Feb. 13 (Bloomberg) -- Eni SpA, Italy’s biggest oil company, said profit slumped 14 percent in the fourth quarter due to production halts in Libya and Nigeria and shrinking refining margins.
Adjusted net income declined to 1.3 billion euros ($1.77 billion), Eni said in a statement today. That’s higher than the 1.21 billion euro mean estimate of 17 analysts surveyed by Bloomberg. Oil and natural gas production fell 9.7 percent.
“Eni achieved solid results in a particularly difficult market,” Chief Executive Officer Paolo Scaroni said in a stock exchange statement.
Eni, the biggest foreign oil producer in Libya, has been struggling with reduced output as power struggles between regions led to strikes and other disruptions. The Rome-based company is also facing stagnating prices, narrowing refining margins and higher costs of drilling in line with competitors like Royal Dutch Shell Plc and BP Plc.
Production increases in Algeria and Egypt partly offset the negative impact of halts elsewhere, Eni said. The company said today it had discovered the equivalent of about 2.5 billion barrels of oil and gas off the coast of the Republic of Congo in west Africa. Eni holds 65 percent of the block.
While the Congo discovery is positive Eni financial results “confirm its short-term difficulties,” Equita Sim analyst Roberto Letizia wrote in a note to clients today. He has a “hold” on the stock with target price of 18.7 euros.
The shares rose 0.6 percent to 17.1 euros at 9:40 a.m. today in Milan.
Oil and gas production this year will be in line with 2013. The company produced 1.58 million barrels of oil a day in the fourth quarter, compared with 1.75 million barrels a day a year earlier.
Uncertainties remain in this year’s outlook “due to weak growth prospects in the Eurozone and risks concerning emerging economies,” Eni said in the statement. The company sees the trading environment remaining “challenging” and sees “continuing weak conditions” for gas distribution, refining and marketing of fuels and chemical products in Europe.
Eni’s gas and power division had an adjusted net loss of 246 million euros in 2013 compared with 473 million euros profit a year earlier. Its refining and marketing division registered a 232 million euro adjusted net loss, widening from a 179 million-euro loss a year earlier.
The company, which has promised it’s committed to restore profitability and preserve cash generation, said today it will propose a dividend of 1.1 euros per share in line with expectations.
Eni will present its 2014-2017 strategic plan to analysts this afternoon.
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