view, commercial point of view, and also supply chain—contractors have been identified, so that part of the work is done. RIGI: we have just submitted the application, and we expect to get it approved before, of course, the FID. The government and the stakeholders are very supportive, and RIGI has been designed for this kind of project. So RIGI is all about mega-projects like this one.
The financing: of course we made market sounding, we’ve tested the market. There is a very strong appetite. Our target is to achieve a 65 to 70% financing for this project. On the accounting, I would leave…
Francesco Gattei (Chief Financial Officer)
I will complement that on the accounting. Both the upstream and the midstream activities will be consolidated because they will be structured around special purpose vehicles that, as also Guido said, will attract the specific financing tools.
Alessandro Pozzi (Analyst at Mediobanca)
Okay, that includes the LNG, the midstream part, correct?
Francesco Gattei (Chief Financial Officer)
Yes. Thank you.
John Rigby (Investor Relations)
Thanks, Alessandro. We’re now going to move to Lydia Rainforth at Barclays. Lydia.
Lydia Rainforth (Analyst at Barclays)
Thanks John, and good afternoon everyone. And again thank you for the results and the presentation. A quick one—thanks. Just on Venezuela, and I just want to come back to, I think it was slide five where you talk about 600,000 barrels a day of new production in 2030 alone as being sanctioned in 2026. Does that include Venezuela or not? Just obviously that one hasn’t been sanctioned yet, so I just want to check on that one. And then just when you look at that idea of 2026 materially changing the portfolio and adding as much resources as you have, can you just give us a sense of the scale of that change in terms of—do you feel that this has been a year where actually for Eni it’s been a step change in the resource additions? Thanks.
Francesco Gattei (Chief Financial Officer)
I think Guido is the right person.
Guido Brusco (Chief Operating Officer – Global Natural Resources)
Venezuela is not included, to give you a straight answer. 2026 was clearly a very strategic and turning point for us. We’ve continued our phenomenal exploration success, but also with the strategic agreements in Venezuela and Argentina we’ve accessed very large resources in Vaca Muerta and of course in Junín 5. And the 4.6 billion of boe reflects that access. Of course the lion’s share is done by Argentina and Venezuela. But, as you could have appreciated also in the slide, we have created four major hubs, engines of growth.
It’s not only the Americas; it’s also Indonesia with the two FIDs and the third hub coming with Geng North. But it’s also Africa and the Mediterranean, with Kronos in the Mediterranean, with the discovery of Deniz in Egypt, with Baleine Phase 3, with Greater Plutônio in Angola, with the ramp-up of Congo LNG, Coral North in Mozambique. So it is Venezuela and Argentina, but not only that.
Lydia Rainforth (Analyst at Barclays)
Thank you.
John Rigby (Investor Relations)
Thanks Lydia. We’re going to move now to Josh Stone at UBS. Josh?
Josh Stone (Analyst at UBS)
Yeah, thanks John and thanks Francesco. Thanks everyone else. One question on the balance sheet. It is quite striking your gearing now being below 10% on a pro forma basis. So wondering how you’re thinking about that. Francesco, looking into 2027, if the current upturn continues, would you consider going net cash potentially? Or is the idea just keep giving excess cash back to shareholders? I’m just curious your thoughts there. And then second question on chemicals. Everything seems going better than expected, except for Versalis where it seems to be losing more money than it was at least under nine months versus last year if I include the transformation costs. So I understand the macro has been very difficult for petrochemicals, but is there anything else you think that can be done to help stop the losses here? Thanks.
Francesco Gattei (Chief Financial Officer)
Thank you, Joshua, for the question about gearing. Clearly, we have a model that allows us to grow and distribute, as we said, at a record level, but also to manage different cycles in oil prices and commodity prices. So the real advantage of what we built is a sort of ship that is able to navigate differences. And clearly, in a period like the one that we have seen in this 2026, there is an amount of cash that was originally not included, but that we considered in any case.
And I would say we were quite able to anticipate a potential scenario to share this upside and, on the other side, to use this upside for our balance sheet in 2027. Clearly, we have to see how the crisis is evolving in the coming months. It will take time to recover a normalized price environment. But what is more important for us is the opportunity to use, at best, the financial potential that we have inside the company. It is not only gearing of Eni as a reference, but also the different financial potentials that are inside the different combinations, the different entities that we build. So do we expect to reach net debt?
Positive cash is not in our assumption, but it is something that could happen in the case of scenario. The distribution policy, I think, is something that we are going to discuss with the Board, with the plan under our eyes, and with the Board next year. But clearly it’s something that will follow the same logic: if there is an upside related to our capability to capture and to execute better than expected, we like to share the upside. And now I leave it to Adriano for the Versalis answer.
Adriano (Chief Executive Officer, Versalis)
Thanks, Josh, for the question. I think we need to make a distinction between what is the trajectory and what was the second quarter of 2026 that was a special quarter—let me say special from the impact of Hormuz. When we look, as you ask, compared to the same quarter of 2025, the EBIT pro forma is slightly better. I would say in line, slightly better than the third quarter of 2025, as a result of a scenario that remains extremely weak from a demand point of view, but that is significantly worse from a utilities point of view.
You know that the chemical sector is very energy-intensive, and also from the negative impact of import duties that, starting from the 1st of July of 2026, have been eliminated completely versus the US, and of course this is putting Europe even in a weaker position from a competitiveness point of view. So what we have done and what we are doing is moving on with our transformation plan that, on a quarterly basis, represents almost €90 million. But unfortunately this is completely offset by utilities and by the negative scenario. What else can we do? I mean, you need to consider, as we always discussed, that Europe does not have the strong demand of Asia. Europe does not have the competitiveness in terms of feedstock and energy that the Middle East and the US have.
So Europe has to play with competencies and innovation to transform. And this is what we are doing, and this is what we are going to share more also in the next capital market update on how we are going to accelerate our transformation.
Josh Stone (Analyst at UBS)
Thank you.
John Rigby (Investor Relations)
Thanks, Adriano. Thanks, Josh. Next up is Paul Redman at BNP Paribas.
Paul Redman (Analyst at BNP Paribas)
Paul, hello everyone, and thank you very much for your time. My first question was just on refining margins. If I look at your macro assumptions for 2026, I think you’re implying about $25 per barrel CIRM margin for 4Q. So I wanted to ask what you’ve seen so far in October on CIRM margins and whether that includes shipping costs, as was discussed at the beginning of the call. And then secondly, as part of your Eni for Italy commitments, you put in fuel caps.
I wanted to ask what the quarterly impact on earnings and cash flow could be from those. Thank you.
Francesco Gattei (Chief Financial Officer)
Okay. I leave to—yeah, but if you want to answer, Pino Ricci, and then I will answer about the cap.
Giuseppe Ricci (Industrial Transformation Chief Operating Officer)
Yes, thank you. Thank you for the question about refining margin. Of course, the adjusted standard margin that we use includes the freight cost that increased a lot during the last period because of the Hormuz situation, as it includes also the different yields that occur with changes in crude and changes in the complexity slate of crudes.
Paul Redman (Analyst at BNP Paribas)
I’m sorry, just apologies for interrupting. I was just going to ask, what is the CIRM today?
Giuseppe Ricci (Industrial Transformation Chief Operating Officer)
The CIRM today—I’ll tell you which is the figure—is 22, and the quarter-to-date is 18.
Paul Redman (Analyst at BNP Paribas)
Thank you.
Francesco Gattei (Chief Financial Officer)
Okay. About the cap that you mentioned, clearly it’s worthwhile to mention that for us doing business means managing a strategy to pursue sustainable and long-term value. We believe that companies have a social responsibility. We cannot be a company that is, let’s say, living in a sort of bubble outside the real world. So we have to be realistic in thinking that supporting customers is a priority for a company that is working on a basic need such as energy.
For this reason, we have decided to introduce a cap to our sales of gasoline and diesel. This is a cap that will be, let’s say, assessed periodically and, in terms of impact, we estimate that under the current market conditions, assuming the level that we have seen so far, the impact in a quarter will be in the range of a few hundred million. So this is the logic of what we have done and the magnitude of the impact.
Paul Redman (Analyst at BNP Paribas)
Thank you for that.
John Rigby (Investor Relations)
Thank you, Paul. We’re going to move on now to Henry Tarr at Berenberg. Henry,
Henry Tarr (Analyst at Berenberg)
Hi there, and thanks for taking my question. Could we focus on Enilive? Another very strong quarter in Q3. What’s the outlook for that business into Q4 and then into 2027? It seems as though policy in Europe remains very supportive. Do you see that continuing to be the case even if we continue with very high prices to consumers, or do you think security of supply sort of trumps the cost issue? Thank you.
Francesco Gattei (Chief Financial Officer)
Yes, I leave to Stefano Ballista, the CEO of Enilive.
Stefano Ballista (Chief Executive Officer, Enilive)
Yeah, the market scenario is very constructive. The key point is mainly driven by fundamentals. Fundamentals means that in Europe the Renewable Energy Directive has been deployed already in 17 countries, and we got drafts from another seven countries that are going to do it just after. So this demand is going to stay there. In the US, the rationale is the same. On top of EPA new target we discussed in previous quarters, we got extra clarity on clean fuel production credit during this quarter that is going to increase clearly and reduce market uncertainty.
On top, we got reallocation of small refinery exemption to all the rest of demand, so keeping the scenario very supportive. Moving forward, we see the situation remaining, and the current geopolitics context actually is going to give the biofuel an extra contribution on top of the environmental sustainability in terms of security of supply, because value chains on biofuel are decoupled from the oil one, so they can be used with the same distribution network and with the same engine. So this is an extra value that we see on biofuel, enforcing current strong fundamentals.
Henry Tarr (Analyst at Berenberg)
Thank you. And if I could just have a quick follow-up. Are you exporting volumes to the US today?
Stefano Ballista (Chief Executive Officer, Enilive)
Today we are not exporting volume to US because the optimal outlet is Europe, given the ARBs. We got volume from US to Europe up to, let’s say, a couple of months ago due to open ARBs. Now, given the change of the economics in US that is at a very high level, the optimal solution is to keep that volume in US.
Henry Tarr (Analyst at Berenberg)
Thank you very much.
Stefano Ballista (Chief Executive Officer, Enilive)
You’re welcome.
John Rigby (Investor Relations)
Thanks, and thank you, Henry. We’re going to move now to Massimo Bonasoli at Equita. Massimo,
Massimo Bonasoli (Analyst at Equita)
Hello John. Thank you and good afternoon. One question on Plenitude. You lowered the EBITDA guidance to 1.2 billion from 1.3 billion, citing increasing competitive pressure in retail and weaker conditions in renewables. Could you elaborate on which factors are driving the downgrade and whether you expect these headwinds to persist into 2027? Thank you.
Francesco Gattei (Chief Financial Officer)
About—yes, Plenitude. The market environment, in particular retail, was particularly challenging because there are a number of players that are entering the market with aggressive policies. So they are trying to build their customer base, and therefore they are defining aggressive marketing activities. We are actually working and reacting, as you have seen also recently with the policy, with the new announcements that we have done, and we see improvement or return of, let’s say, quite a number of new entries in our customer base.
That was also enlarged by ACE Energy acquisition that we completed this year. There is another factor that is impacting our performance this year that was a one-off. It was related to the fact that during the summer there was a spike in terms of demand of power—demand that has practically pushed well above any expectation the request of our customers—and therefore we had to buy on a spot basis that energy. So this is something that will return, will return positively, clearly related to the weather or to the climate conditions.
Clearly, we have to continue to adapt our retail marketing activity to take into account this new environment that is characterizing mainly the Italian market. We do expect clearly an improvement. We also do consider that, with the new injection of capital, Plenitude has probably one of the strongest positions in terms of financial power of the players of the sector. We need to use this money in the best way.
John Rigby (Investor Relations)
Thanks, Massimo. We’re going to move now to Chris Couplandt at Bank of America. Chris?
Chris Couplandt (Analyst at Bank of America)
Yeah, thank you very much. In the same vein, if I may ask you, Francesco, maybe you can give us an overall estimate for the impact about all these price caps that you’ve press-released in the last few weeks, whether it’s on fuels, whether it’s on power, et cetera, in whatever shape or form. You can give us a little bit of an idea what the financial impact is on that. And then I was just going to follow up and ask you whether you can give us more insight into the timing of dividends from your affiliates so we can get a better handle for what is in your Q4 budget, what you’re expecting there.
Because it seems like Q3 was a rather handsome receipt in terms of dividend payments to the mothership. Thank you.
Francesco Gattei (Chief Financial Officer)
About the price cap, we have already said that, assuming the current level of cap and assuming the current forward curve, we are speaking about a few hundred million in a quarter. So that is related to the fuel, while for the marketing positioning of Plenitude it is just some millions for this year and a bit more for the next year. But it’s not changing the overall number that I mentioned before. In the fourth quarter, the key contributor for the distribution policy will be Ciara.
That is material, and there is also some contribution coming from Vår Energi and, I think, also from Azule.
Chris Couplandt (Analyst at Bank of America)
Great, thank you.
John Rigby (Investor Relations)
Thank you, Chris. Getting to the end of the list, we have Al Sim at Citigroup. Al, are you still with us?
Al Sim (Analyst at Citigroup)
I am, John. Maybe this is a question to Stefano. Looking at the Enilive sales data, I’m somewhat surprised to see quite strong growth, particularly in Italy. I think you’re talking about retail sales up 11% year on year. Maybe just some perspective on that. Are we looking at same-store sales data? I mean, you know, we’re kind of in the midst of an energy crisis—unusual to see double-digit growth numbers. Thank you.
Stefano Ballista (Chief Executive Officer, Enilive)
Thank you for the question. Well, the growth is driven by retail demand. This is clearly related to our pricing strategy as well. So this is part of the focus on customers, part of the social responsibility that Francesco just highlighted on top. Actually, we got very focused before the price-cap pricing approach in order to optimize value, including also non-oil contribution as a whole. On the other side of these approaches, in order to optimize portfolio, we reduced our wholesale exposure, exactly to maximize the value — so reducing exposure on the lowest-margin segment on the wholesale — given the current portfolio and given the ongoing market dynamics in terms of price plus premium.
Al Sim (Analyst at Citigroup)
Just to be clear, Stefano, what we’re seeing is some sort of market share gain then on the retail side, is that the way to interpret it?
Stefano Ballista (Chief Executive Officer, Enilive)
Yes, definitely. Sorry. Absolutely. There is a significant market share gain. Yes, it’s exactly the implication: this number is related to us, not to the global market. The global market is pretty much in line. In Italy, there has not been any significant swing compared to the expectation. This is extra volume we are capturing thanks to the overall strategy we have in place.
Al Sim (Analyst at Citigroup)
Perfect. Thank you very much.
Stefano Ballista (Chief Executive Officer, Enilive)
You’re welcome.
John Rigby (Investor Relations)
Thanks, Al. We’re going to move to the last question. That’s Sassy, Jefferies. Sassy, are you there?
Sassy (Analyst at Jefferies)
Yes, thanks for taking my question. Yeah, I had one left. On Venezuela, regarding Perla, I was just wondering if it was possible to provide a timeline for the development of the export facility there as well. Recent press reports have indicated that an initial partner could be brought into the project. I was wondering if you can comment on those discussions, if you’re marketing it currently, and clarify whether a farm-down is necessary to take an FID on the export project there.
John Rigby (Investor Relations)
Guido, thank you.
Guido Brusco (Chief Operating Officer – Global Natural Resources)
Yeah. On Perla, we have submitted the plan of development which foresees two steps. One is a debottlenecking of the current onshore plant to provide additional 90 million standard cubic feet per day to the domestic market. And then the second phase is the export through a floating LNG of about 3.4–3.5 million tons per annum. We have stated already that once we will take the FID, it will take three and a half years, give and take, to bring this volume on production.
And the FID, of course, is subject to the approval of the plan of development from the first party, from the government. The good news is that the technical work has been done and also the supply chain has been somehow identified.
Sassy (Analyst at Jefferies)
Thank you.
John Rigby (Investor Relations)
Thanks, Guido. With that, we’re going to close the call. So thank you very much for your interest. Any other questions, don’t hesitate to reach out to the investor relations team, and have a great weekend. So thank you very much.
OPERATOR
Thank you.
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