Eni Raises Dividend as Revenue Outlook Weakens


LONDON, Feb 13 (Reuters) - Italy's Eni said it would increase payouts to investors and reduce spending over the next four years, despite cutting its annual forecast for output growth, falling in behind Europe's other big oil firms on dividends and costs.

To help fund the growing dividend, Eni also flagged a possible further stake sale in huge gas fields it has found off the coast of Mozambique, as it said it would target asset disposals of 9 billion euros ($12.3 billion) over four years.

Like other big oil companies, Eni is facing calls from investors to control spending and return spare cash as they worry about rising costs and returns if oil prices drop.

Italy's biggest listed company said on Thursday it was targeting a dividend of 1.12 euros ($1.52) a share on 2014 earnings - having just lifted it to 1.10 euros in 2013 from 1.08 euros.

Announcing its strategy for 2014 to 2017, Eni also said it planned to cut capital expenditure by 5 percent from an earlier plan and target substantially higher operating cashflow generation.

"The 5 percent capital expenditure reduction is the main takeaway for me, which combined with the step up in cashflow provides clear line of sight for investors on dividend growth," Bernstein analyst Oswald Clint said.

On the New York Stock Exchange, Eni was trading up 1.2 pct at $46.34 while in Milan the stock earlier closed at 16.98 euros, down 0.2 percent

The higher dividend and larger cash flow targets came despite the company's downgrade to annual production growth.


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