NEWATT S.R.L. Corporate Credit Rating (First Issuance)

modefinance published the Solicited Corporate Credit Rating of NEWATT S.R.L. on its CRA website, and the rating assigned to the entity is A3- (First Issuance). The analysis revealed it is an adequate company with average capability of repaying financial obligations and little affected by adverse economic scenarios.

NEWATT S.R.L. was founded in 2015 as a company active in the energy sector, within which operates as a supply chain partner for small Italian resellers and energy generators, concentrating its operations in Northern Italy.

The Italian energy market has undergone a particular mutation over the last few years: although the number of large integrated operators has remained stable, the number of small reseller operators (<100 GWh / year) has grown. The latter type of operators, due to the small size that characterizes them, is cost-efficient, rooted in the territory, with a loyal customer portfolio, but lacks in risks management (mainly operational and market), thus being extremely vulnerable to sector dynamics. As a supply chain partner, NEWATT S.R.L., supports small resellers through Supply Chain management services (Supply, Balancing and Portfolio management); Distribution, Transport and Dispatching Management; Access to regulated markets and over-the-counter markets; Volume & price risk management.

NEWATT S.R.L. has an adequate economic-financial situation, characterized by strong solvency, definitely improved compared to the previous year. The management of current liabilities and current assets appears adequate, while profitability is the healthiest area of analysis, as proven by the particularly good ROI and ROE values. The interim financial statement of the current year (at 30/06/2020) confirms the same quality as the previous year.

The cash flow analysis reveals that the company manages its cash flows correctly and appreciably, generating enough liquid resources from operational management to cover both investment and financing activities, and to increase the funds of the company at the same time. The working capital management appears very good and positively contributes to the generation of operating cash flow. The Central Credit Register analysis does not reveal any critical issue. No financial distress nor overruns have been found.

In the peer group analyzed, the company is well-positioned in terms of size (86/100), proving to be one of the largest companies in terms of turnover within the analysis sample. As regard solvency area (64/100), the company shows a positioning well beyond the sector median, which can be considered adequate. Profitability (90/100) proves to be the healthiest area also in terms of positioning, with the company that stands out among the most profitable in the analysis sample.

The company operates in the energy sector, which has undergone major market changes in recent years, both due to political initiatives and to the current epidemic. Italy's macroeconomic scenario is currently significantly influenced by the pandemic crisis and the measures taken by the Government to counter the spread of the virus. In light of this, a radical change is expected in energy market, which will benefit operators who will be able to better adapt to changing market demands.

In the following table, the addressing factors, actions or events that could lead to an upgrade or a downgrade are summarized:

The present Corporate Credit rating is issued by modefinance under EU Regulation N. 1060/2009 and following amendments.

The present rating is solicited, and based on both private and public information. The rated entity and/or related third parties have provided all private information used. modefinance had access to some accounts and other relevant internal documents of the rated entity and/or related third parties. Solicited and unsolicited ratings issued by modefinance are of comparable quality, as the solicitation status has no effect on methodologies used. More comprehensive information on modefinance Corporate Credit Ratings are available here.

The present Corporate Credit Rating is issued on MORE Methodology 2.0 and Rating Methodology 1.0. A comprehensive description of both methodologies, as well as information on modefinance Rating Scale and Mappings, is available here. For information on historical default rates of modefinance Corporate Credit Ratings please refer to ESMA Central Repository and ESMA European Rating Platform.

modefinance refers to default as a company under bankruptcy, or under liquidation status, or under administration or for which missed payments on a financial obligation are officially recorded.

The quality of the information available on the rated entity and used to determine the present rating was judged by modefinance as satisfactory. Please note that modefinance does not perform any audit activity and is not in a position to guarantee the accuracy of any information used and/or reported in the present document. As such, modefinance can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect. The present credit rating was notified to the rated entity in order to identify potential factual errors, as prescribed by the CRA Regulation.

No amendments were applied after the notification process.

The rated entity is not a buyer of ancillary services provided by modefinance.

The rating action issued by modefinance was performed independently. The analysts, members of the rating team involved in the process, modefinance Srl and its members and shareholders do not have any conflicts of interest in relation to the Rated Entity and/or Related Third Parties. If in the future a potential conflict of interest is identified in relation to the persons reported above, modefinance Ratings will provide the appropriate information and if necessary the rating will be withdrawn.

The present Credit Rating is an opinion of the general creditworthiness that modefinance issues on the rated entity, and should be relied upon to a limited degree. The issued rating is subject to an ongoing monitoring until withdrawal.

Head Analyst – Chiara di Piazza
chiara.dipiazza@modefinance.com
+39 040 3756740

Responsible for Rating Approval – Pinar Dilek
pinar.dilek@modefinance.com
+39 040 3756740