After a 2020 in deep red, closed with a net loss of 8,6 billion, Eni's accounts are once again improving in the first quarter of 2021. The six-legged dog group in fact closed the first quarter of the year with an adjusted net profit to 270 million, which to give a measure is equal to almost five times that achieved in the first quarter of 2020. The adjusted Ebit is 1,3 billion, also very sharply growing compared to the fourth quarter of 2020 (+171%), at constant production (1,7 million boe/day). The net profit for the first three months amounted to 856 million, in strong contrast with the loss of 2,9 billion in the first quarter of 2020 and the red of 797 million in the fourth quarter of 2020. Supporting the recovery of the accounts, in addition to the rise in oil prices (Brent +21% vs. first quarter 2020; +38% vs. fourth quarter 2020) which, however, Eni only partially implemented due to the unfavorable euro-dollar exchange rate, were above all the Exploration & Production and Chemical sectors.
“In a first quarter still strongly characterized by the effects of the lockdowns – he commented the managing director Claudio Descalzi – Eni highlighted a robust recovery in results. The growth of our Gas&Power retail business continues (+19% EBIT compared to 2020), thanks to the expansion of power customers and non-commodity services. The performance of Refining was instead penalized by reduced demand for fuels in Europe, resulting from the pandemic, and a negative refining margin. In a challenging environment, Group-wide Adjusted EBIT of €1,3 billion is in line with last year's Q2020 and nearly tripled from year-end 2.” Cash flow was also good, which in the first quarter recorded an organic cash generation before the change in working capital of around 1,4 billion, clearly higher than the investments for the period of 2021 billion. Free cash flow in 3 is expected to be around 60 billion, benefiting from crude above XNUMX dollars.
The outlook for the whole of 2021 is also positive, despite the fact that the oil market is still shrouded in uncertainty. Eni confirms the forecast of hydrocarbon production for the year equal to approximately 1,7 million boe/day (assuming OPEC+ cuts of around 35 kboe/d on average per year) and a forecast of organic spending for investments of around 6 billion. Cash neutrality to cover organic spending and the floor dividend will be achieved with a Brent level of 51 dollars a barrel (currently trading at 68). Speaking of dividends, a variable component of increasing value starting from a reference Brent of 0,36 dollars will be added to the base dividend of 43 euro per share. The buy-back will be activated starting from a reference Brent price of 56 dollars a barrel.
The BoD also approved the launch of a strategic project for the listing or sale of a minority stake in the new Eni gas and electricity and renewables business unit. The group - explains a note - intends to "define and evaluate the industrial and financial plan of the new corporate vehicle that will arise from the union of the retail and renewable energy activities". The study also envisages "the evaluation of multiple options for the best valuation of this company during 2022, subject to market conditions". Eni's accounts at the moment do not convince investors: the share at the opening session on the Ftse Mib loses more than 1% around 10 euros per share, and is among the worst on the list.
