Corporate Credit Rating for ROMAGAS S.R.L.

modefinance published the Solicited Corporate Credit Rating of ROMAGAS S.R.L. on its CRA website. The rating assigned to the entity is B1- (First Issuance). The analysis revealed that the company has average capability of repaying financial obligations and that possibile adverse macroeconomic conditions, different management or strategies may impact on the capability of repaying its debts.

The rating assigned by modefinance is based on the following key motivations:

• The Company has a balanced capital structure and incorporates the elements deriving from the acquisition of the gas supply contract of the parent company. Although the company has no financial debts and the overall indebtedness is low, the business developments still show unsatisfactory profitability level.
• The cash flowsanalysis revealed the Company struggle to generate positive cash flows, whichat the moment appear meager.
• The Company has a single-manager administrative body and, although the group is well defined in terms of roles and responsibilities, a decentralization of the decision-making body appears necessary.
• The Company is operative since 2012, but the Group has been active for more than 15 years and has achieved significant results in a short time, which makes it one of the leading players of its sector in Italy.
• Romagas Srl is a small-sized company. Such condition compromises profitability values, although the company has no financial indebtedness. On the solvency point of view, the company outperforms the peer group, whose values are high but do not exceed the alert threshold. Liquidity values are low, while marginality values are positive.
• The ongoing pandemic and the resulting economic losses lead to a contraction in GDP and employment. 2019 saw a drop in raw materials prices, which in fact led to a contraction in the purchase and sales volumes of all players. The consequences of COVID-19 and of the lockdown will probably lead to higher household consumption in 2020, but also to more insolvency situations.

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 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 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 satisfactory by modefinance. 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 – Fabio Politelli (Rating Analyst)
fabio.politelli@modefinance.com
+39 040 3756740

Assistant Analyst – Christian Raimondo (Rating Analyst)
christian.raimondo@modefinance.com
+39 040 3756742

Responsible for Rating Approval – Pinar Dilek
pinar.dilek@modefinance.com
+39 040 3756740