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Eni: Energy Prices A Drag On Results, But The Growth Story Is Playing Out

Mar. 06, 2020 12:42 AM ETEni S.p.A. (E), EIPAF5 Comments


  • Eni's headline numbers were disappointing, but its actual performance in the quarter was not really that bad.
  • The company was able to continue to deliver production growth as it brought various new projects on-line or ramped up existing ones.
  • It should be able to continue this growth heading forward.
  • The company is working to ramp up its presence in LNG and is becoming a major producer of natural gas.
  • We saw relatively strong reserve development here, which is always quite nice to see.
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On Friday, February 28, 2020, Italian energy giant Eni S.p.A. (NYSE:E) announced its fourth-quarter 2020 earnings results. At first glance, these results were quite disappointing, as the company failed to meet the expectations of its analysts in terms of either top line revenues or bottom line earnings. As was the case with many of the other European energy companies that have reported their results recently though, there were quite a few things to like here, and we certainly see the growth story that I have presented in various past articles playing out. The financial performance of the company was, unfortunately, not as good as last year, but this was somewhat expected.

As my long-time readers are no doubt well aware, it is my usual practice to share the highlights from a company's earnings report before delving into an analysis of its results. This is because these highlights provide a background for the remainder of the article, as well as serve as a framework for the resultant analysis. Therefore, here are the highlights from Eni's fourth-quarter 2019 earnings results:

  • Eni reported net sales of €16.215 billion in the fourth quarter of 2019. This represents a 19.15% decline over the €20.056 billion that it had in the prior-year quarter.
  • The company reported an operating loss of €178 million in the most recent quarter. This compares very unfavorably to the €1.456 billion operating profit that it had in the year-ago quarter.
  • Eni produced an average of 1.921 million barrels of oil equivalents per day in the current quarter. This represents a 2.62% increase over the 1.872 million barrels of oil equivalents that it averaged during the equivalent quarter of last year.
  • The company made significant progress in expanding the production from the massive Zohr field in Egypt that started operations in 2017.
  • Eni

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