Eni archive 2020 with a red of 8,563 billion (against the net profit of €148 million in 2019), of which approximately €3,3 billion in operating loss. The group communicates it in a note, specifying that the adjusted net loss amounted to 742 million, due to "the decline in operating performance, the lower results of the JVs and other industrial holdings due to the deterioration of the macroeconomic situation and the trend in the tax rate". L'adjusted operating profit it stood at $1,898 billion, down 78% year-on-year.
"In the most difficult year in the history of the energy industry, Eni has shown great strength and flexibility, making progress in the irreversible energy transition process - he comments Claudio Descalzi, managing director of the group – In a few months we have reviewed our spending program and minimized the impact on the cash flow of the fall in the price of crude oil, increased our liquidity and defended our capital solidity”.
Therefore, Eni has not escaped the deep crisis that hit the sector with Brent prices down by 35% compared to 2019. It is certainly one of the effects of the global lockdown due to the Covid-19 pandemic but also the symptom of a structural crisis which has affected all the major oil groups, from Shell to Total, to the smallest Repsol.
Just in fourth quarter, Eni recorded a net loss of 725 million, an adjusted net profit of 66 million and an adjusted operating profit of 488 million. “The fourth quarter results, with a price of Brent at 44 dollars a barrel substantially stable compared to the previous quarter, exceed market expectations in terms of operating profit and net income”, continues Descalzi.
The manager also points out that “cash generation adjusted 2020 of €6,7 billion was able to self-finance capex with a surplus of €1,7 billion”, while “net borrowing (before IFRS 16) remains at the end of 2019 level e the leverage it stands at around 30%”.
Throughout 2020, the production of hydrocarbons it reached 1,733 million barrels per day, down 7% compared to 1,871 million in 2019, but in line with the group's expectations. Eni's board of directors will propose to the shareholders' meeting the distribution of a dividend of 36 cents per share (less than half compared to the 86 euros of 2019), of which 12 already distributed in September on account.
“While the upstream sector strongly consolidates the recovery trend – concludes Descalzi – during the year the businesses destined for the generation and sale of decarbonised products achieved excellent results, with the Ebit of Eni gas and electricity increasing by 17% and of biorefineries by 130%, as well as 1GW of solar and wind generation capacity already installed or under development. We have laid the foundations for a strong acceleration of renewables, with entry into two strategic markets such as the USA and offshore wind power in the North Sea, with participation in the Dogger Bank project in the UK which will be the largest of its kind in the world”.
STRATEGIC PLAN
"We are committed to achieving the total decarbonisation of all our products and processes by 2050", reiterated the CEO Claudio Descalzi presenting the Strategy 2021-2024, which for Eni is enriched with further details and new intermediate objectives to accelerate the green transition. As regards CO2 emissions, the new objectives of reducing absolute emissions by 25% by 2030 (compared to 2018), and by 65% by 2040 must be added. On the reduction of coal, the new intermediate objectives are -15% by 2030, previously forecast for 2035. By 2040 Eni has confirmed its intention to reach the -40% target. To achieve these goals, the six-legged dog will increasingly focus on renewables, with an increase in installed capacity from renewables expected to reach 15 GW by 2030.
Ambitious goals also on the financial front: Ebitda will be doubled to almost 1 billion in 2024, and Descalzi insisted on better financial solidity "to minimize the impact of price volatility". Expected reduction of cash neutrality of the group to cover the capex and the dividend floor (0,36 euro per share) below 40 dollars a barrel over the next four years. There will also be an improved remuneration policy for shareholders: dividend floor at 0,36 euros per share with Brent already at 43 dollars a barrel, compared to the previous level of 45 dollars; buyback of 300 million a year with Brent at 56 dollars a barrel. The buyback was confirmed at 400 million/year from 61 dollars a barrel and 800 million/year from 66 dollars.
