Italian major Eni remains committed to taking public its Plenitude renewables and electricity business, but the market is still too volatile to support the listing.
An initial public offering plan for Plenitude was unveiled on 9 June, but was pulled just a few weeks later due to “volatile" and "uncertain” market conditions.
“We continue to see additional strategic value in a listing of the company and we confirm it remains our intention to pursue an IPO, [depending on] market conditions,” Eni chief executive Claudio Descalzi told analysts during its second quarter results conference call on Friday.
Descalzi said that the market remains volatile and “may be even worse than it was before (last month), but we are convinced and determined to go ahead (with the IPO) when the conditions are re-established”.
“I am sure we going to find a good opportunity for the IPO, said Descalzi, while stressing that, for Eni, the strategic priority is Plenitude “and not the IPO".
He explained that while a listing is “clearly a good tool to give value and independence to the company", Eni's strategic interest in the company is that it allows it "to sell decarbonised products and biogas… to reach net zero in our Scope 3 emissions".
One analyst wondered if market conditions remain unsuitable for an IPO over the next 12 months, would Eni consider selling Plenitude to an industrial customer.
Descalzi did not answer the question directly, saying only that “we are focused on developing our company… and we’ll see what we’re going to do in the future".
The IPO last month had been targeted for the Euronext bourse in Milan, with Eni retaining a majority stake in Plenitude following the listing.
Descalzi said Plenitude has grown its installed renewables capacity by 35% in the first half of 2022 to about 1.5 gigawatts, and he is confident that it will exceed its financial end-of-year target of 2 GW.
This growth was mainly due to the acquisition of the Corazon photovoltaic plant in the US, the installation of the first phase of the Brazoria photovoltaic project in the US, as well as the acquisition of the Fortore Energia wind farm in Italy.
He noted the business delivered €190 million (US$193.5 million) in earnings before interest, depreciation, tax and amortisation in the second quarter of 2022, up from €130 million a year earlier, with overall 2022 Ebitda estimated to hit more than €600 million.
Plenitude’s adjusted Ebit was €112 million, up 58% from a year earlier, driven by a ramp-up in produced volumes of renewable electricity, higher wholesale prices and effective customer base management, said Eni.
Part of this improved performance, noted Descalzi, was helped by strong sales in distributed solar generation in the retail business.
Recently, Plenitude and HitecVision struck a deal which will see their Vaargronn joint venture in Norway become a full cycle offshore wind player.
Plenitude will contribute to the venture a 20% interest in the Dogger Bank offshore wind project in the UK, with HitecVision increasing its ownership share in the combined business from 30.4% to 35% through a cash injection.
In May, Plenitude signed an agreement with Italy’s Ansaldo Energia to evaluate technologies for storing electricity, as an alternative to electrochemical batteries.
The aim is for these technologies to be developed in synergy with Eni’s industrial hubs in Italy, leveraging existing power generation and consumption systems.
In April, Plenitude unveiled an investment in EnerOcean, a Spanish developer of the W2Power floating wind technology.
Plenitude will contribute capital and expertise to the technology development programme and will retain an initial 25% equity share in EnerOcean.
In the same month, GreenIT, a joint venture between Plenitude and Italy’s CDP Equity, signed an agreement with the Copenhagen Infrastructure Partners equity find to build and operate two floating offshore wind farms in Sicily and Sardinia, with an expected total capacity of approximately 750 megawatts.