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

modefinance has published on the website the Corporate Credit Rating (Solicited) of  EARTH ENERGY SRL, assigning the rating of B1+ (Affirm). The analysis revealed that the company has an adequate economic-financial situation with average capability of repaying financial obligations and its little affected by adverse economic scenarios.

Earth Energy S.r.l. (hereinafter also referred to as “EE”), based in Monza, is active in the energy sector, marketing natural gas and electricity. The Company sells directly to wholesalers, who in turn resell to private consumers, with a particular focus on gas users for heating purposes. EE operates in all major European markets and also provides environmental certification systems. The Company’s management team is composed of professionals with proven experience in the energy sector. 

EARTH ENERGY S.R.L. confirms also in 2025 an overall adequate financial and economic position.
The financial year saw a further confirmation of the positive growth trend, with revenues increasing by +53% (EUR 99 million), driven by volume expansion. Profitability performance is solid, with growth across all margins (EBITDA = EUR 1.81 million) and net profit (EUR 1.17 million). The management of the relationship between short-term uses and sources of funds remains correct and balanced, as does the full sustainability of the existing financial debt (net cash position of EUR 8 million).
Cash flow analysis highlights a significant strengthening of EARTH ENERGY’s liquidity position during 2025. The increase in operating cash flow (EUR 4.9 million) is mainly driven by improved working capital management, which contributed to releasing significant financial resources. These resources enabled the full coverage of investments and the partial repayment of outstanding financial debt.

The Company has a collegial administrative body, supported by an audit firm appointed at the beginning of 2025. In the same year, the Company also adopted the Legislative Decree 231 Supervisory Body (OdV 231) model and continued to strengthen its organizational structure, with the intention of pursuing this strategy further during the current year as well. The corporate structure remains clear and easily identifiable, with ownership traceable to Mr. Carlo Maria Bagnasco, who exercises control through a holding company owned by him. EARTH ENERGY itself does not hold any equity investments in other companies.

EARTH ENERGY ranks among the largest players within its sector peer group, confirming its ability to generate significant turnover and further strengthening its growth trajectory in recent years. In terms of profitability, it shows performance above the group average. Regarding solvency, its positioning is below the peer group median, reflecting a relatively high leverage level. However, its financial indebtedness remains overall balanced and consistent with the Company’s capital structure. 

The sector peer group shows a gradual improvement in financial and capital stability over the period analysed, with a reduction in financial leverage. The capital structure is overall balanced. Liquidity indicators also show a positive trend and remain consistently at sound levels. In terms of profitability, the peer group shows stable and satisfactory performance throughout the period. ROE demonstrates a solid continuity in the ability to remunerate equity, while ROCE shows a gradual strengthening of operating profitability, confirming an overall good level of profitability.

Between the end of 2025 and 2026, the global energy market continues to evolve in a context of strong growth in electricity demand and rapid expansion of renewable energy sources, particularly solar and wind power. Despite the energy transition, oil and gas continue to play a central role in the global energy mix. Geopolitical tensions related to Iran and restrictions in the Strait of Hormuz have increased market volatility, pushing Brent prices above USD 110 per barrel and generating global inflationary pressures.

In Italy, electricity consumption in 2025 reached approximately 311 TWh, with a renewable share of 41% and installed capacity of around 83.5 GW. However, strong dependence on gas continues to keep energy prices high, prompting the government to postpone the closure of some coal-fired plants to ensure energy security.

From an economic perspective, the Euro area shows moderate but resilient growth: GDP increased by 0.9% in the first nine months of 2025, with an annual forecast of around 1.3%. Growth is supported by investments, a strong labour market, declining inflation, and PNRR funds. The outlook for 2026 remains positive, although risks persist due to geopolitical tensions and international trade uncertainties.

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 published by modefinance under EU Regulation 1060/2009 and following 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 adopts the following definition of default: a company in bankruptcy, in involuntary liquidation, in controlled administration, or that is insolvent with respect to an expired financial commitment. 

The quality of the information available for evaluating the rating of the analyzed company has been 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 people 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 ongoing monitoring until withdrawal.

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

Responsible for Rating Approval - Giada D'Avenia, Rating Process Manager
giada.davenia@modefinance.com