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MILAN, Feb 19 (Reuters) – Italian energy group Eni’s fortunes picked up in the last quarter of this year as firmer oil prices after “a year like no other” saw full-year profits fall.
Adjusted net income for the fourth quarter was 0.66 billion euros ($ 798 million), down 88% on the year but beating analyst expectations for a 0.04 billion euro loss.
But for the full year, it reported a loss of 742 million euros compared to a gain of 2.876 billion euros in 2019 after what Eni Chief Executive Claudio Descalzi said was “a year unlike any other in the history of the energy industry”.
The unprecedented drop in demand triggered by the COVID-19 pandemic saw big European rivals Shell and BP as well as big US companies Exxon Mobil and Chevron report heavy losses for the year.
Eni’s shares fell sharply last year, hitting their lowest level in a quarter century as the health pandemic rocked 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 on target.
Like its competitors, Eni has cut its investments to offset the impact of 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 with guidelines for 11.5 billion euros on Brent oil prices of $ 60 per barrel.
“By taking advantage of the actions we took, our adjusted cash flow for 2020 … was able to finance our capex, with a surplus of 1.7 billion,” said Descalzi.
The companies, which said they were well-equipped to deal with this year’s uncertain trading environment with liquidity of around 20.4 billion euros, confirmed a 2020 dividend of 0.36 euros per share.
In a note, Royal Bank of Canada said Eni remains one of the more leveraged names among integrated oil companies.
“We see Eni’s aggressive strategy around the energy transition as posing a risk to shareholders from time to time,” he said.
Eni, like other European peers, is cleaning up his business as investors increase pressure on the oil and gas sector to fight climate change.
It will release its new business plan on Friday.
By 1019 GMT Eni’s shares were down 1.1%, while the European oil and gas index was down 0.5%.
($ 1 = 0.8271 euro)
Additional reporting by Stefano Bernabei; Edited by Edmund Blair and David Evans
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