Italy's Eni Back in Black in Q4

Italian energy major Eni reported an adjusted net profit of €66mn ($80mn) for the fourth quarter on February 19, compared with a €150mn loss in the previous three months, aided by higher oil and gas prices. Income was down 88% year on year, though, reflecting the drastic changes in market conditions since the Covid-19 pandemic began.

Production in Q4 averaged 1.71mn barrels of oil equivalent/day, marking a 11% decline yr/yr but stable q/q, whereas full-year output was 7% lower at 1.733mn boe/d. Eni's adjusted operating profit slumped 73% yr/yr and 9% q/q to €488mn in Q4, dragged down by a 61% yr/yr decline in upstream earnings to €802mn. But upstream income improved 56% q/q.

Eni incurred a €101mn loss at its global gas and LNG business, versus a €46mn loss a year earlier and a €64mn gain three months earlier, while its power and renewables segment earned €132mn, compared with €156mn in Q4 2019 and €57mn in Q3 2020.

"In a year like no other in the history of the energy industry, Eni has proven the robustness and flexibility of its business model by reacting swiftly and effectively to the extraordinary crisis context, while progressing the company’s irreversible path for the energy transition," CEO Claudio Descalzi said. "In the space of a few months after the outbreak of the pandemic we reduced capital spending and limited the impact of the sharp drop in crude oil prices on the cash flow, strengthening our liquidity and preserving the robustness of our balance sheet."

He noted that operating and net profit had exceeded expectations, on the back of strong operational cash generation and Eni's effective response to the pandemic. Eni's €6.7bn in adjusted cash flow more than covered capital expenditure, leaving a €1.7bn surplus, while the group's net borrowings are at the same level as they were at the end of 2019, with leverage at about 30%, he said.