March 4 (Bloomberg) -- ERG SpA, Italy’s second-largest refiner, narrowed its fourth-quarter loss as the power business offset weak refining margins.
The net loss of 7 million euros ($9.8 million) compared with a loss of 27 million euros a year earlier, the Genoa, Italy-based company said today in a statement. Revenue fell 13 percent to 1.5 billion euros.
In 2010, the marketing and refining division “continued to suffer from the weakness of refining,” Chief Executive Officer Alessandro Garrone said in the statement. “For 2011 we expect overall growth of earnings.”
ERG expects improved profitability from refining this year after a period of weak demand caused by the global economic slump. To boost earnings the company is investing in units and equipment at its refineries and in the improvement of its downstream sales network.
Net debt increased to 723 million euros in 2010 from 662 million euros due to the acquisition of wind unit ERG Eolica Adriatica, the company said. The company proposed a dividend of 40 euro cents per share.
Last year ERG set up a partnership with Total SA in refining and marketing and exercised a put option to sell a further stake in its Isab Priolo refinery in Sicily to Russia’s OAO Lukoil.
The transaction with Lukoil was valued at 205 million euros and brings the Russian company’s total stake to 60 percent. ERG said the operation will be closed in the first quarter.
Shares rose 0.3 percent to 10.2 euros as of 9:07 a.m. today in Milan. Erg has fallen 1.9 percent since the start of the year.
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