Eni Cuts Dividend as Virus Crisis Erases Quarterly Profit

(Bloomberg) -- Eni SpA reported a second-quarter loss and reduced its dividend as the coronavirus crisis sent oil prices plunging.

The Italian giant, one of several European energy majors reporting results on Thursday, was hurt by slumping demand for crude and fuels as governments imposed lockdowns to contain the virus. Consumption fell particularly sharply in its home market, the first European economy crippled by the pandemic.

Eni’s adjusted net loss was 714 million euros ($839 million) in the quarter, compared with a profit a year earlier, the Rome-based company said in a statement. Analysts had estimated a 1.11 billion-euro loss.

Eni now sees its full-year dividend at 55 euro cents a share, compared with an expectation of 89 euro cents back in February. The decision to cut follows similar moves at Royal Dutch Shell Plc and Equinor ASA.

“We have gone through what is likely to be one of the most challenging quarters the oil and gas industry has faced in its history,” Chief Executive Officer Claudio Descalzi said in the statement. “Emerging from the pandemic will be difficult, with signs of great uncertainty still to come.”

Eni shares fell 3.8% in Milan to trade at 8.09 euros as of 9:25 a.m. local time. The stock has slumped 42% this year.

The company’s quarterly production slid to 1.71 million barrels of oil equivalent a day from 1.83 million a day a year earlier, according to the statement. Eni cut its forecast for the year to 1.71 million to 1.76 million barrels a day from a previous projection of as much as 1.8 million.

The revision reflects a 2.6 billion-euro reduction in 2020 capital spending, lower global gas demand and persistent operational problems in Libya.

Shell and Total SE also reported quarterly results on Thursday, with both beating estimates thanks to their mammoth trading operations.

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