Corporate Credit Rating 2025 for EARTH ENERGY SRL: B1+ (Upgrade)

modefinance published the Solicited Corporate Credit Rating of EARTH ENERGY S.R.L. on the website and the rating assigned to the entity is B1+ (Upgrade). The analysis revealed that the company has an adequate economic-financial situation with average capability of repaying financial obligations and it is little affected by adverse economic scenarios.

Earth Energy S.r.l. (hereinafter also referred to as “EE”), based in Monza, has been active in the energy sector since 2009 where it markets natural gas and electricity. The Company sells directly to wholesalers who in turn resell to private consumers, particularly focusing on users of gas for heating. EE is active in all major European markets, also providing environmental certification systems. The Company management consists of professionals with proven experience in the energy sector. 

The Company maintained an overall adequate state of health in 2024. The financial year confirmed the positive growth trend, with revenues reaching 64.66 million euros, an increase of +15%, driven by volume expansion and the contribution of the electricity segment in addition to the gas segment. Profitability performance was solid, with EBITDA rising to 1.33 million euros (+48.76%) and net profit reaching 857 thousand euros (+41.88%). The management of short-term assets and liabilities remained balanced and appropriate, and the Company's financial debt remains fully sustainable. The net financial position was negative, reflecting a positive cash position.

The Company is managed by a collegial administrative body, supported by an auditing firm appointed at the beginning of 2025. The adoption of the Legislative Decree 231/2001 Organizational Model is also planned for the current year. In 2024, the Company strengthened its organizational structure by appointing a Head of Administration and Accounting and a Business Development Manager, with the intention of continuing this strategic development in the current year. The group structure remains clear and easily identifiable, with ownership traced to Mr. Carlo Maria Bagnasco, who exercises control through a personally owned holding company.

Earth Energy ranks among the largest companies in its segment by revenue, with a size score above the 80th percentile. In terms of profitability, the Company is among the best performers within its peer group. However, it is positioned below the median in terms of solvency, due to the influence of its leverage ratio. The sector peer group shows improving trends across all analyzed ratios. Companies in the group are generally adequately capitalized and maintain a balanced financial leverage. The management of current assets and liabilities is also appropriate. Profitability indicators are at median levels, indicating full adequacy.

In 2024, the European energy market showed signs of stabilization, with declining prices and reduced volatility. Nevertheless, uncertainties persist due to geopolitical (e.g., the war in Ukraine, the halt of Russian gas transit) and technical factors. In Italy, high dependence on gas has increased costs compared to other EU countries. Renewable energy sources grew significantly (+13.4%), while coal use declined. However, the intermittency of renewables and the key role of gas continue to drive volatility. A harsh winter depleted gas reserves, raising potential risks for the summer and following winter. Italy remains vulnerable in the short term, pending structural benefits from renewables and energy storage systems.

In Q4 2024, the Italian economy remained weak, held back by declining consumer spending, unfavorable investment conditions, and falling exports. GDP growth is projected at 1% annually for the 2025-2027 period.

The present Corporate Credit Rating is published by modefinance in accordance with EU Regulation No. 1060/2009 and subsequent amendments. 

The present rating is solicited and is 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 at http://cra.modefinance.com/en

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 at http://cra.modefinance.com/en/methodologies.

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.

Modefinance provide an ancillary service to the entity (preliminary rating). Modefinance ensures that the provision of ancillary services does not present conflicts of interest with its credit rating activities.

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 - Elisa Graffi, Rating Analyst
elisa.graffi@modefinance.com

Responsible for Rating Approval - Pinar Dilek, Rating Process Manager
pinar.dilek@modefinance.com