The liberalization of the Italian natural gas market: the evolution of profitability and financial performances of retail companies

In the last decade, the Italian natural gas market has undergone profound changes. The slow process of liberalization that began in 2000 and still ongoing, has produced many changes in the industry as companies had to react to the new regulatory framework. Many companies have sought agreements, alliances and mergers to consilidate their position on the market, others have sought to diversify their offerings, becoming multi-utility companies, others have not been able to react to the new competitive pressures and they went out of business. Our work aims to analyze the performance of retail companies of natural gas after the liberalization of the sector, carrying out a financial statement analysis and evaluating the main results on profitability, financial and liquidity. The results highlight the relationship between the development of companies’ performances and the retail price regulation imposed by the Authority for Electricity and Gas.