Eni Reassures On Dividend, Gears Up For Investment Cuts
MILAN, Feb 18 (Reuters) – Italy's Eni reassured investors with a small dividend increase on Wednesday and pledged to cut capital spending after lower oil prices depressed fourth quarter profit.
Larger energy companies, including BP and Total , have also said they do not intend to cut their dividends, a key attraction for investors, even if oil prices remain low.
"The dividend is higher than 2013 and there was no scrip dividend which had been a worry. Cash flow was very good despite the oil price," a Milan-based analyst said.
State-controlled Eni will pay an annual dividend of 1.12 euros for 2014, up from 1.10 euros a year ago. Cash flow for the quarter, at a six-year high, was boosted by asset sales including 3.7 billion euros ($4.2 billion) from Arctic Russia.
At 0955 GMT Eni shares were up 2.9 percent while the European oil index was up 1.2 percent.
Eni, which has a dividend yield of 7.1 percent versus a peer average of 5.3 percent, is committed to a "progressive" rise in payouts. However, some analysts have expressed concern lower oil prices and the difficulty in selling assets might challenge the policy.
The Italian major still needs to raise around six billion euros under an 11 billion euro programme to 2017. In December it was forced to pull the sale of part of its stake in oil contractor Saipem due to market conditions.
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