EGL, Power, Renewables
Production and sales
IIQ
|
|
|
IIIQ
|
|
Nine
months
|
|
2020
|
|
2020
|
2019
|
%
Ch.
|
2020
|
2019
|
%
Ch.
|
|
EGL
|
|
|
|
|
|
|
|
0.88
|
Retail
gas sales
|
bcm
|
0.66
|
0.74
|
(11)
|
5.17
|
6.14
|
(16)
|
2.78
|
Retail
power sales
|
TWh
|
3.14
|
2.81
|
12
|
9.31
|
8.15
|
14
|
9.55
|
Retail
customers (POD)
|
mln
pod
|
9.54
|
9.32
|
2
|
9.54
|
9.32
|
2
|
|
Power & Renewables
|
|
|
|
|
|
|
|
5.60
|
Power sales in the
open market
|
TWh
|
6.65
|
7.37
|
(10)
|
18.75
|
21.42
|
(12)
|
4.88
|
Thermoelectric production
|
|
5.43
|
5.86
|
(7)
|
15.77
|
16.60
|
(5)
|
100
|
Energy production sold
from renewable sources
|
GWh
|
108
|
18
|
..
|
252
|
44
|
..
|
251
|
Installed capacity
from renewables at period end
|
MW
|
276
|
42
|
..
|
276
|
42
|
..
|
78
|
of which: - photovoltaic
|
%
|
80
|
100
|
|
80
|
100
|
|
19
|
-
wind
|
|
17
|
|
|
17
|
|
|
3
|
-
installed storage capacity
|
|
3
|
|
|
3
|
|
|
|
·
|
Retail gas sales
amounted to 0.66 bcm in the third quarter of 2020, down by 11% from the third quarter 2019 due to the economic downturn
following the pandemic crisis, which impacted sales volumes at small and medium-sized enterprises and the wholesale segment,
as well as due to seasonal factors, partly offset by a slight recovery in retail consumptions. In the nine months 2020, retail
gas sales amounted to 5.17 bcm, down by 16% vs. the comparative period, mainly due to lower volumes marketed to small and
medium-sized enterprises and to the retail consumers.
|
|
·
|
Retail power
sales were 3.14 TWh in the third quarter of 2020 and 9.31 TWh in the nine months, increasing by 12% and 14% respectively,
benefitting from the growth of the retail customers portfolio outside Italy.
|
|
·
|
Power sales in
the open market were 6.65 TWh in the third quarter, decreased by 10% due to the economic downturn (18.75 Twh in the nine
months; down by 12% from the same period of 2019).
|
|
·
|
Energy production
from renewable sources amounted to 108 GWh in the third quarter of 2020, a six-fold increase from the same period of 2019
(252 GWh in the nine months) due to new capacity following the finalization of construction projects mainly in Italy and abroad,
as well as the contribution of the US assets acquired in the first quarter of 2020.
|
|
·
|
As of September
30, 2020, the installed capacity from renewables was 276 MW: 80% attributable to photovoltaic plants and 17% attributable
to wind farms.
|
|
·
|
Capacity under
construction (sanctioned/obtained authorizations) at period end amounted to 170 MW mainly relating to Badamsha 2 (wind
project) and Shaulder (photovoltaic project) in Kazakhstan, the three wind farms project in the Southern Italy, acquired by
Asja Ambiente Italia, as well as the BEHUS assets, being acquired in the USA.
|
Results
IIQ
|
|
|
IIIQ
|
|
Nine
months
|
|
2020
|
(€
million)
|
2020
|
2019
|
%
Ch.
|
2020
|
2019
|
% Ch.
|
113
|
Operating
profit (loss)
|
|
43
|
(9)
|
..
|
256
|
99
|
..
|
(28)
|
Exclusion of special
items
|
|
14
|
24
|
|
77
|
115
|
|
85
|
Adjusted
operating profit (loss)
|
|
57
|
15
|
280
|
333
|
214
|
56
|
26
|
- Eni gas e luce
|
|
39
|
(4)
|
..
|
222
|
162
|
37
|
59
|
- Power & Renewables
|
|
18
|
19
|
(5)
|
111
|
52
|
..
|
(1)
|
Net finance (expense)
income
|
|
|
|
|
(1)
|
|
|
(1)
|
Net income (expense)
from investments
|
|
(3)
|
(1)
|
|
4
|
7
|
|
(27)
|
Income taxes
|
|
(15)
|
(5)
|
|
(102)
|
(66)
|
|
56
|
Adjusted
net profit (loss)
|
|
39
|
9
|
..
|
234
|
155
|
51
|
70
|
Capital
expenditure
|
|
63
|
88
|
(28)
|
204
|
221
|
(8)
|
|
·
|
In the third quarter
of 2020 the retail gas and power business, managed by Eni gas e luce, reported a solid and growing performance (adjusted
operating profit increased by €43 million vs. the quarter 2019; up by €60 million in the nine months) notwithstanding
reduced sales due to lower consumption following the economic downturn and higher provisions for impairment losses at trade
receivables in line with an expected deterioration in the counterparty risk. The performance was supported by commercial and
efficiency initiatives, the contribution of extra-commodity business in Italy and by the development of the business in France
and Greece. The Power & Renewables business reported an adjusted operating profit of €18 million (unchanged)
and €111 million (up by €59 million) in the third quarter and in the nine months, respectively, benefitting from
optimizations of assets portfolio and higher margins.
|
For the disclosure
on business segment special charges, see page 15.
IIQ
|
|
IIIQ
|
|
Nine
months
|
|
2020
|
(€
million)
|
2020
|
2019
|
%
Ch.
|
2020
|
2019
|
%
Ch.
|
8,157
|
Sales
from operations
|
10,326
|
16,686
|
(38)
|
32,356
|
53,666
|
(40)
|
(2,680)
|
Operating
profit (loss)
|
220
|
1,861
|
(88)
|
(3,555)
|
6,610
|
..
|
(183)
|
Exclusion
of inventory holding (gains) losses
|
(7)
|
109
|
|
1,387
|
(237)
|
|
2,429
|
Exclusion
of special items (a)
|
324
|
189
|
|
3,578
|
419
|
|
(434)
|
Adjusted
operating profit (loss)
|
537
|
2,159
|
(75)
|
1,410
|
6,792
|
(79)
|
|
Breakdown
by segment:
|
|
|
|
|
|
|
(807)
|
Exploration
& Production
|
515
|
2,141
|
(76)
|
745
|
6,589
|
(89)
|
130
|
GGP
|
64
|
69
|
(7)
|
427
|
239
|
79
|
73
|
Refining
& Marketing and Chemicals
|
21
|
149
|
(86)
|
110
|
182
|
(40)
|
85
|
EGL,
Power, Renewables
|
57
|
15
|
280
|
333
|
214
|
56
|
(135)
|
Corporate
and other activities
|
(84)
|
(144)
|
42
|
(423)
|
(399)
|
(6)
|
220
|
Impact of unrealized intragroup profit
elimination and other consolidation adjustments
|
(36)
|
(71)
|
|
218
|
(33)
|
|
|
|
|
|
|
|
|
|
(4,406)
|
Net
profit (loss) attributable to Eni's shareholders
|
(503)
|
523
|
|
(7,838)
|
2,039
|
|
(127)
|
Exclusion
of inventory holding (gains) losses
|
(5)
|
77
|
|
986
|
(167)
|
|
3,819
|
Exclusion
of special items (a)
|
355
|
176
|
|
6,044
|
458
|
|
(714)
|
Adjusted
net profit (loss) attributable to Eni's shareholders
|
(153)
|
776
|
|
(808)
|
2,330
|
|
(a) For further information see table “Breakdown of special items”.
Adjusted results
|
·
|
In the third quarter
of 2020, the Group reported an adjusted operating profit of €537 million, down by €1.6 billion from the same
period of 2019. Net of scenario effects of -€1.6 billion and the negative impacts associated with COVID-19 of €0.3
billion3, the underlying performance was positive for €0.3 billion, due to the drivers disclosed in the
business segments review.
|
|
·
|
In the nine months
of 2020, the Group’s adjusted operating profit of €1,410 million was approximately €5.38 billion lower
than the nine months of 2019. Net of scenario effects of -€5.1 billion and the negative impacts associated with COVID-19
of €0.8 billion3, the underlying performance was positive for €0.5 billion, due to the drivers disclosed
in the business segments review.
|
|
·
|
Adjusted net
result was a loss of €153 million and €808 million in the third quarter and the nine months of 2020, respectively,
due to a weaker operating performance and to lower results at equity-accounted JVs and associates due to a deteriorated macroeconomic
backdrop as well as a significantly increased tax rate.
|
Analysis
of Group’s tax rate
|
·
|
In the nine months
of 2020, the Group's tax rate recorded a disproportionate value, with accrued income taxes being more than 100% of pre-tax
profit due to a depressed pricing scenario which, on the one hand, determined higher relative weight of certain transactions
and therefore higher distortive effects of certain tax items than in the past, on the other hand limited the Company’s
ability to recognize deferred tax assets for current losses. In particular, the Group tax rate was negatively affected by
the following trends:
|
|
-
|
the incurrence of
non-deductible expenses and losses, because their tax recognition depends on the achievement of certain project milestones
(such as a project FID) like in the case of explorations expenses or because they related to intercompany losses as in the
case of the one incurred in connection with the resale of the gas entitlements of a Libyan partner; those impacts under normal
scenarios are strongly mitigated;
|
|
-
|
inability to recognize
tax-losses carryforwards in certain jurisdictions due to lack of sufficient future taxable profits against which offset deferred
tax assets as required by IFRS 12;
|
|
-
|
the recognition
of current income taxes on intercompany dividend distribution which created a mismatch due to absence of pre-tax profit at
Group level (intercompany dividends are eliminated in the consolidation process).
|
3 They
comprise a reduction in hydrocarbon production due to capex cut and lower global gas demand, lower offtakes at LNG supply in Asia,
lower production sale volumes in R&M and Chemicals, higher allowances for doubtful accounts due to an expected deterioration
in the counterparty risk.
Net
of these transactions, the Group’s normalized tax rate would come at 72% reflecting the high impact in the Eni’s portfolio
of PSA oil contracts that have tax rates less sensitive to oil prices.
(€
million)
|
Nine
months 2020
|
|
reported
(ex-special items)
|
costs,
losses and non-deductible exploration items
|
amounts
of deferred
tax assets not
recognized on losses
for the period
|
tax
accrued on intercompany dividends
|
normalized
tax rate
|
Pre-tax profit
|
628
|
692
|
|
|
1,320
|
Accrued income
taxes
|
1,431
|
|
(354)
|
(130)
|
947
|
Tax
rate
|
n.s.
|
|
|
|
72%
|
Special items
The breakdown
of special items of operating profit by segment (a net charge of €3,578 million in the nine months and €324 million
in the quarter) is the following:
|
·
|
E&P: net
charges of €1,909 million in the nine months (€1 million in the quarter) related mainly to impairment losses recorded
at oil and gas properties in production or under development (€1,657 million, totally related to the first half) following
an impairment review of all oil&gas CGUs, driven by a downward revision to management’s expectations for crude oil
prices in the long-term, which were reduced to 60 $/barrel and the associated curtailments of expenditures in the years 2020-2021
with the re-phasing of a number of projects, in order to preserve cash generation. The main impairment losses were recorded
at CGUs in Italy, the USA, Algeria, Turkmenistan and Congo. Other special items included: an allowance for doubtful accounts
relating a barrel-denominated receivable to align its carrying value to current value (€108 million in the nine months
of 2020), risk provisions (€107 million in the nine months);
|
|
·
|
GGP: net
charges of €469 million in the nine months of 2020 (€269 million in the quarter) included the accounting effect
of certain fair-valued commodity derivatives lacking the formal criteria to be classified as hedges (€469 million and
€318 million in the nine months of 2020 and in the quarter, respectively); the reclassification to adjusted operating
profit of the negative balance of €100 million (negative of €93 million in the quarter) related to derivative financial
instruments used to manage margin exposure to foreign currency exchange rate movements and exchange translation differences
of commercial payables and receivables; and charge given by the difference between the change in gas inventories accounted
under the weighted-average cost method provided by IFRS and management’s own measure of inventories which moves forward
at the time of inventory drawdown the margins captured on volumes in inventories above their normal levels leveraging the
seasonal spread in gas prices net of the effects of the associated commodity derivatives (€43 million in the quarter
and €95 million in the nine months);
|
|
·
|
R&M and Chemicals:
net charges of €1,034 million in the nine months (€13 million in the quarter) relating mainly to impairment
losses at refineries (€1,004 million, mainly related to the first half) driven by a reviewed outlook for refining margins
due to lower expectation on products spreads and the appreciation of medium-sour crude oil compared to the light-sweet crude
oil. Other special items relate to environmental charges (€13 million and €74 million in the third quarter and the
nine months of 2020, respectively), as well as the accounting effect of certain fair-valued commodity derivatives lacking
the formal criteria to be classified as hedges or to be eligible for the own use exemption (gain of €27 million and €125
million in the quarter and in the nine months of 2020, respectively);
|
|
·
|
EGL, Power, Renewables:
net charge of €77 million (€14 million in the quarter) included the accounting effect of certain fair-valued commodity
derivatives lacking the formal criteria to be classified as hedges (charges of €45 million and gain of €14 million
in the nine months of 2020 and in the third quarter, respectively) and provision for redundancy incentives (€27 million
and €26 million in the nine months and in the quarter, respectively).
|
Special
items of investment in the nine months include: (i) charges of €703 million relating to the JV Vår Energi, driven
by impairment losses recorded at oil&gas assets due to a revised oil price outlook. A special charge was also recorded in
connection with accrued currency translation differences at finance debt denominated in a currency other than the reporting currency
for which the reimbursement cash outflows are expected to be matched by highly probable cash inflows from the sale of production
volumes, in the same currency as the finance debt as part of a natural hedge relationship; (ii) a loss of €246 million relating
to non-current assets impairment losses driven by a reviewed scenario of refining margins and the alignment of raw material and
products inventories to their net realizable values at period end at ADNOC Refining; (iii) charges of €252 million relating
to Saipem.
Reported results
In the nine
months of 2020, the Group reported a net loss attributable to Eni’s shareholders of €7,838 million compared
to a net profit of €2,039 million reported in the same period of the previous year due to an operating loss of approximately
€3.6 billion. In addition to the drivers described in the review of the Company’s business segments, the operating
performance was negatively affected by the recognition of impairment losses of €2.75 billion mainly taken at oil&gas
assets and refineries, driven by the revision of the scenario for Brent prices and margins and by the impact of falling oil and
product prices on inventories evaluation, which were aligned to their net realizable values at period end (resulting in an operating
charge of €1.4 billion). The Group incurred losses of €1.32 billion at joint ventures and other industrial investments
which were negatively affected by the same market and industrial trends as operated activities, as well as to impairment losses
of tangible assets and inventories valuation allowance.
Finally,
the net result was negatively affected by the write-off of deferred tax assets driven by projections of lower future taxable income
(€0.8 billion).
Net borrowings and cash flow from operations
IIQ
|
|
IIIQ
|
|
|
Nine
months
|
|
2020
|
(€
million)
|
2020
|
2019
|
Change
|
|
2020
|
2019
|
Change
|
(4,405)
|
Net
profit (loss)
|
(501)
|
524
|
(1,025)
|
|
(7,833)
|
2,044
|
(9,877)
|
|
Adjustments to reconcile net profit
(loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
4,970
|
- depreciation, depletion and amortization
and other non monetary items
|
1,860
|
1,962
|
(102)
|
|
10,165
|
6,246
|
3,919
|
(1)
|
- net gains on disposal
of assets
|
(2)
|
(18)
|
16
|
|
(6)
|
(44)
|
38
|
1,245
|
- dividends, interests
and taxes
|
658
|
1,483
|
(825)
|
|
2,624
|
4,666
|
(2,042)
|
3
|
Changes in working
capital related to operations
|
(74)
|
(438)
|
364
|
|
614
|
(972)
|
1,586
|
172
|
Dividends received
by equity investments
|
85
|
72
|
13
|
|
413
|
1,227
|
(814)
|
(334)
|
Taxes paid
|
(352)
|
(1,220)
|
868
|
|
(1,424)
|
(3,736)
|
2,312
|
(247)
|
Interests (paid) received
|
(218)
|
(310)
|
92
|
|
(719)
|
(764)
|
45
|
1,403
|
Net
cash provided by operating activities
|
1,456
|
2,055
|
(599)
|
|
3,834
|
8,667
|
(4,833)
|
(978)
|
Capital expenditure
|
(889)
|
(1,899)
|
1,010
|
|
(3,457)
|
(6,135)
|
2,678
|
(42)
|
Investments
|
(95)
|
(2,931)
|
2,836
|
|
(359)
|
(2,982)
|
2,623
|
13
|
Disposal of consolidated subsidiaries,
businesses, tangible and intangible assets and investments
|
1
|
192
|
(191)
|
|
22
|
230
|
(208)
|
(300)
|
Other cash flow related to capital expenditure,
investments and disposals
|
(339)
|
(117)
|
(222)
|
|
(732)
|
(76)
|
(656)
|
96
|
Free
cash flow
|
134
|
(2,700)
|
2,834
|
|
(692)
|
(296)
|
(396)
|
1,198
|
Borrowings (repayment) of debt related
to financing activities
|
507
|
(31)
|
538
|
|
970
|
(153)
|
1,123
|
3,359
|
Changes
in short and long-term financial debt
|
372
|
(1,432)
|
1,804
|
|
3,279
|
(2,095)
|
5,374
|
(213)
|
Repayment
of lease liabilities
|
(214)
|
(255)
|
41
|
|
(676)
|
(652)
|
(24)
|
(1,537)
|
Dividends paid and changes in non-controlling
interests and reserves
|
(423)
|
(1,719)
|
1,296
|
|
(1,960)
|
(3,244)
|
1,284
|
(17)
|
Effect of changes in consolidation, exchange
differences and cash and cash equivalent
|
(24)
|
16
|
(40)
|
|
(36)
|
18
|
(54)
|
2,886
|
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENT
|
352
|
(6,121)
|
6,473
|
|
885
|
(6,422)
|
7,307
|
1,148
|
Adjusted net cash
before changes in working capital at replacement cost
|
1,774
|
2,573
|
(799)
|
|
5,144
|
9,162
|
(4,018)
|
|
|
|
|
|
|
|
|
|
IIQ
|
|
IIIQ
|
|
|
Nine
months
|
|
2020
|
(€
million)
|
2020
|
2019
|
Change
|
|
2020
|
2019
|
Change
|
96
|
Free
cash flow
|
134
|
(2,700)
|
2,834
|
|
(692)
|
(296)
|
(396)
|
(213)
|
Repayment
of lease liabilities
|
(214)
|
(255)
|
41
|
|
(676)
|
(652)
|
(24)
|
(1)
|
Net
borrowings of acquired companies
|
|
|
|
|
(67)
|
|
(67)
|
|
Net
borrowings of divested companies
|
|
13
|
(13)
|
|
|
13
|
(13)
|
246
|
Exchange differences on net borrowings
and other changes
|
307
|
(179)
|
486
|
|
347
|
(241)
|
588
|
(1,537)
|
Dividends paid and changes in non-controlling
interest and reserves
|
(423)
|
(1,719)
|
1,296
|
|
(1,960)
|
(3,244)
|
1,284
|
(1,409)
|
CHANGE IN NET BORROWINGS
BEFORE LEASE LIABILITIES
|
(196)
|
(4,840)
|
4,644
|
|
(3,048)
|
(4,420)
|
1,372
|
|
IFRS 16 first application
effect
|
|
|
|
|
|
(5,759)
|
5,759
|
213
|
Repayment of lease
liabilities
|
214
|
255
|
(41)
|
|
676
|
652
|
24
|
(94)
|
New leases subscription
of the period and other changes
|
100
|
(341)
|
441
|
|
(356)
|
(701)
|
345
|
119
|
Change
in lease liabilities
|
314
|
(86)
|
400
|
|
320
|
(5,808)
|
6,128
|
(1,290)
|
CHANGE
IN NET BORROWINGS AFTER LEASE LIABILITIES
|
118
|
(4,926)
|
5,044
|
|
(2,728)
|
(10,228)
|
7,500
|
Net cash
provided by operating activities in the nine months of 2020 was €3,834 million, 56% lower than the same period of the
previous year due to a deteriorated scenario and the circumstance that the 2019 amount included higher dividends paid by the JV
Vår Energi (€1,047 million in 2019 vs. €232 million in the current period).
Changes in
working capital in the nine months of 2020 were positive for €614 million mainly driven by a reduction in the book value
of inventories due to the alignment to their net realizable values at period-end and despite a lower amount of trade receivables
due in subsequent reporting periods divested to financing institutions compared to the fourth quarter 2019 (-€1.2 billion).
Adjusted
cash flow was €5,144 million (€1,774 million in the quarter) 44% lower than the same period of the previous year.
This Non-GAAP measure includes net cash provided by operating activities before changes in working capital excluding inventory
holding gains or losses and provisions for extraordinary credit losses and other charges, as well as from the third quarter 2020
considering the high market volatility, changes in fair value of commodity derivatives lacking the formal criteria to be designated
as hedges, for which the underlying transactions are expected to occur in future reporting periods. The reduction from the nine
months 2019 is due to scenario effects of -€4.8 billion, including the impact of dividends from equity accounted entities,
operational impacts associated with the COVID-19 for -€0.9 billion, while the underlying performance was a positive of €1.7
billion.
The Group
cash tax rate was 29% (33% in the nine months of 2019).
A reconciliation
of adjusted net cash before changes in working capital at replacement cost to net cash provided by operating activities
for the third quarter and nine-months period of 2020 is provided below:
|
IIIQ
|
|
Nine months
|
|
(€
million)
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Net
cash provided by operating activities
|
1,456
|
2,055
|
(599)
|
3,834
|
8,667
|
(4,833)
|
Changes
in working capital related to operations
|
74
|
438
|
(364)
|
(614)
|
972
|
(1,586)
|
Exclusion
of commodity derivatives
|
277
|
(29)
|
306
|
389
|
(240)
|
629
|
Exclusion
of inventory holding (gains) losses
|
(7)
|
109
|
(116)
|
1,387
|
(237)
|
1,624
|
Provisions
for extraordinary credit losses and other charges
|
(26)
|
|
|
148
|
|
|
Adjusted
net cash before changes in working capital at replacement cost
|
1,774
|
2,573
|
(799)
|
5,144
|
9,162
|
(4,018)
|
Cash outflows
for capital expenditure and investments were €3,816 million, including the acquisition of the control of the Evolvere
company and of minority interests in Finproject and in Novis Renewables Holdings, as well as capital contributions made to certain
equity-accounted entities engaged in the execution of projects of Eni’s interest. Net of the above-mentioned non-organic
items and of utilization of trade advances cashed by Egyptian partners in previous reporting periods in relation to the financing
of the Zohr project (€0.26 billion), net capital expenditures amounted to €3.76 billion, 33% lower than the same period
of 2019 leveraging the curtailments implemented by the management following a review of the industrial plan 2020-2021 in response
to the pandemic COVID-19 crisis. In the nine months of 2020 net capex were fully funded by the adjusted cash flow.
Summarized Group Balance Sheet
(€
million)
|
Sept.
30, 2020
|
Dec.
31, 2019
|
Change
|
|
|
|
|
|
|
|
|
Fixed
assets
|
|
|
|
Property, plant
and equipment
|
55,726
|
62,192
|
(6,466)
|
Right
of use
|
4,950
|
5,349
|
(399)
|
Intangible
assets
|
3,025
|
3,059
|
(34)
|
Inventories
- Compulsory stock
|
914
|
1,371
|
(457)
|
Equity-accounted
investments and other investments
|
8,130
|
9,964
|
(1,834)
|
Receivables
and securities held for operating purposes
|
1,264
|
1,234
|
30
|
Net
payables related to capital expenditure
|
(1,473)
|
(2,235)
|
762
|
|
72,536
|
80,934
|
(8,398)
|
Net
working capital
|
|
|
|
Inventories
|
4,031
|
4,734
|
(703)
|
Trade
receivables
|
6,968
|
8,519
|
(1,551)
|
Trade
payables
|
(7,736)
|
(10,480)
|
2,744
|
Net
tax assets (liabilities)
|
(3,500)
|
(1,594)
|
(1,906)
|
Provisions
|
(13,225)
|
(14,106)
|
881
|
Other
current assets and liabilities
|
(1,597)
|
(1,864)
|
267
|
|
(15,059)
|
(14,791)
|
(268)
|
Provisions
for employee post-retirements benefits
|
(1,109)
|
(1,136)
|
27
|
Assets
held for sale including related liabilities
|
18
|
18
|
|
CAPITAL
EMPLOYED, NET
|
56,386
|
65,025
|
(8,639)
|
|
|
|
|
Eni's
shareholders equity
|
36,460
|
47,839
|
(11,379)
|
Non-controlling
interest
|
73
|
61
|
12
|
Shareholders'
equity
|
36,533
|
47,900
|
(11,367)
|
Net
borrowings before lease liabilities ex IFRS 16
|
14,525
|
11,477
|
3,048
|
Lease
liabilities
|
5,328
|
5,648
|
(320)
|
-
of which Eni working interest
|
3,588
|
3,672
|
(84)
|
-
of which Joint operators' working interest
|
1,740
|
1,976
|
(236)
|
Net
borrowings after lease liabilities ex IFRS 16
|
19,853
|
17,125
|
2,728
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
56,386
|
65,025
|
(8,639)
|
Leverage
before lease liabilities ex IFRS 16
|
0.40
|
0.24
|
0.16
|
Leverage
after lease liabilities ex IFRS 16
|
0.54
|
0.36
|
0.18
|
Gearing
|
0.35
|
0.26
|
0.09
|
|
|
|
|
|
·
|
As of September
30, 2020, fixed assets decreased by €8,398 million mainly due to: (i) impairment losses and amortization and depletion
charges taken at PP&E, as well as negative currency translation differences partly offset by capex incurred in the period;
(ii) a reduction in the book value of equity accounted investments and other investments driven by losses incurred at the
main equity-accounted entities (Vår Energi and ADNOC Refining); (iii) the write-down of compulsory stock following a
decline in crude oil and product prices.
|
|
·
|
Net working capital
(-€15,059 million) decreased by €268 million mainly driven by a lower value of oil and products inventories
due to the alignment of the book value to market prices at the period-end (-€703 million), the write-off of deferred
tax assets due to a deteriorated profitability outlook, partly offset by a higher balance between trade payable paid and trade
receivables cashed (approximately up by €1.2 billion) and reduced provisions mainly due to utilizations with respect
to the incurrence of expenses.
|
|
·
|
Shareholders’
equity (€36,533 million) decreased by €11,367 million compared to December 31, 2019 due to the net loss for
the period (-€7,833 million), the payment of dividends to Eni’s shareholders (€1,965 million related to the
2019 final dividend and the 2020 interim dividend) as well as negative foreign currency translation differences (-€1,806
million) reflecting the depreciation of the dollar vs. the euro as of September 30, 2020 vs. December 31, 2019, partly offset
by a positive change in the cash flow hedge reserve (+€271 million).
|
|
·
|
Net borrowings4
as of September 30, 2020 were €19,853 million increasing by €2,728 million from 2019. When excluding the lease
liabilities, net borrowings were re-determined at €14,525 million increasing by €3,048 million.
|
|
·
|
Leverage5
– the ratio of the borrowings to total equity - was 0.54 at September 30, 2020. The impact of the lease liability
pertaining to joint operators in Eni-led upstream unincorporated joint ventures weighted on leverage for 4 points. Excluding
the impact of IFRS 16 altogether, leverage would be 0.40.
|
4 Details
on net borrowings are furnished on page 31.
5 Non-GAAP
financial measures and other alternative performance indicators disclosed throughout this press release are accompanied by explanatory
notes and tables in line with guidance provided by ESMA guidelines on alternative performance measures (ESMA/2015/1415), published
on October 5, 2015. For further information, see the section “Non-GAAP measures” of this press release. See pages
23 and subsequent.
Other information, basis
of presentation and disclaimer
This press
release on Eni’s results for the third quarter and the nine months of 2020 has been prepared on a voluntary basis according
to article 82-ter, Regulations on issuers (CONSOB Regulation No. 11971 of May 14, 1999 and subsequent amendments and inclusions).
The disclosure of results and business trends on a quarterly basis is consistent with Eni’s policy to provide the market
and investors with regular information about the Company’s financial and industrial performances and business prospects
considering the reporting policy followed by oil&gas peers who are communicating results on quarterly basis. Results and cash
flow are presented for the second and third quarter of 2020, the nine months of 2020 and for the third quarter and the nine months
of 2019. Information on the Company’s financial position relates to end of the periods as of September 30, 2020 and December
31, 2019.
Accounts
set forth herein have been prepared in accordance with the evaluation and recognition criteria set by the International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Commission
according to the procedure set forth in Article 6 of the European Regulation (CE) No. 1606/2002 of the European Parliament and
European Council of July 19, 2002.
These criteria are unchanged
from the 2019 Annual Report on Form 20-F filed with the US SEC on April 2, 2020, which investors are urged to read.
Effective
January 1, 2020, Eni has updated the conversion rate of gas produced to 5,310 cubic feet of gas equals 1 barrel of oil (it was
5,408 cubic feet of gas per barrel in previous reporting periods). This update reflected changes in volumes and Eni’s gas
properties that took place in the last years and was assessed by collecting data on the heating power of gas in Eni’s gas
fields currently on stream. The effect of this update on production expressed in boe was 16 kboe/d for the third quarter and nine
months. For the sake of comparability also production of the first and the second quarter of 2020 was restated resulting in an
effect equal to that of the third quarter. Other per-boe indicators were only marginally affected by the update (e.g. realized
prices, costs per boe) and also negligible was the impact on depletion charges. Other oil companies may use different conversion
rates.
The
Group’s new segment information
Effective
July 1, 2020, Eni’s management has redesigned the macro-organizational structure of the Group, in line with its new long-term
strategy, disclosed on February 2020 to the market and aimed at transforming the Company into a leader in the production and marketing
of decarbonized energy products.
The new
organization is based on two new business groups:
|
•
|
Natural Resources,
to build up the value of Eni’s oil & gas upstream portfolio, with the objective of reducing its carbon footprint
by scaling up energy efficiency and expanding production in the natural gas business, and its position in the wholesale market.
Furthermore, it will focus its actions on the development of carbon capture and compensation projects. The business group
will incorporate the Company’s oil & gas exploration, development and production activities, natural gas wholesale
via pipeline and LNG. In addition, it will include forests conservation (REDD+) and carbon storage projects. The company Eni
Rewind (environmental activities), will also be consolidated in this business Group.
|
|
•
|
Energy Evolution will
focus on the evolution of the businesses of power generation, transformation and marketing of products from fossil to bio,
blue and green. In particular, it will focus on growing power generation from renewable energy and biomethane, it will coordinate
the bio and circular evolution of the Company’s refining system and chemical business, and it will further develop Eni’s
retail portfolio, providing increasingly more decarbonized products for mobility, household consumption and small enterprises.
The business group will incorporate the activities of power generation from natural gas and renewables, the refining and chemicals
businesses, Retail Gas&Power and mobility Marketing. The companies Versalis (chemical products) and Eni gas e luce will
also be consolidated in this business Group.
|
In re-designing
the Group’s segment information for financial reporting purposes, the management evaluated that the components of the Company
whose operating results are regularly reviewed by the Chief Operating Decision Maker (CEO) to make decisions about the allocation
of resources and to assess performances would continue being the single business units which are comprised in the two newly-established
business groups, rather than the two groups themselves. Therefore, in order to comply with the provisions of the international
reporting standard that regulates the segment reporting (IFRS 8), the new reportable segments of Eni, substantially confirming
the pre-existing setup, are identified as follows:
|
•
|
Exploration &
Production: research, development and production of oil, condensates and natural gas, forestry conservation (REDD+) and
CO2 capture and storage projects.
|
|
•
|
Global Gas and
LNG Portfolio (GGP): supply and sale of wholesale natural gas by pipeline, international transport and purchase and marketing
of LNG. It includes gas trading activities finalized to hedging and stabilizing the trade margins, as well as optimising the
gas asset portfolio.
|
|
•
|
Refining &
Marketing and Chemicals: supply, processing, distribution and marketing of fuels and chemicals. The results of the
Chemicals segment were aggregated with the Refining & Marketing performance in a single reportable segment, because these
two operating segments have similar economic returns. It comprises the activities of trading oil and products with the
aim to execute the transactions on the market in order to balance the supply and stabilize and cover the commercial margins.
|
|
•
|
Retail gas &
power and generation of electricity from traditional/renewable sources. Retail sales of gas, electricity and related
services, production and wholesale sales of electricity from thermoelectric and renewable plants. It includes trading
activities of CO2 emission certificates and forward sale of electricity with a view to hedging/optimising the margins
of the electricity.
|
|
•
|
Corporate and
Other activities: includes the main business support functions, in particular holding, central treasury, IT, human resources,
real estate services, captive insurance activities, research and development, new technologies, business digitalization and
the environmental activity developed by the subsidiary Eni Rewind.
|
According
to the requirements of IFRS 8, the new Eni information segment has been effective since January 1, 2020; therefore, the results
of the first and second quarter of 2020 and the 2019 comparative periods have been restated to adjust them to the change of the
segment information, as follows:
2020
|
|
First quarter
|
Second quarter
|
Third quarter
|
Nine months
|
|
As published
|
As restated
|
As published
|
As restated
|
previous segmentation
|
new segmentation
|
previous segmentation
|
new segmentation
|
Adjusted operating profit (loss)
|
|
1,307
|
1,307
|
(434)
|
(434)
|
537
|
537
|
1,410
|
1,410
|
of which: E&P
|
|
1,037
|
1,037
|
(807)
|
(807)
|
515
|
515
|
745
|
745
|
G&P
|
|
431
|
|
218
|
|
125
|
|
774
|
|
GGP
|
|
|
233
|
|
130
|
|
64
|
|
427
|
Refining & Marketing and Chemicals
|
|
16
|
16
|
73
|
73
|
21
|
21
|
110
|
110
|
EGL, Power, Renewables
|
|
|
191
|
|
85
|
|
57
|
|
333
|
Corporate and other activities
|
|
(211)
|
(204)
|
(138)
|
(135)
|
(88)
|
(84)
|
(437)
|
(423)
|
Impact of unrealized intragroup profit elimination and other consolidation adjustments
|
|
34
|
34
|
220
|
220
|
(36)
|
(36)
|
218
|
218
|
2019
|
|
First half
|
Third quarter
|
Fourth quarter
|
Full year
|
|
As published
|
As restated
|
As published
|
As restated
|
As published
|
As restated
|
As published
|
As restated
|
Adjusted operating profit (loss)
|
|
4,633
|
4,633
|
2,159
|
2,159
|
1,805
|
1,805
|
8,597
|
8,597
|
of which: E&P
|
|
4,448
|
4,448
|
2,141
|
2,141
|
2,051
|
2,051
|
8,640
|
8,640
|
G&P
|
|
378
|
|
89
|
|
118
|
|
585
|
|
GGP
|
|
|
170
|
|
69
|
|
(46)
|
|
193
|
Refining & Marketing and Chemicals
|
33
|
33
|
149
|
149
|
(161)
|
(161)
|
21
|
21
|
EGL, Power, Renewables
|
|
|
199
|
|
15
|
|
156
|
|
370
|
Corporate and other activities
|
|
(264)
|
(255)
|
(149)
|
(144)
|
(211)
|
(203)
|
(624)
|
(602)
|
Impact of unrealized intragroup profit elimination and other consolidation adjustments
|
|
38
|
38
|
(71)
|
(71)
|
8
|
8
|
(25)
|
(25)
|
* * *
Non-GAAP
financial measures and other alternative performance indicators disclosed throughout this press release are accompanied by explanatory
notes and tables in line with guidance provided by ESMA guidelines on alternative performance measures (ESMA/2015/1415), published
on October 5, 2015. For further information, see the section “Alternative performance measures (Non-GAAP measures)”
of this press release.
The
manager responsible for the preparation of the Company’s financial reports, Francesco Esposito, declares pursuant to rule
154-bis paragraph 2 of Legislative Decree No. 58/1998 that data and information disclosed in this press release correspond to
the Company’s evidence and accounting books and records.
* * *
Disclaimer
This
press release, in particular the statements under the section “Outlook”, contains certain forward-looking statements
particularly those regarding capital expenditure, development and management of oil and gas resources, dividends, share repurchases,
allocation of future cash flow from operations, future operating performance, gearing, targets of production and sales growth,
new markets and the progress and timing of projects. By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from
those expressed in such statements, depending on a variety of factors, including the impact of the pandemic disease, the timing
of bringing new fields on stream; management’s ability in carrying out industrial plans and in succeeding in commercial
transactions; future levels of industry product supply; demand and pricing; operational issues; general economic conditions; political
stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use
of new technology; changes in public expectations and other changes in business conditions; the actions of competitors and other
factors discussed elsewhere in this document. Due to the seasonality in demand for natural gas and certain refined products and
the changes in a number of external factors affecting Eni’s operations, such as prices and margins of hydrocarbons and refined
products, Eni’s results from operations and changes in net borrowings for the quarter of the year cannot be extrapolated
on an annual basis.
* * *
Company Contacts
Press Office: Tel. +39.0252031875
- +39.0659822030
Freephone for shareholders
(from Italy): 800940924
Freephone for shareholders
(from abroad): +80011223456
Switchboard: +39-0659821
ufficio.stampa@eni.com
segreteriasocietaria.azionisti@eni.com
investor.relations@eni.com
website: www.eni.com
* * *
Eni
Società
per Azioni, Rome, Piazzale Enrico Mattei, 1
Share capital: €4,005,358,876
fully paid.
Tax identification number 00484960588
Tel.: +39 0659821 - Fax: +39
0659822141
This press
release for the third quarter and nine months of 2020 (unaudited) is also available on Eni’s website eni.com.
|
Alternative
performance indicators (Non-GAAP measures)
|
|
Management
evaluates underlying business performance on the basis of Non-GAAP financial measures, which are not provided by IFRS (“Alternative
performance measures”), such as adjusted operating profit, adjusted net profit, which are arrived at by excluding from reported
results certain gains and losses, defined special items, which include, among others, asset impairments, including impairments
of deferred tax assets, gains on disposals, risk provisions, restructuring charges, the accounting effect of fair-valued derivatives
used to hedge exposure to the commodity, exchange rate and interest rate risks, which lack the formal criteria to be accounted
as hedges, and analogously evaluation effects of assets and liabilities utilized in a relation of natural hedge of the above mentioned
market risks. Furthermore, in determining the business segments’ adjusted results, finance charges on finance debt and interest
income are excluded (see below). In determining adjusted results, inventory holding gains or losses are excluded from base business
performance, which is the difference between the cost of sales of the volumes sold in the period based on the cost of supplies
of the same period and the cost of sales of the volumes sold calculated using the weighted average cost method of inventory accounting
as required by IFRS, except in those business segments where inventories are utilized as a lever to optimize margins.
Finally,
the same special charges/gains are excluded from the Eni’s share of results at JVs and other equity accounted entities,
including any profit/loss on inventory holding.
Management
is disclosing Non-GAAP measures of performance to facilitate a comparison of base business performance across periods, and to
allow financial analysts to evaluate Eni’s trading performance on the basis of their forecasting models.
Non-GAAP
financial measures should be read together with information determined by applying IFRS and do not stand in for them. Other
companies may adopt different methodologies to determine Non-GAAP measures.
Follows the
description of the main alternative performance measures adopted by Eni. The measures reported below refer to the performance
of the reporting periods disclosed in this press release:
Adjusted operating and net
profit
Adjusted
operating profit and adjusted net profit are determined by excluding inventory holding gains or losses, special items and, in
determining the business segments’ adjusted results, finance charges on finance debt and interest income. The adjusted operating
profit of each business segment reports gains and losses on derivative financial instruments entered into to manage exposure to
movements in foreign currency exchange rates, which impact industrial margins and translation of commercial payables and receivables.
Accordingly, also currency translation effects recorded through profit and loss are reported within business segments’ adjusted
operating profit. The taxation effect of the items excluded from adjusted operating or net profit is determined based on the specific
rate of taxes applicable to each of them.
Finance
charges or income related to net borrowings excluded from the adjusted net profit of business segments are comprised of
interest charges on finance debt and interest income earned on cash and cash equivalents not related to operations.
Therefore, the adjusted net profit of business segments includes finance charges or income deriving from certain segment
operated assets, i.e., interest income on certain receivable financing and securities related to operations and finance
charge pertaining to the accretion of certain provisions recorded on a discounted basis (as in the case of the asset
retirement obligations in the Exploration & Production segment).
Inventory holding gain or
loss
This is the
difference between the cost of sales of the volumes sold in the period based on the cost of supplies of the same period and the
cost of sales of the volumes sold calculated using the weighted average cost method of inventory accounting as required by IFRS.
Special items
These include
certain significant income or charges pertaining to either: (i) infrequent or unusual events and transactions, being identified
as non-recurring items under such circumstances; (ii) certain events or transactions which are not considered to be representative
of the ordinary course of business, as in the case of environmental provisions, restructuring charges, asset impairments or write
ups and gains or losses on divestments even though they occurred in past periods or are likely to occur in future ones. Exchange
rate differences and derivatives relating to industrial activities and commercial payables and receivables, particularly exchange
rate derivatives to manage commodity pricing formulas which are quoted in a currency other than the functional currency are reclassified
in operating profit with a corresponding adjustment to net finance charges, notwithstanding the handling of foreign currency exchange
risks is made centrally by netting off naturally-occurring opposite positions and then dealing with any residual risk exposure
in the derivative market. Finally, special items include the accounting effects of fair-valued commodity derivatives relating
to commercial exposures, in addition to those which lack the criteria to be designed as hedges, also those which are not eligible
for the own use exemption, including the ineffective portion of cash flow hedges, as well as the accounting effects of settled
commodity and exchange rates derivatives whenever it is deemed that the underlying transaction is expected to occur in future
reporting periods.
Correspondently,
special charges/gains also include the evaluation effects relating to assets/liabilities utilized in a natural hedge relation
to offset a market risk, as in the case of accrued currency differences at finance debt denominated in a currency other than the
reporting currency, where the cash outflows for the reimbursement are matched by highly probable cash inflows in the same currency.
The deferral of both the unrealized portion of fair-valued commodity and other derivatives and evaluation effects are reversed
to future reporting periods when the underlying transaction occurs.
As provided
for in Decision No. 15519 of July 27, 2006 of the Italian market regulator (CONSOB), non-recurring material income or charges
are to be clearly reported in the management’s discussion and financial tables.
Leverage
Leverage
is a Non-GAAP measure of the Company’s financial condition, calculated as the ratio between net borrowings and shareholders’
equity, including non-controlling interest. Leverage is the reference ratio to assess the solidity and efficiency of the Group
balance sheet in terms of incidence of funding sources including third-party funding and equity as well as to carry out benchmark
analysis with industry standards.
Gearing
Gearing is
calculated as the ratio between net borrowings and capital employed net and measures how much of capital employed net is financed
recurring to third-party funding.
Adjusted net cash before
changes in working capital at replacement cost
Adjusted
net cash is defined as net cash provided from operating activities before changes in working capital at replacement cost and excluding
certain non-recurring charges such as extraordinary credit allowances and, from the third quarter 2020, considering the high market
volatility, changes in the fair value of commodity derivatives lacking the formal criteria to be designed as hedges, including
derivatives which were not eligible for the own use exemption, the ineffective portion of cash flow hedges, as well as the effects
of certain settled commodity derivatives whenever it is deemed that the underlying transaction is expected to occur in future
reporting periods.
Free cash flow
Free
cash flow represents the link existing between changes in cash and cash equivalents (deriving from the statutory cash flows
statement) and in net borrowings (deriving from the summarized cash flow statement) that occurred from the beginning of the
period to the end of period. Free cash flow is the cash in excess of capital expenditure needs. Starting from free cash flow
it is possible to determine either: (i) changes in cash and cash equivalents for the period by adding/deducting cash flows
relating to financing debts/receivables (issuance/repayment of debt and receivables related to financing activities),
shareholders’ equity (dividends paid, net repurchase of own shares, capital issuance) and the effect of changes in
consolidation and of exchange rate differences; (ii) changes in net borrowings for the period by adding/deducting cash flows
relating to shareholders’ equity and the effect of changes in consolidation and of exchange rate
differences.
Net borrowings
Net
borrowings is calculated as total finance debt less cash, cash equivalents and certain very liquid investments not related to
operations, including among others non-operating financing receivables. Financial activities are qualified as “not
related to operations” when these are not strictly related to the business operations.
Reconciliation
tables of Non-GAAP results to the most comparable measures of financial performance determined in accordance to GAAPs
(€
million)
|
|
|
|
|
|
|
|
|
Third Quarter
2020
|
Exploration
& Production
|
Global
Gas & LNG Portfolio
|
Refining
& Marketing and Chemicals
|
Eni
gas e luce, Power, Renewables
|
Corporate
and other activities
|
Impact
of unrealized
intragroup profit
elimination
|
|
GROUP
|
Reported
operating profit (loss)
|
514
|
(205)
|
(22)
|
43
|
(111)
|
1
|
|
220
|
Exclusion
of inventory holding (gains) losses
|
|
|
30
|
|
|
(37)
|
|
(7)
|
Exclusion
of special items:
|
|
|
|
|
|
|
|
|
environmental
charges
|
|
|
13
|
|
|
|
|
13
|
impairment
losses (impairment reversals), net
|
(24)
|
|
14
|
(1)
|
7
|
|
|
(4)
|
net gains on disposal
of assets
|
|
|
(2)
|
|
|
|
|
(2)
|
risk
provisions
|
22
|
|
|
|
4
|
|
|
26
|
provision
for redundancy incentives
|
7
|
1
|
4
|
26
|
15
|
|
|
53
|
commodity derivatives
|
|
318
|
(27)
|
(14)
|
|
|
|
277
|
exchange rate differences
and derivatives
|
7
|
(93)
|
(1)
|
3
|
|
|
|
(84)
|
other
|
(11)
|
43
|
12
|
|
1
|
|
|
45
|
Special
items of operating profit (loss)
|
1
|
269
|
13
|
14
|
27
|
|
|
324
|
Adjusted
operating profit (loss)
|
515
|
64
|
21
|
57
|
(84)
|
(36)
|
|
537
|
Net finance (expense) income
(a)
|
(102)
|
|
1
|
|
(88)
|
|
|
(189)
|
Net income (expense) from investments (a)
|
58
|
2
|
(61)
|
(3)
|
(23)
|
|
|
(27)
|
Income taxes (a)
|
(402)
|
(3)
|
(18)
|
(15)
|
(44)
|
10
|
|
(472)
|
Tax
rate (%)
|
|
|
|
|
|
|
|
147.0
|
Adjusted
net profit (loss)
|
69
|
63
|
(57)
|
39
|
(239)
|
(26)
|
|
(151)
|
of
which:
|
|
|
|
|
|
|
|
|
-
Adjusted net profit (loss) of non-controlling interest
|
|
|
|
|
|
|
|
2
|
-
Adjusted net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(153)
|
Reported
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(503)
|
Exclusion
of inventory holding (gains) losses
|
|
|
|
|
|
|
|
(5)
|
Exclusion
of special items
|
|
|
|
|
|
|
|
355
|
Adjusted
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(153)
|
(a) Excluding special items.
|
(€
million)
|
|
|
|
|
|
|
|
|
Third Quarter 2019
|
Exploration
& Production
|
Global
Gas & LNG Portfolio
|
Refining
& Marketing and Chemicals
|
Eni
gas e luce, Power, Renewables
|
Corporate
and other activities
|
Impact
of unrealized
intragroup profit
elimination
|
|
GROUP
|
Reported
operating profit (loss)
|
2,162
|
(80)
|
(8)
|
(9)
|
(153)
|
(51)
|
|
1,861
|
Exclusion
of inventory holding (gains) losses
|
|
|
129
|
|
|
(20)
|
|
109
|
Exclusion
of special items:
|
|
|
|
|
|
|
|
|
environmental
charges
|
|
|
35
|
|
41
|
|
|
76
|
impairment
losses (impairment reversals), net
|
4
|
|
28
|
|
1
|
|
|
33
|
net gains on disposal
of assets
|
(1)
|
|
|
|
|
|
|
(1)
|
risk
provisions
|
2
|
|
(20)
|
|
23
|
|
|
5
|
provision
for redundancy incentives
|
6
|
|
7
|
1
|
2
|
|
|
16
|
commodity derivatives
|
|
(5)
|
(55)
|
31
|
|
|
|
(29)
|
exchange rate differences
and derivatives
|
|
105
|
(11)
|
(8)
|
|
|
|
86
|
other
|
(32)
|
49
|
44
|
|
(58)
|
|
|
3
|
Special
items of operating profit (loss)
|
(21)
|
149
|
28
|
24
|
9
|
|
|
189
|
Adjusted
operating profit (loss)
|
2,141
|
69
|
149
|
15
|
(144)
|
(71)
|
|
2,159
|
Net finance (expense) income (a)
|
(119)
|
|
(18)
|
|
(49)
|
|
|
(186)
|
Net income (expense) from investments (a)
|
50
|
(17)
|
2
|
(1)
|
8
|
|
|
42
|
Income taxes (a)
|
(1,267)
|
(14)
|
(51)
|
(5)
|
75
|
24
|
|
(1,238)
|
Tax
rate (%)
|
|
|
|
|
|
|
|
61.4
|
Adjusted
net profit (loss)
|
805
|
38
|
82
|
9
|
(110)
|
(47)
|
|
777
|
of
which:
|
|
|
|
|
|
|
|
|
-
Adjusted net profit (loss) of non-controlling interest
|
|
|
|
|
|
|
|
1
|
-
Adjusted net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
776
|
Reported
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
523
|
Exclusion
of inventory holding (gains) losses
|
|
|
|
|
|
|
|
77
|
Exclusion
of special items
|
|
|
|
|
|
|
|
176
|
Adjusted
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
776
|
(a) Excluding
special items.
|
(€
million)
|
|
|
|
|
|
|
|
|
Nine months 2020
|
Exploration
& Production
|
Global
Gas & LNG Portfolio
|
Refining
& Marketing and Chemicals
|
Eni
gas e luce, Power, Renewables
|
Corporate
and other activities
|
Impact
of unrealized
intragroup profit
elimination
|
|
GROUP
|
Reported
operating profit (loss)
|
(1,164)
|
(42)
|
(2,324)
|
256
|
(512)
|
231
|
|
(3,555)
|
Exclusion
of inventory holding (gains) losses
|
|
|
1,400
|
|
|
(13)
|
|
1,387
|
Exclusion
of special items:
|
|
|
|
|
|
|
|
|
environmental
charges
|
1
|
|
74
|
|
|
|
|
75
|
impairment
losses (impairment reversals), net
|
1,657
|
|
1,070
|
5
|
13
|
|
|
2,745
|
net gains on disposal
of assets
|
1
|
|
(5)
|
|
(2)
|
|
|
(6)
|
risk
provisions
|
107
|
|
|
|
6
|
|
|
113
|
provision
for redundancy incentives
|
17
|
2
|
9
|
27
|
36
|
|
|
91
|
commodity derivatives
|
|
469
|
(125)
|
45
|
|
|
|
389
|
exchange rate differences
and derivatives
|
7
|
(100)
|
(15)
|
|
|
|
|
(108)
|
other
|
119
|
98
|
26
|
|
36
|
|
|
279
|
Special
items of operating profit (loss)
|
1,909
|
469
|
1,034
|
77
|
89
|
|
|
3,578
|
Adjusted
operating profit (loss)
|
745
|
427
|
110
|
333
|
(423)
|
218
|
|
1,410
|
Net finance (expense) income (a)
|
(271)
|
|
(6)
|
(1)
|
(439)
|
|
|
(717)
|
Net income (expense) from investments (a)
|
101
|
(11)
|
(90)
|
4
|
(69)
|
|
|
(65)
|
Income taxes (a)
|
(1,079)
|
(126)
|
(55)
|
(102)
|
(14)
|
(55)
|
|
(1,431)
|
Tax
rate (%)
|
|
|
|
|
|
|
|
227.9
|
Adjusted
net profit (loss)
|
(504)
|
290
|
(41)
|
234
|
(945)
|
163
|
|
(803)
|
of
which:
|
|
|
|
|
|
|
|
|
-
Adjusted net profit (loss) of non-controlling interest
|
|
|
|
|
|
|
|
5
|
-
Adjusted net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(808)
|
Reported
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(7,838)
|
Exclusion
of inventory holding (gains) losses
|
|
|
|
|
|
|
|
986
|
Exclusion
of special items
|
|
|
|
|
|
|
|
6,044
|
Adjusted
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(808)
|
(a) Excluding special items.
|
(€
million)
|
|
|
|
|
|
|
|
|
Nine months 2019
|
Exploration
& Production
|
Global
Gas & LNG Portfolio
|
Refining
& Marketing and Chemicals
|
Eni
gas e luce, Power, Renewables
|
Corporate
and other activities
|
Impact
of unrealized
intragroup profit
elimination
|
|
GROUP
|
Reported
operating profit (loss)
|
6,587
|
150
|
324
|
99
|
(439)
|
(111)
|
|
6,610
|
Exclusion
of inventory holding (gains) losses
|
|
|
(315)
|
|
|
78
|
|
(237)
|
Exclusion
of special items:
|
|
|
|
|
|
|
|
|
environmental
charges
|
|
|
120
|
|
32
|
|
|
152
|
impairment
losses (impairment reversals), net
|
26
|
|
315
|
|
3
|
|
|
344
|
net gains on disposal
of assets
|
(21)
|
|
(3)
|
|
|
|
|
(24)
|
risk
provisions
|
(10)
|
|
|
|
21
|
|
|
11
|
provision
for redundancy incentives
|
9
|
1
|
8
|
3
|
4
|
|
|
25
|
commodity derivatives
|
|
(256)
|
(109)
|
125
|
|
|
|
(240)
|
exchange rate differences
and derivatives
|
6
|
158
|
(18)
|
(13)
|
|
|
|
133
|
other
|
(8)
|
186
|
(140)
|
|
(20)
|
|
|
18
|
Special
items of operating profit (loss)
|
2
|
89
|
173
|
115
|
40
|
|
|
419
|
Adjusted
operating profit (loss)
|
6,589
|
239
|
182
|
214
|
(399)
|
(33)
|
|
6,792
|
Net finance (expense) income (a)
|
(322)
|
1
|
(30)
|
|
(380)
|
|
|
(731)
|
Net income (expense) from investments (a)
|
198
|
(24)
|
9
|
7
|
25
|
|
|
215
|
Income taxes (a)
|
(3,857)
|
(66)
|
(91)
|
(66)
|
136
|
3
|
|
(3,941)
|
Tax
rate (%)
|
|
|
|
|
|
|
|
62.8
|
Adjusted
net profit (loss)
|
2,608
|
150
|
70
|
155
|
(618)
|
(30)
|
|
2,335
|
of
which:
|
|
|
|
|
|
|
|
|
-
Adjusted net profit (loss) of non-controlling interest
|
|
|
|
|
|
|
|
5
|
-
Adjusted net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
2,330
|
Reported
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
2,039
|
Exclusion
of inventory holding (gains) losses
|
|
|
|
|
|
|
|
(167)
|
Exclusion
of special items
|
|
|
|
|
|
|
|
458
|
Adjusted
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
2,330
|
(a) Excluding
special items.
|
(€
million)
|
|
|
|
|
|
|
|
|
Second Quarter 2020
|
Exploration
& Production
|
Global
Gas & LNG Portfolio
|
Refining
& Marketing and Chemicals
|
Eni
gas e luce, Power, Renewables
|
Corporate
and other activities
|
Impact
of unrealized
intragroup profit
elimination
|
|
GROUP
|
Reported
operating profit (loss)
|
(2,393)
|
62
|
(392)
|
113
|
(152)
|
82
|
|
(2,680)
|
Exclusion
of inventory holding (gains) losses
|
|
|
(321)
|
|
|
138
|
|
(183)
|
Exclusion
of special items:
|
|
|
|
|
|
|
|
|
environmental
charges
|
1
|
|
46
|
|
|
|
|
47
|
impairment
losses (impairment reversals), net
|
1,484
|
|
917
|
5
|
2
|
|
|
2,408
|
net gains on disposal
of assets
|
|
|
|
|
(2)
|
|
|
(2)
|
risk
provisions
|
58
|
|
|
|
3
|
|
|
61
|
provision
for redundancy incentives
|
5
|
|
2
|
|
9
|
|
|
16
|
commodity derivatives
|
|
59
|
(183)
|
(33)
|
|
|
|
(157)
|
exchange rate differences
and derivatives
|
1
|
(56)
|
(7)
|
|
|
|
|
(62)
|
other
|
37
|
65
|
11
|
|
5
|
|
|
118
|
Special
items of operating profit (loss)
|
1,586
|
68
|
786
|
(28)
|
17
|
|
|
2,429
|
Adjusted
operating profit (loss)
|
(807)
|
130
|
73
|
85
|
(135)
|
220
|
|
(434)
|
Net finance (expense) income (a)
|
(54)
|
|
1
|
(1)
|
(14)
|
|
|
(68)
|
Net income (expense) from investments (a)
|
102
|
(4)
|
(19)
|
(1)
|
(43)
|
|
|
35
|
Income taxes (a)
|
(26)
|
(71)
|
25
|
(27)
|
(91)
|
(56)
|
|
(246)
|
Tax
rate (%)
|
|
|
|
|
|
|
|
(52.7)
|
Adjusted
net profit (loss)
|
(785)
|
55
|
80
|
56
|
(283)
|
164
|
|
(713)
|
of
which:
|
|
|
|
|
|
|
|
|
-
Adjusted net profit (loss) of non-controlling interest
|
|
|
|
|
|
|
|
1
|
-
Adjusted net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(714)
|
Reported
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(4,406)
|
Exclusion
of inventory holding (gains) losses
|
|
|
|
|
|
|
|
(127)
|
Exclusion
of special items
|
|
|
|
|
|
|
|
3,819
|
Adjusted
net profit (loss) attributable to Eni's shareholders
|
|
|
|
|
|
|
|
(714)
|
(a) Excluding special items.
|
Breakdown of special items
IIQ
|
|
IIIQ
|
Nine months
|
2020
|
(€
million)
|
2020
|
2019
|
2020
|
2019
|
47
|
Environmental charges
|
13
|
76
|
75
|
152
|
2,408
|
Impairment losses (impairment reversals), net
|
(4)
|
33
|
2,745
|
344
|
(2)
|
Net gains on disposal of assets
|
(2)
|
(1)
|
(6)
|
(24)
|
61
|
Risk provisions
|
26
|
5
|
113
|
11
|
16
|
Provisions for redundancy incentives
|
53
|
16
|
91
|
25
|
(157)
|
Commodity derivatives
|
277
|
(29)
|
389
|
(240)
|
(62)
|
Exchange rate differences and derivatives
|
(84)
|
86
|
(108)
|
133
|
118
|
Other
|
45
|
3
|
279
|
18
|
2,429
|
Special
items of operating profit (loss)
|
324
|
189
|
3,578
|
419
|
50
|
Net finance
(income) expense
|
86
|
(86)
|
84
|
(79)
|
|
of which:
|
|
|
|
|
62
|
- exchange rate differences
and derivatives reclassified to operating profit (loss)
|
84
|
(86)
|
108
|
(133)
|
524
|
Net income
(expense) from investments
|
(85)
|
(31)
|
1,256
|
(4)
|
|
of which:
|
|
|
|
|
299
|
- impairment/revaluation
of equity investments
|
(57)
|
|
837
|
|
816
|
Income taxes
|
30
|
104
|
1,126
|
122
|
3,819
|
Total special
items of net profit (loss)
|
355
|
176
|
6,044
|
458
|
Analysis
of Profit and Loss account items
|
|
Sales from operations
IIQ
|
|
IIIQ
|
|
Nine months
|
|
2020
|
(€
million)
|
2020
|
2019
|
%
Ch.
|
2020
|
2019
|
%
Ch.
|
2,557
|
Exploration & Production
|
3,344
|
5,908
|
(43)
|
10,095
|
17,432
|
(42)
|
1,140
|
Global Gas & LNG Portfolio
|
1,233
|
2,156
|
(43)
|
4,853
|
9,343
|
(48)
|
4,698
|
Refining & Marketing and Chemicals
|
6,635
|
10,962
|
(39)
|
18,783
|
32,641
|
(42)
|
1,298
|
EGL, Power, Renewables
|
1,467
|
1,452
|
1
|
5,414
|
6,201
|
(13)
|
365
|
Corporate and other activities
|
365
|
423
|
(14)
|
1,113
|
1,187
|
(6)
|
(1,901)
|
Consolidation adjustments
|
(2,718)
|
(4,215)
|
|
(7,902)
|
(13,138)
|
|
8,157
|
|
10,326
|
16,686
|
(38)
|
32,356
|
53,666
|
(40)
|
Operating expenses
IIQ
|
|
IIIQ
|
|
Nine months
|
|
2020
|
(€
million)
|
2020
|
2019
|
%
Ch.
|
2020
|
2019
|
%
Ch.
|
5,517
|
Purchases, services and other
|
7,531
|
12,183
|
(38)
|
24,717
|
38,974
|
(37)
|
139
|
Impairment losses (impairment reversals) of
trade and other receivables, net
|
3
|
102
|
(97)
|
214
|
348
|
(39)
|
704
|
Payroll and related costs
|
677
|
705
|
(4)
|
2,219
|
2,258
|
(2)
|
16
|
of which: provision
for redundancy incentives and other
|
53
|
16
|
|
91
|
25
|
|
6,360
|
|
8,211
|
12,990
|
(37)
|
27,150
|
41,580
|
(35)
|
DD&A, impairments, reversals and write-off
IIQ
|
|
IIIQ
|
|
Nine months
|
|
2020
|
(€
million)
|
2020
|
2019
|
%
Ch.
|
2020
|
2019
|
%
Ch.
|
1,716
|
Exploration & Production
|
1,529
|
1,805
|
(15)
|
4,866
|
5,119
|
(5)
|
31
|
Global Gas & LNG Portfolio
|
31
|
34
|
(9)
|
94
|
94
|
|
149
|
Refining & Marketing and Chemicals
|
135
|
152
|
(11)
|
433
|
457
|
(5)
|
52
|
EGL, Power, Renewables
|
54
|
47
|
15
|
156
|
137
|
14
|
37
|
Corporate and other activities
|
36
|
37
|
(3)
|
109
|
110
|
(1)
|
(8)
|
Impact of unrealized intragroup profit elimination
|
(8)
|
(8)
|
|
(24)
|
(24)
|
|
1,977
|
Total depreciation, depletion
and
amortization
|
1,777
|
2,067
|
(14)
|
5,634
|
5,893
|
(4)
|
2,408
|
Impairment
losses (impairment reversals) of tangible and intangible and right of use assets, net
|
(4)
|
33
|
..
|
2,745
|
344
|
..
|
4,385
|
Depreciation,
depletion, amortization, impairments and reversals
|
1,773
|
2,100
|
(16)
|
8,379
|
6,237
|
34
|
229
|
Write-off of tangible and
intangible assets
|
(36)
|
2
|
..
|
311
|
180
|
73
|
4,614
|
|
1,737
|
2,102
|
(17)
|
8,690
|
6,417
|
35
|
Income (expense) from investments
(€
million)
|
|
|
|
|
|
|
Nine
months 2020
|
Exploration
&
Production
|
Global Gas
& LNG Portfolio
|
Refining
&
Marketing and Chemicals
|
EGL, Power,
Renewables
|
Corporate
and other activities
|
Group
|
Share of profit (loss) from equity-accounted investments
|
(684)
|
(11)
|
(367)
|
4
|
(320)
|
(1,378)
|
Dividends
|
73
|
|
31
|
|
|
104
|
Other income (expense), net
|
|
(30)
|
(17)
|
|
|
(47)
|
|
(611)
|
(41)
|
(353)
|
4
|
(320)
|
(1,321)
|
Leverage
and net borrowings
|
Leverage is a measure used by management
to assess the Company’s level of indebtedness. It is calculated as a ratio of net borrowings to shareholders’ equity,
including non-controlling interest. Management periodically reviews leverage in order to assess the soundness and efficiency of
the Group balance sheet in terms of optimal mix between net borrowings and net equity, and to carry out benchmark analysis with
industry standards.
Jun.
30, 2020
|
|
(€
million)
|
Sept.
30, 2020
|
Dec.
31, 2019
|
Change
|
27,388
|
|
Total debt
|
27,365
|
24,518
|
2,847
|
4,642
|
|
- Short-term
debt
|
4,209
|
5,608
|
(1,399)
|
22,746
|
|
- Long-term
debt
|
23,156
|
18,910
|
4,246
|
(6,527)
|
|
Cash and cash equivalents
|
(6,879)
|
(5,994)
|
(885)
|
(6,042)
|
|
Securities held for trading
|
(5,611)
|
(6,760)
|
1,149
|
(490)
|
|
Financing receivables held for non-operating purposes
|
(350)
|
(287)
|
(63)
|
14,329
|
|
Net borrowings before lease
liabilities ex IFRS 16
|
14,525
|
11,477
|
3,048
|
5,642
|
|
Lease Liabilities
|
5,328
|
5,648
|
(320)
|
3,766
|
|
- of which Eni working interest
|
3,588
|
3,672
|
(84)
|
1,876
|
|
- of which Joint operators' working interest
|
1,740
|
1,976
|
(236)
|
19,971
|
|
Net borrowings after lease liabilities
ex IFRS 16
|
19,853
|
17,125
|
2,728
|
38,839
|
|
Shareholders' equity including non-controlling
interest
|
36,533
|
47,900
|
(11,367)
|
0.37
|
|
Leverage before lease liability
ex IFRS 16
|
0.40
|
0.24
|
0.16
|
0.51
|
|
Leverage
after lease liability ex IFRS 16
|
0.54
|
0.36
|
0.18
|
Pro-forma leverage
(€
million)
|
Reported
measure
|
Lease
liabilities of
Joint operators'
working interest
|
Pro-forma
measure
|
Net borrowings after
lease liabilities ex IFRS 16
|
19,853
|
1,740
|
18,113
|
|
|
|
|
Shareholders' equity
including non-controlling interest
|
36,533
|
|
36,533
|
|
|
|
|
Pro-forma
leverage
|
0.54
|
|
0.50
|
Pro-forma
leverage is net of followers’ lease liabilities which are recovered through a cash call mechanism.
Net borrowings
are calculated under CONSOB provisions on Net Financial Position (Com. no. DEM/6064293 of 2006).
Consolidated
financial statements
|
BALANCE SHEET
(€ million)
|
|
|
|
Sept.
30, 2020
|
Dec.
31, 2019
|
ASSETS
|
|
|
Current assets
|
|
|
Cash and cash equivalents
|
6,879
|
5,994
|
Other financial activities held for trading
|
5,611
|
6,760
|
Other financial assets
|
424
|
384
|
Trade and other receivables
|
10,763
|
12,873
|
Inventories
|
4,031
|
4,734
|
Income tax assets
|
202
|
192
|
Other assets
|
2,473
|
3,972
|
|
30,383
|
34,909
|
Non-current assets
|
|
|
Property, plant and equipment
|
55,726
|
62,192
|
Right of use assets
|
4,950
|
5,349
|
Intangible assets
|
3,025
|
3,059
|
Inventory - compulsory stock
|
914
|
1,371
|
Equity-accounted investments
|
7,226
|
9,035
|
Other investments
|
904
|
929
|
Other financial assets
|
1,219
|
1,174
|
Deferred tax assets
|
4,588
|
4,360
|
Income tax assets
|
169
|
173
|
Other assets
|
980
|
871
|
|
79,701
|
88,513
|
Assets held for sale
|
18
|
18
|
TOTAL ASSETS
|
110,102
|
123,440
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
Current liabilities
|
|
|
Short-term debt
|
3,003
|
2,452
|
Current portion of long-term debt
|
1,206
|
3,156
|
Current portion of long-term lease liabilities
|
856
|
889
|
Trade and other payables
|
12,054
|
15,545
|
Income taxes payable
|
301
|
456
|
Other liabilities
|
6,115
|
7,146
|
|
23,535
|
29,644
|
Non-current liabilities
|
|
|
Long-term debt
|
23,156
|
18,910
|
Long-term lease liabilities
|
4,472
|
4,759
|
Provisions for contingencies
|
13,225
|
14,106
|
Provisions for employee benefits
|
1,109
|
1,136
|
Deferred tax liabilities
|
5,955
|
4,920
|
Income taxes payable
|
456
|
454
|
Other liabilities
|
1,661
|
1,611
|
|
50,034
|
45,896
|
Liabilities directly associated
with assets held for sale
|
|
|
TOTAL LIABILITIES
|
73,569
|
75,540
|
SHAREHOLDERS' EQUITY
|
|
|
Non-controlling interest
|
73
|
61
|
Eni shareholders' equity:
|
|
|
Share capital
|
4,005
|
4,005
|
Retained earnings
|
34,478
|
37,436
|
Cumulative currency translation differences
|
5,403
|
7,209
|
Other reserves
|
1,422
|
1,564
|
Treasury shares
|
(581)
|
(981)
|
Interim dividend
|
(429)
|
(1,542)
|
Net profit (loss)
|
(7,838)
|
148
|
Total Eni shareholders'
equity
|
36,460
|
47,839
|
TOTAL SHAREHOLDERS'
EQUITY
|
36,533
|
47,900
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
110,102
|
123,440
|
GROUP PROFIT AND LOSS ACCOUNT
IIQ
|
|
IIIQ
|
Nine months
|
2020
|
(€
million)
|
2020
|
2019
|
2020
|
2019
|
|
REVENUES
|
|
|
|
|
8,157
|
Sales from operations
|
10,326
|
16,686
|
32,356
|
53,666
|
247
|
Other income and revenues
|
194
|
275
|
654
|
919
|
8,404
|
Total
revenues
|
10,520
|
16,961
|
33,010
|
54,585
|
|
OPERATING EXPENSES
|
|
|
|
|
(5,517)
|
Purchases, services and other
|
(7,531)
|
(12,183)
|
(24,717)
|
(38,974)
|
(139)
|
Impairment reversals (impairment losses) of
trade and other receivables, net
|
(3)
|
(102)
|
(214)
|
(348)
|
(704)
|
Payroll and related costs
|
(677)
|
(705)
|
(2,219)
|
(2,258)
|
(110)
|
Other
operating (expense) income
|
(352)
|
(8)
|
(725)
|
22
|
(1,977)
|
Depreciation, Depletion
and Amortization
|
(1,777)
|
(2,067)
|
(5,634)
|
(5,893)
|
(2,408)
|
Impairment reversals (impairment
losses) of tangible and intangible and right of use assets, net
|
4
|
(33)
|
(2,745)
|
(344)
|
(229)
|
Write-off of tangible and
intangible assets
|
36
|
(2)
|
(311)
|
(180)
|
(2,680)
|
OPERATING
PROFIT (LOSS)
|
220
|
1,861
|
(3,555)
|
6,610
|
|
FINANCE INCOME (EXPENSE)
|
|
|
|
|
808
|
Finance income
|
1,023
|
1,005
|
3,176
|
2,425
|
(1,078)
|
Finance expense
|
(1,505)
|
(1,085)
|
(4,101)
|
(3,114)
|
92
|
Net finance income (expense) from financial
assets held for trading
|
25
|
43
|
18
|
121
|
60
|
Derivative financial instruments
|
182
|
(63)
|
106
|
(84)
|
(118)
|
|
(275)
|
(100)
|
(801)
|
(652)
|
|
INCOME
(EXPENSE) FROM INVESTMENTS
|
|
|
|
|
(528)
|
Share of profit (loss) of equity-accounted
investments
|
26
|
3
|
(1,378)
|
55
|
39
|
Other gain (loss) from investments
|
32
|
70
|
57
|
164
|
(489)
|
|
58
|
73
|
(1,321)
|
219
|
(3,287)
|
PROFIT
(LOSS) BEFORE INCOME TAXES
|
3
|
1,834
|
(5,677)
|
6,177
|
(1,118)
|
Income taxes
|
(504)
|
(1,310)
|
(2,156)
|
(4,133)
|
(4,405)
|
Net
profit (loss)
|
(501)
|
524
|
(7,833)
|
2,044
|
|
attributable to:
|
|
|
|
|
(4,406)
|
-
Eni's shareholders
|
(503)
|
523
|
(7,838)
|
2,039
|
1
|
-
Non-controlling interest
|
2
|
1
|
5
|
5
|
|
|
|
|
|
|
|
Net
profit (loss) per share attributable
to Eni's shareholders (€ per share)
|
|
|
|
|
(1.23)
|
- basic
|
(0.14)
|
0.15
|
(2.19)
|
0.57
|
(1.23)
|
- diluted
|
(0.14)
|
0.15
|
(2.19)
|
0.57
|
|
Weighted
average number of shares outstanding (million)
|
|
|
|
|
3,572.5
|
- basic
|
3,572.5
|
3,590.5
|
3,572.5
|
3,597.4
|
3,574.8
|
- diluted
|
3,575.4
|
3,593.3
|
3,575.4
|
3,600.1
|
COMPREHENSIVE INCOME (LOSS)
|
IIIQ
|
Nine months
|
(€
million)
|
2020
|
2019
|
2020
|
2019
|
Net
profit (loss)
|
(501)
|
524
|
(7,833)
|
2,044
|
Items
that are not reclassified to profit or loss in later periods
|
|
|
8
|
|
Change in the fair value
of interests with effects on other comprehensive income
|
|
|
8
|
|
Items
that may be reclassified to profit in later periods
|
(1,363)
|
1,638
|
(1,569)
|
1,562
|
Currency translation differences
|
(1,642)
|
1,481
|
(1,806)
|
1,801
|
Change in the fair value
of cash flow hedging derivatives
|
394
|
246
|
271
|
(318)
|
Share of other comprehensive
income on equity-accounted entities
|
|
(18)
|
46
|
(13)
|
Taxation
|
(115)
|
(71)
|
(80)
|
92
|
Total other
items of comprehensive income (loss)
|
(1,363)
|
1,638
|
(1,561)
|
1,562
|
Total comprehensive
income (loss)
|
(1,864)
|
2,162
|
(9,394)
|
3,606
|
attributable to:
|
|
|
|
|
-
Eni's shareholders
|
(1,866)
|
2,161
|
(9,399)
|
3,601
|
- Non-controlling interest
|
2
|
1
|
5
|
5
|
CHANGES IN SHAREHOLDERS’ EQUITY
(€
million)
|
|
|
|
Shareholders'
equity at January 1, 2019
|
|
|
51,069
|
Total comprehensive income (loss)
|
|
3,606
|
|
Dividends paid to Eni's shareholders
|
|
(3,018)
|
|
Dividends distributed by consolidated subsidiaries
|
|
(3)
|
|
Buy-back program
|
|
(229)
|
|
Reimbursement to third party shareholders
|
|
(1)
|
|
Other changes
|
|
47
|
|
Total
changes
|
|
|
402
|
Shareholders'
equity at September 30, 2019
|
|
|
51,471
|
attributable to:
|
|
|
|
-
Eni's shareholders
|
|
|
51,413
|
- Non-controlling interest
|
|
|
58
|
|
|
|
|
Shareholders'
equity at December 31, 2019
|
|
|
47,900
|
Total comprehensive income (loss)
|
|
(9,394)
|
|
Dividends paid to Eni's shareholders
|
|
(1,965)
|
|
Dividends distributed by consolidated subsidiaries
|
|
(3)
|
|
Other changes
|
|
(5)
|
|
Total changes
|
|
|
(11,367)
|
Shareholders'
equity at September 30, 2020
|
|
|
36,533
|
attributable to:
|
|
|
|
-
Eni's shareholders
|
|
|
36,460
|
- Non-controlling interest
|
|
|
73
|
GROUP CASH FLOW STATEMENT
IIQ
|
|
IIIQ
|
Nine months
|
2020
|
(€
million)
|
2020
|
2019
|
2020
|
2019
|
(4,405)
|
Net profit
(loss)
|
(501)
|
524
|
(7,833)
|
2,044
|
|
Adjustments
to reconcile net profit (loss) to net cash provided by operating activities:
|
|
|
|
|
1,977
|
Depreciation, depletion and amortization
|
1,777
|
2,067
|
5,634
|
5,893
|
2,408
|
Impairment losses (impairment reversals)
of tangible, intangible and right of use, net
|
(4)
|
33
|
2,745
|
344
|
229
|
Write-off of tangible and intangible assets
|
(36)
|
2
|
311
|
180
|
528
|
Share of (profit) loss of equity-accounted
investments
|
(26)
|
(3)
|
1,378
|
(55)
|
(1)
|
Gains on disposal of assets, net
|
(2)
|
(18)
|
(6)
|
(44)
|
(56)
|
Dividend income
|
(32)
|
(54)
|
(104)
|
(143)
|
(44)
|
Interest income
|
(24)
|
(37)
|
(96)
|
(109)
|
227
|
Interest expense
|
210
|
264
|
668
|
785
|
1,118
|
Income taxes
|
504
|
1,310
|
2,156
|
4,133
|
(161)
|
Other changes
|
171
|
(91)
|
93
|
(105)
|
|
Changes in working capital:
|
|
|
|
|
(716)
|
- inventories
|
17
|
52
|
1,078
|
(50)
|
1,791
|
- trade receivables
|
(523)
|
796
|
1,493
|
927
|
(981)
|
- trade payables
|
(86)
|
(1,028)
|
(2,691)
|
(1,901)
|
(303)
|
- provisions for contingencies
|
(77)
|
(30)
|
(476)
|
(60)
|
212
|
- other assets and liabilities
|
595
|
(228)
|
1,210
|
112
|
3
|
Cash flow from changes
in working capital
|
(74)
|
(438)
|
614
|
(972)
|
(11)
|
Net change in the provisions for employee benefits
|
(22)
|
(46)
|
4
|
(11)
|
172
|
Dividends received
|
85
|
72
|
413
|
1,227
|
10
|
Interest received
|
(1)
|
37
|
32
|
69
|
(257)
|
Interest paid
|
(217)
|
(347)
|
(751)
|
(833)
|
(334)
|
Income taxes paid, net of tax receivables received
|
(352)
|
(1,220)
|
(1,424)
|
(3,736)
|
1,403
|
Net cash
provided by operating activities
|
1,456
|
2,055
|
3,834
|
8,667
|
|
Investing activities:
|
|
|
|
|
(940)
|
- tangible assets and prepaid right of use
|
(839)
|
(1,836)
|
(3,308)
|
(5,945)
|
(38)
|
- intangible assets
|
(50)
|
(63)
|
(149)
|
(190)
|
(10)
|
- consolidated subsidiaries and businesses
net of cash and cash equivalent acquired
|
|
|
(109)
|
|
(32)
|
- investments
|
(95)
|
(2,931)
|
(250)
|
(2,982)
|
(9)
|
- securities held for operating purposes
|
|
|
(15)
|
(8)
|
(41)
|
- financing receivables held for operating
purposes
|
(29)
|
(57)
|
(114)
|
(144)
|
(275)
|
- change in payables in relation to investing
activities
|
(332)
|
(90)
|
(702)
|
(110)
|
(1,345)
|
Cash flow from investing
activities
|
(1,345)
|
(4,977)
|
(4,647)
|
(9,379)
|
|
Disposals:
|
|
|
|
|
11
|
- tangible assets
|
1
|
2
|
16
|
28
|
|
- intangible assets
|
|
1
|
|
1
|
|
- consolidated subsidiaries and businesses
net of cash and cash equivalent disposed of
|
|
187
|
|
187
|
|
- tax on disposals
|
|
(3)
|
|
(3)
|
2
|
- investments
|
|
5
|
6
|
17
|
2
|
- securities held for operating purposes
|
3
|
|
15
|
5
|
23
|
- financing receivables held for operating
purposes
|
19
|
31
|
84
|
87
|
|
- change in receivables in relation to disposals
|
|
(1)
|
|
94
|
38
|
Cash flow from disposals
|
23
|
222
|
121
|
416
|
1,198
|
Net change in receivables
and securities not held for operating purposes
|
507
|
(31)
|
970
|
(153)
|
(109)
|
Net cash
used in investing activities
|
(815)
|
(4,786)
|
(3,556)
|
(9,116)
|
GROUP CASH FLOW STATEMENT (continued)
IIQ
|
|
IIIQ
|
Nine months
|
2020
|
(€
million)
|
2020
|
2019
|
2020
|
2019
|
3,293
|
Increase in long-term debt
|
840
|
22
|
5,132
|
1,043
|
(1,081)
|
Repayments of long-term debt
|
(505)
|
(1,560)
|
(2,621)
|
(3,296)
|
(213)
|
Repayment of lease liabilities
|
(214)
|
(255)
|
(676)
|
(652)
|
1,147
|
Increase (decrease) in short-term financial
debt
|
37
|
106
|
768
|
158
|
3,146
|
|
158
|
(1,687)
|
2,603
|
(2,747)
|
|
Net capital reimbursement to non-controlling
interest
|
|
|
|
(1)
|
(1,534)
|
Dividends paid to Eni's shareholders
|
(423)
|
(1,543)
|
(1,957)
|
(3,018)
|
(3)
|
Dividends paid to non-controlling interests
|
|
|
(3)
|
(3)
|
|
Net purchase of treasury shares
|
|
(176)
|
|
(222)
|
1,609
|
Net cash
used in financing activities
|
(265)
|
(3,406)
|
643
|
(5,991)
|
1
|
Effect of change in consolidation (inclusion/exclusion
of significant/insignificant subsidiaries)
|
|
(6)
|
1
|
(7)
|
(18)
|
Effect of exchange rate changes on cash and
cash equivalents and other changes
|
(24)
|
22
|
(37)
|
25
|
2,886
|
Net increase
(decrease) in cash and cash equivalent
|
352
|
(6,121)
|
885
|
(6,422)
|
3,641
|
Cash
and cash equivalents - beginning of the period
|
6,527
|
10,554
|
5,994
|
10,855
|
6,527
|
Cash and
cash equivalents - end of the period
|
6,879
|
4,433
|
6,879
|
4,433
|
SUPPLEMENTAL INFORMATION
IIQ
|
|
IIIQ
|
Nine months
|
2020
|
(€
million)
|
2020
|
2019
|
2020
|
2019
|
|
Investment of consolidated
subsidiaries and businesses
|
|
|
|
|
1
|
Current assets
|
|
|
15
|
|
11
|
Non-current assets
|
|
|
182
|
|
(1)
|
Cash and cash equivalents (net borrowings)
|
|
|
(64)
|
|
(2)
|
Current and non-current liabilities
|
|
|
(11)
|
|
9
|
Net effect
of investments
|
|
|
122
|
|
1
|
Non-controlling interest
|
|
|
(10)
|
|
10
|
Purchase
price
|
|
|
112
|
|
|
less:
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
(3)
|
|
10
|
Investment
of consolidated subsidiaries and businesses net of cash and cash equivalent acquired
|
|
|
109
|
|
|
|
|
|
|
|
|
Disposal of consolidated
subsidiaries and businesses
|
|
|
|
|
|
Current assets
|
|
77
|
|
77
|
|
Non-current assets
|
|
188
|
|
188
|
|
Cash and cash equivalents (net borrowings)
|
|
11
|
|
11
|
|
Current and non-current liabilities
|
|
(57)
|
|
(57)
|
|
Net effect
of disposals
|
|
219
|
|
219
|
|
Reclassification of
exchange rate differences included in other comprehensive income
|
|
(24)
|
|
(24)
|
|
Gain (loss) on disposal
|
|
16
|
|
16
|
|
Selling
price
|
|
211
|
|
211
|
|
less:
|
|
|
|
|
|
Cash and cash equivalents disposed of
|
|
(24)
|
|
(24)
|
|
Disposal
of consolidated subsidiaries and businesses net of cash and cash equivalent divested
|
|
187
|
|
187
|
Capital expenditure
IIQ
|
|
IIIQ
|
|
Nine months
|
|
2020
|
(€
million)
|
2020
|
2019
|
%
Ch.
|
2020
|
2019
|
%
Ch.
|
760
|
Exploration & Production
|
673
|
1,559
|
(57)
|
2,691
|
5,221
|
(48)
|
|
- acquisition of proved
and unproved properties
|
51
|
24
|
..
|
51
|
396
|
(87)
|
76
|
- exploration
|
27
|
86
|
(69)
|
274
|
399
|
(31)
|
670
|
- development
|
583
|
1,431
|
(59)
|
2,323
|
4,388
|
(47)
|
14
|
- other expenditure
|
12
|
18
|
(33)
|
43
|
38
|
13
|
2
|
Global Gas & LNG Portfolio
|
1
|
4
|
(75)
|
8
|
8
|
|
142
|
Refining & Marketing and Chemicals
|
138
|
231
|
(40)
|
515
|
648
|
(21)
|
105
|
- Refining & Marketing
|
100
|
208
|
(52)
|
374
|
587
|
(36)
|
37
|
- Chemicals
|
38
|
23
|
65
|
141
|
61
|
..
|
70
|
EGL, Power, Renewables
|
63
|
88
|
(28)
|
204
|
221
|
(8)
|
34
|
- EGL
|
41
|
38
|
8
|
121
|
118
|
3
|
16
|
- Power
|
12
|
8
|
50
|
34
|
23
|
48
|
20
|
- Renewables
|
10
|
42
|
(76)
|
49
|
80
|
(39)
|
9
|
Corporate and other activities
|
17
|
21
|
(19)
|
49
|
47
|
4
|
(5)
|
Impact of unrealized intragroup profit elimination
|
(3)
|
(4)
|
|
(10)
|
(10)
|
|
978
|
Capital
expenditure
|
889
|
1,899
|
(53)
|
3,457
|
6,135
|
(44)
|
In the nine
months of 2020, capital expenditure amounted to €3,457 million (€6,135 million in the nine months of 2019), decreasing
by 44% from the same period of the previous year, and mainly related to:
- development
activities (€2,323 million) mainly in Egypt, Indonesia, the United Arab Emirates, Iraq, Italy, Mexico, Mozambique, the United
States and Kazakhstan;
- refining
activity in Italy and outside Italy (€319 million) mainly relating to the reconstruction of the EST conversion plant at the
Sannazzaro refinery, the finalization of the I and II generation biomass treatment plant at the Gela biorefinery, logistic and
storage services, activities to maintain plants’ integrity, as well as HSE initiatives; marketing activity (€55 million)
for regulation compliance and stay-in-business initiatives in the retail network in Italy and in the rest of Europe;
- initiatives
relating to gas and power marketing in the retail business (€121 million).
Exploration & Production
PRODUCTION
OF OIL AND NATURAL GAS BY REGION
IIQ
|
|
|
IIIQ
|
Nine months
|
2020
|
|
|
2020
|
2019
|
2020
|
2019
|
1,729
|
Production
of oil and natural gas (a)(b)(c)
|
(kboe/d)
|
1,701
|
1,888
|
1,740
|
1,854
|
106
|
Italy
|
|
105
|
120
|
108
|
124
|
243
|
Rest of Europe
|
|
224
|
146
|
241
|
154
|
258
|
North Africa
|
|
253
|
372
|
254
|
378
|
266
|
Egypt
|
|
290
|
369
|
286
|
351
|
386
|
Sub-Saharan Africa
|
|
369
|
395
|
376
|
386
|
167
|
Kazakhstan
|
|
144
|
169
|
162
|
146
|
173
|
Rest of Asia
|
|
172
|
183
|
179
|
181
|
114
|
Americas
|
|
127
|
106
|
117
|
106
|
16
|
Australia and Oceania
|
|
17
|
28
|
17
|
28
|
144
|
Production
sold (a)(c)
|
(mmboe)
|
143
|
162
|
431
|
464
|
PRODUCTION OF LIQUIDS
BY REGION
IIQ
|
|
|
IIIQ
|
Nine months
|
2020
|
|
|
2020
|
2019
|
2020
|
2019
|
853
|
Production
of liquids
|
(kbbl/d)
|
817
|
893
|
854
|
882
|
45
|
Italy
|
|
47
|
52
|
47
|
53
|
139
|
Rest of Europe
|
|
133
|
86
|
141
|
91
|
118
|
North Africa
|
|
107
|
160
|
114
|
167
|
58
|
Egypt
|
|
64
|
77
|
65
|
74
|
231
|
Sub-Saharan Africa
|
|
217
|
252
|
227
|
257
|
113
|
Kazakhstan
|
|
101
|
118
|
110
|
96
|
88
|
Rest of Asia
|
|
90
|
90
|
90
|
84
|
61
|
Americas
|
|
58
|
56
|
60
|
58
|
|
Australia and Oceania
|
|
|
2
|
|
2
|
PRODUCTION
OF NATURAL GAS BY REGION
IIQ
|
|
|
IIIQ
|
Nine months
|
2020
|
|
|
2020
|
2019
|
2020
|
2019
|
4,653
|
Production
of natural gas
|
(mmcf/d)
|
4,694
|
5,379
|
4,705
|
5,256
|
324
|
Italy
|
|
310
|
364
|
323
|
384
|
550
|
Rest of Europe
|
|
481
|
326
|
532
|
339
|
742
|
North Africa
|
|
772
|
1,144
|
746
|
1,144
|
1,102
|
Egypt
|
|
1,201
|
1,581
|
1,174
|
1,498
|
822
|
Sub-Saharan Africa
|
|
808
|
776
|
790
|
699
|
291
|
Kazakhstan
|
|
232
|
277
|
275
|
267
|
451
|
Rest of Asia
|
|
432
|
506
|
470
|
523
|
285
|
Americas
|
|
367
|
268
|
305
|
264
|
86
|
Australia and Oceania
|
|
91
|
137
|
90
|
138
|
(a) Includes Eni’s share of production of equity-accounted entities.
(b) Includes volumes of hydrocarbons consumed in operation (130 and 136 kboe/d in the third quarter of 2020 and 2019, respectively, 123 and 126 kboe/d in the nine months of 2020 and 2019, respectively, and 116 kboe/d in the second quarter of 2020).
(c) For further information see page 21.