By Francesca Landini
MILAN (Reuters) -Italian energy group Eni on Friday reported fourth-quarter adjusted net profit of 1.64 billion euros, which beat analysts' forecasts thanks to a record performance from its global gas and LNG division that included a one-off arbitration.
The gas and LNG operations reached an adjusted EBIT of 0.68 billion euros helped by the 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 supply contract that expired in 2022.
The gas and LNG division exceeded the group's guidance throughout 2023, but this was partly offset by weak results at the chemicals business, with Eni citing slowing demand as well as higher energy and input costs.
"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 (TSX:RY) Europe analyst Biraj Borkhataria said in a report.
Shares in Eni were down 1.9% at 1020 GMT, underperforming a 0.5% rise in Milan's blue-chip index.
The company will present its updated strategy on March 14.
Eni has pledged to buy back shares worth 2.2 billion euros by April. The buyback and cancellation of the shares could offer Italy's government the opportunity to trim its stake in the energy group, Italy's finance minister said last year.
The government currently owns a combined 32.4% of Eni, which is expected to increase to more than 34% as a result of the share repurchase programme.
Once the buyback is completed, the Treasury could potentially sell 4% of Eni, which is worth around 2 billion euros at current market prices.
Rivals Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and Shell (LON:RDSa) earlier this month beat profit expectations on a mix of strong trading results and higher oil and gas production.
Shell, Chevron and TotalEnergies (EPA:TTEF) increased their dividends while BP (LON:BP) increased the rate of its buybacks.
Eni continued to develop its energy transition businesses Plenitude and Enilive under its so-called "satellite approach", which aims to create independent units able to attract investors.
"Our results were underpinned by our distinctive satellite model that continues to prove to be an effective lever in accelerating growth and value creation," CEO Claudio Descalzi said.
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.