Category: Credit Rating Agency

NEWATT S.R.L. Corporate Credit Rating (Affirm)

modefinance published the review of the Solicited Corporate Credit Rating of NEWATT S.R.L on its CRA website, and the rating assigned to the entity is A3-(Affirm). The analysis confirmed 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, and 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.

Key Rating Assumption

The company's economic and financial situation is adequate and characterized by balanced growth, driven by sufficient capitalization, good management of operating cash flows and significant margins. The cash flows analysis reveals good management of operating cash flows, boosted by the significant values of self-financing and by a correct management of the working capital.
The liquid resources generated in the last year are considerable.
The governance structure has been adapted by transforming the administrative body into a Board of Directors. The "Group" is well-defined, and so is the chain of command.

The company was founded in 2015 and is active in the energy sector, where it acts as a supply chain partner for small reseller operators in Northern Italy. Also during the year of the Covid19 outbreak, the company has pursued a growth and development path. The efforts of the shareholders, who have made a significant capital increase, are appreciable. The 2020 Financial Statement is appreciable also in terms of size and in terms of volumes, profitability and solvency, where the company is positioned well above the sector median.

The health state of the peer group is overall adequate and characterized by moderate indebtedness and sufficient liquidity values. Profitability appears satisfactory.
The energy sector is facing a sharp market mutation, due to both political initiatives and the ongoing epidemic. In light of this, a radical change is also expected in market operators, among whom those who have been able to adapt better to the overall change in their sector will benefit most. From a macroeconomic point of view, the Italian economy is still significantly affected by the serious pandemic crisis that has hit the country and the necessary measures taken by the Government to counter the spread of the virus.

Sensitivity Analysis

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

placehold

Important

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 (credit risk software). 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.

Contacts

Head Analyst –  Fabio Politelli (Rating Analyst)
fabio.politelli@modefinance.com
+39 0403756740

Responsible for Rating Approval – Pinar Dilek
pinar.dilek@modefinance.com
+39 0403756740  

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