Eni(US:E)2021-02-20 03:45Financial Data and Key Metrics Changes - Eni reported a stable net debt of €11.6 billion, maintaining cash neutrality despite the challenges posed by COVID-19 [14][8] - The company remains organically free cash flow positive, with a commitment to reduce cash neutrality below $40 per barrel by the end of the plan [58][63] Business Line Data and Key Metrics Changes - In Natural Resources, production was recorded at 1.73 million barrels per day, aligning with post-COVID guidance, and exploration led to the discovery of 400 million barrels of resources [10] - The Renewable segment has 300 megawatts of installed capacity, with plans to develop an additional 700 megawatts through joint ventures in the US and UK [12] - The retail gas and power segment achieved outstanding EBIT results, with plans to expand into the Spanish market and develop new solar plants [13] Market Data and Key Metrics Changes - Eni's global gas and LNG portfolio is now integrated into the Natural Resources business, targeting to contract more than 14 million TPA by 2024 [34] - The company aims to offset more than 6 million tons of CO2 per year by 2024 through various initiatives, increasing to over 20 million tons by 2030 [37] Company Strategy and Development Direction - Eni is committed to becoming carbon neutral by 2050, with a strategy focused on decarbonizing operations and products, diversifying retail and renewable businesses, and increasing resilience against price volatility [3][15] - The merger of renewable and retail businesses aims to leverage a growing customer base and enhance value creation [45][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of COVID-19 on the energy industry and emphasized the importance of rapid adaptation and strategic restructuring [5][6] - The company is focused on technological innovation and digitalization to enhance efficiency and reduce environmental impact [16][17] Other Important Information - Eni plans to invest around €4 billion in transformation processes and €1 billion in innovation over the four-year plan [21][52] - The new shareholder remuneration policy includes a fixed dividend component and a variable component linked to free cash flow [60][63] Q&A Session Questions and Answers Question: Emissions reduction and energy volume assumptions - Management confirmed that absolute emissions are expected to fall faster than carbon intensity, with a lower production profile anticipated [71][73] Question: Biofuel production and feedstock sources - Eni plans to increase second-generation feedstock to 80% by 2024, focusing on non-competitive agricultural sources [76][78] Question: Dividend policy during fluctuating oil prices - The company aims to provide stability in dividends, adjusting based on average prices rather than short-term fluctuations [81][83] Question: Versalis profitability and transformation - Management is focused on transforming Versalis through green chemicals and recycling initiatives to achieve profitability [85][86] Question: Long-term gas production targets - Eni expects to reach peak production in 2025, with a shift towards gas production anticipated by 2030 [90][91] Question: Opportunities from Italy's recovery fund - The recovery fund is seen as an opportunity to accelerate projects related to CCS and biorefineries [92] Question: Update on Mozambique investment decision - The final investment decision for Rovuma LNG is pending cost optimization exercises, with updates expected in 2021 [94]