(Bloomberg) -- Eni SpA posted a surprise fourth-quarter profit as crude prices began to recover and the contribution of low-carbon businesses helped offset the impact of the coronavirus pandemic.
The Italian giant, like oil companies around the world, has suffered the effects of the demand destruction wrought by the Covid-19 crisis. Yet it managed to take advantage of a rally in prices as pockets of consumption growth emerged, helping it beat expectations last quarter. Most of its biggest peers missed estimates.
Eni’s adjusted net income was 66 million euros ($79.8 million), the Rome-based company said Friday. Analysts had estimated an adjusted net loss of 48.1 million euros. Its exploration and production unit reported adjusted operating profit of 802 million euros, up about 60% from the previous three months.
Upstream results were “coming in better than expected,” analysts at RBC Capital Markets said in a note. Eni’s Gas e Luce, Power and Renewables division also beat estimates, they said.
In that segment, energy production from renewable sources amounted to 88 gigawatt-hours in the quarter, a fivefold increase from a year earlier. Retail power sales rose 11%.
“Eni has proven the robustness and flexibility of its business model,” Chief Executive Officer Claudio Descalzi said in a statement. “The upstream business is strengthening its recovery, while our businesses in the production and sale of decarbonized products achieved excellent results in the year.”
Energy Shift
With the energy transition gathering pace, many oil and gas producers are gradually shifting away from fossil-fuel growth and expanding into clean fuels, renewable power and electric mobility. Eni itself set ambitious climate goals last year, pledging to slash net emissions by mid-century.
Oil and gas production fell 11% from a year earlier to 1.71 million barrels of oil equivalent a day, the company said, citing the impact of the pandemic and OPEC+ output cuts.
While crude prices have rebounded from the historic lows of last year, the virus is still sweeping across Europe amid uneven vaccination campaigns, and lockdowns persist in many regions. For the full year, Eni reported an adjusted net loss of 742 million euros.
The shares fell 1.7% at 9:26 a.m. in Milan, trading at 8.94 euros.
The company posted 2020 adjusted cash flow of 6.7 billion euros, which it said was sufficient to finance capital spending with a surplus of 1.7 billion euros. The company also confirmed a 2020 dividend of 36 euro cents a share. It will present its outlook and strategy later on Friday.
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