Eni beats Q4 profit forecasts helped by favourable arbitration

By Francesca Landini

MILAN (Reuters) -Italian energy group Eni on Friday reported fourth-quarter adjusted net profit of 1.64 billion euros ($1.8 billion), beating analysts’ expectations, helped in part by a positive arbitration outcome.

Eni’s full-year net profit totalled 8.3 billion euros, down 38% from a year when energy prices soared.

Eni’s fourth-quarter adjusted operating profit (EBIT) came in at 2.8 billion euros versus the 2.9 billion expected by analysts in a poll provided by the company.

Its gas and liquefied (GGP) division posted a record-breaking adjusted EBIT of 0.68 billion euros helped by a favourable arbitration outcome, the state-controlled group said, without providing further detail.

Sources told Reuters last year that Germany’s largest gas trader Uniper had been ordered to pay 550 million euros to Eni by an arbitration court over a liquefied natural gas (LNG) supply contract that expired in 2022.

Throughout 2023 the GGP division exceeded the group’s guidance but this was partly offset by weak results at the chemicals division, with Eni citing slowing demand across all business segments as well as higher energy and input costs.

Eni will present its updated strategy on March 14.

“With little in terms of forward-looking guidance, we see this as a neutral set of results, however some investors may see the arbitration proceeds as ‘one-off’ in nature and consider the underlying results disappointing,” RBC Europe analyst Biraj Borkhataria said in a report.

Shares in Eni were down 1% at 0820 GMT, underperforming a 0.6% rise in Milan’s blue-chip index.

Rivals Exxon Mobil (NYSE:), Chevron (NYSE:) and Shell (LON:) earlier this month also beat profit expectations on a mix of strong trading results and higher oil and gas production.

Shell, Chevron and TotalEnergies (EPA:) increased their dividends while BP (NYSE:) increased the rate of its buybacks.

($1 = 0.9292 euros)