Eni is an integrated company engaged in the energy chain.
Eni’s strong presence in the gas market and in the liquefaction of natural gas, our skills in the power generation and refinery activities, strengthened by world class skills in engineering and project management, allow us to catch opportunities in the market and to realize integrated projects.
In 2011, adjusted net profit was €6.97 billion, up 1.5% from a year ago driven by an excellent performance reported by the Exploration & Production Division on the back of a recovery in crude oil prices. This positive helped the Company withstand the impact of the production shut down in Libya and the sharp contraction in results of the Company’s downstream businesses dragged down by the economic downturn.
Return on Average Capital Employed (ROACE) calculated on an adjusted basis was 9.9%.
Net cash generated by operating activities amounted to €14.38 billion. Proceeds from divestments amounted to €1.9 billion. These inflows enabled the Company to fund the major part of the financing requirements associated with capital expenditure and other investments of €13.8 billion and shareholders’ remuneration.
The ratio of net borrowings to total equity was 0.46 at year end (0.47 at December 31, 2010).
The Board of Directors suggested to the Shareholders’ Meeting the distribution of a dividend of €1.04 per share for 2011 full year.
In 2011, the injury frequency rate decreased by 22% and 15.9% relating to employees and contractors respectively, compared to the previous year. This positive trend progressed for the sixth consecutive year.
In 2011, Eni continued its commitment in incident prevention also by means of training programs on safety and emergency prevention.
In 2011, the Exploration & Production Division reported adjusted net profit amounting to €6.87 billion (up 22.6% from 2010). Liquids and gas production was 1,581 kboe/d, down by 12.9% from 2010, mainly due to a lowered output in Libya. Estimated net proved reserves at December 31, 2011, were 7.09 bboe. All sources reserves replacement ratio was 142%. Excluding price effect, the replacement ratio would be 159%. The reserves life index is 12.3 years (10.3 years in 2010).
In 2011, the Gas & Power Division reported adjusted net profit of €1.54 billion, down 39.8% from 2010 due to a sharply lower operating performance of the Marketing business (adjusted operating profit was down €1.28 billion) negatively impacted by weak domestic demand (down 6%), and mounting competitive pressures fuelled by oversupply which squeezed selling margins and reduced volumes opportunities. The performance was also impacted by the disruption in Libyan gas availability which negatively impacted the supply mix and reduced sales to importers. Sales in Italy were basically stable (up 1.1%) despite declining demand. Sales in target European markets increased by approximately 8%.
In 2011, the Refining & Marketing segment reported adjusted operating loss of €262 million worsening by €213 million from 2010, reflecting unprofitable refining margins due to rising costs for oilbased feedstock and for energy utilities linked to the former that could not be transferred to prices at the pump, also due to weak demand and excess capacity in the Mediterranean basin. Marketing results were positive but shrinking due to the decline in retail and wholesale demand for products and high competitive pressure. Despite a decline in retail sales in Italy (down 3%) Eni’s average retail market share for 2011 was 30.5%, up from 2010 due to commercial initiatives and a strong brand name.
In 2011, the Engineering & Construction sector achieved an adjusted net profit amounting to €1.1 billion and a flow of new orders that allowed to keep its order backlog to a record of over €20 billion.
In 2011, the sector reported a significant increase in adjusted net loss (€208 million, down €123 million) from 2010, due to lower cracker margins and lower sales volumes, in particular of commodity production. Niche business segments of elastomers and styrenes improved their profitability due to their higher technological content.