Italian energy group Eni’s fortunes improved in the final quarter of the year on firmer oil prices after “a year like no other” sent full-year profit tumbling.
Adjusted net profit in the fourth quarter was 0.66 billion euros ($798 million), down 88% on the year but beating analyst expectations for a loss of 0.04 billion euros.
But for the full year, it reported a loss of 742 million euros compared to a 2.876 billion euro profit in 2019 after what Eni Chief Executive Claudio Descalzi said had been “a year like no other in the history of the energy industry”.
The unprecedented fall in demand triggered by the COVID-19 pandemic led bigger European rivals Shell and BP and U.S. majors Exxon Mobil and Chevron to report heavy losses for the year.
Eni shares fell sharply last year, hitting their lowest in a quarter of a century as the health pandemic shook oil markets.
In the fourth quarter production fell 11% to 1.713 million barrels of oil equivalent per day but the company said full-year production was in line with target.
Like its rivals, Eni has slashed its investments to offset fallout from the pandemic and spent 35% less last year at 5 billion euros.
Adjusted cash flow for the year fell to 6.7 billion euros compared to guidance for 11.5 billion euros at a Brent oil price of $60 per barrel.
“Through leveraging the actions we put in place, our 2020 adjusted cash flow … was able to finance our capex, with a surplus of 1.7 billion,” Descalzi said.
The company, which said it was well equipped to deal with an uncertain trading environment this year with liquidity of around 20.4 billion euros, confirmed its 2020 dividend of 0.36 euros a share.
In a note Royal Bank of Canada said Eni remained one of the more leveraged names among the integrated oil companies.
“We see Eni’s aggressive strategy around the energy transition posing risks to shareholders over time,” it said.
Eni, like other European peers, is cleaning up its business as investors crank up pressure on the oil and gas sector to fight climate change.
It is due to release its new business plan later on Friday.
At 1019 GMT Eni shares were down 1.1%, while the European oil and gas index was down 0.5%..
Main Photo: The Eni headquarters in Rome. EPA-EFE/GIUSEPPE GIGLIA