Corporate Credit Rating 2024 for NEWATT SRL: A3 (Affirm)

modefinance published the Solicited Corporate Credit Rating of NEWATT S.R.L. on the website and the rating assigned to the entity is A3 (Affirm). The analysis revealed Company’s capacity to meet its commitment on financial obligations is strong.

NEWATT S.R.L., founded in 2015, is an active player in the energy sector, where it operates as a supply chain partner for small Italian energy resellers and production operators, concentrating its business in Northern Italy, but also approaching foreign markets over the past year. The increase in small operators has presented a market opportunity for the Company, which supports resellers though services such as Supply Chain Management (Supply Balancing and Portfolio Management), Distribution Management, Transmission and Dispatching, and access to regulated or over the counter (OTC) markets. Additionally, the Company continuously monitors Merger & Acquisition opportunities, which have been instrumental in shaping the current Group. 

The NEWATT Group confirms a solid economic and financial situation. Overall performance is characterized by strong profitability, adequate capitalization (EUR17.21 mln), and a balanced financial structure. Turnover has increased significantly (EUR151 mln; +32%), driven by portfolio expansion and higher sales volumes, which exceeded the simultaneous decrease in material prices. The net financial position shows a cash balance exceeding gross financial debt (EUR1.8 mln), indicating the Group's full ability to repay its financial debts.

In addition, the management of the credit lines granted to the Company is effective, with punctual payment records. In FY2023, the Group generated positive operating cash flow, despite the impact of net working capital on resources. Investments, aimed at supporting the Company’s growth, increased compared to FY2022; to fund these capital expenditures (CAPEX), the Group accessed additional financial debt, which remains highly sustainable.

The governance and control system is confirmed to be adequate, with a collegial administrative body that includes Newatt shareholders and is supported by a sole auditor. The Company still lacks an external supervisory body. The Group’s structure is continuously evolving and expanding, though the relationships between its various companies are clearly defined.

Compared to its sector peer group, the Company is well-positioned in terms of size, further strengthened by the increase in turnover recorded in FY2023. NEWATT’s profitability also ranks well above the median, driven by strong economic performance, with ROI at 14.15% and ROE at 33.54%. Finally, in terms of solvency, the Company aligns with the median at a broadly sufficient level, confirming a solid capital structure.

The energy sector shows a notable recovery following the period of uncertainty experienced during the gas supply crisis, although the situation requires ongoing monitoring and favors the most vigilant companies. Economic growth is expected to remain modest in 2024, even as the overall macroeconomic framework shows general improvement compared to 2023.

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

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