Corporate Credit Rating for PASSUELLO F.LLI S.R.L.: A3- (Downgrade)

Press release 30 September 2022

Solicited Corporate Credit Rating for PASSUELLO F.LLI S.R.L.: A3- (Downgrade)

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

Passuello F.lli Srl, based in Calalzo di Cadore (BL), is a family business with a long tradition in the energy sector, operating for several decades as supplier of electricity, diesel, LPG gas, methane and pellets.

Key Rating Assumptions

PASSUELLO F.LLI S.R.L. has a good economic and financial situation, with a strong capital structure; comparing short-term assets and liabilities, we can appreciate an adequate level. In 2021, profitability area worsened reaching a sufficient level although it could be improved. 

The Cash Flow analysis reveals how the company was able to increase cash and cash equivalents, despite the relevant amount absorbed by the net working capital (due to the growth of trade receivables) that led operating cash flow to erode resources (-3.9 million euro). Thanks to financing activity (+4.5 million euro), liquid assets were more than sufficient to cover both operating and investing activities (-347 th euro). 

The company is rooted in Passuello family, which has been running a markedly family-run business since its foundation. Beyond the long tradition in business management, the company could benefit from a more structured organization. Company was established in the Twenties, and it shows a notable presence in the northern Eastern regions of Italy. Thanks to the several policies carried out by the management, the Company will end this year with a relevant improvement, in operating margins and net profit. Its credibility and strong experience in the sector allowed Passuello F.lli Srl to face an extraordinary period and to be able to rely on financial resources from the banking sector.

Comparing Passuello F.lli Srl with the peer group, we can notice that the entity is very well-positioned in terms of solvency and size, influenced by the extraordinary increase registered by the operating revenues. Regarding profitability, it remains slightly below the sector median, despite it demonstrates a sufficient level. Analyzing the trend of industry creditworthiness, the company proves to be good in all the considered areas, in particular indebtedness, as well as financial debt, proves to be more than adequate. 

Liquidity, despite a slight decrease, is more than sufficient, while profitability improved in 2021. Moreover, the industry shows a very good distribution of the MORE Score, as most of the companies (75%) are at a sufficient level (equal or above the 6th class of the MORE Score), so the sector can be considered in good financial health. 

Considering the news on the industry, we analyzed how the energy sector in Italy is of considerable strategic importance and has undergone a radical transformation over the last few years, with the use of coal that is gradually reducing in spite of renewable energies. However, this objective clashes with recent geopolitical tensions and with the need for the Italian government to seek alternative sources of supply. The abolition of the more protected market will also expand the number of potential customers, although the granularity of the sector represents an important barrier. 

Finally, the macroeconomic picture relating to Italy shows how the recovery in 2021 has overall complied with forecasts, with sustained economic growth that could also be confirmed in the coming years. The conflict between Russia and Ukraine, with the consequent impacts on energy and food prices, nevertheless undermines forecasts, especially for the maintenance of adequate economic growth, with internal consumption that risks being affected by the increase in inflation, currently estimated at over 6%. To this has recently been added the political crisis, which could still be resolved at the end of September following the new political elections. The macroeconomic forecasts for 2022 will therefore be revised downwards with respect to the estimates at the beginning of the year.

Sensitivity Analysis

In the following table, the addressing factors, actions or events that could lead to a rating 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 (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.


Head Analyst – Eva Vocci (Rating Analyst)

Responsible for Rating Approval – Pinar Dilek (Rating Process Manager)