Eni : swings to loss on lower oil and gas prices
(CercleFinance.com) - Eni said that it swung to a loss in the second quarter as crumbling oil and natural gas prices prices dragged down its earnings amid the Covid-19 pandemic.
The Italian energy group reported an adjusted operating loss of 810 million euros for the second quarter, from a profit of 2.1 billion euros in the second quarter of 2019.
Hydrocarbon production fell by 6.6% to 1.71 million barrels a day in the second quarter, Eni said, due to OPEC+ production cuts as well as lower gas demand, mainly in Egypt.
In a surprise twist, the company said its dividend will no longer be a "fixed amount" - citing an environment that is "increasingly subject to high variability".
Eni said the new remuneration policy is innovative because it combines a floor and progressive component based on a Brent price of at least 45 dollars per barrel, with a variable component based on the oil price increasing up to 60 dollars per barrel.
It is only beyond that level that its share repurchase program would be relaunched, the group said.
Investors didn't seem to be too convinced however, with the Eni stock edging up just 0.1% on Friday morning on the Milan Stock Exchange.
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