Scope Affirms Masterplast BB- Issuer Rating, Changes Outlook to Negative

Ratings

Scope ratings affirmed listed Hungarian building materials maker Masterplast's BB- issuer rating, but changed the outlook to negative from stable in a review on Tuesday, according to a report by state news wire MTI.

The negative outlook "reflects weaker credit metrics, driven by lower-than-expected EBITDA in an unsupportive macroeconomic environment", Scope said.

Scope pointed to a slowdown in the construction sector throughout Europe that has put Masterplast's margins under pressure and noted that wholesalers had started reducing their stockpiles.

"The strongest driver of [Masterplast's] medium-term profitability is dependent on the recovery of the Hungarian construction sector, and it depends on the release of funds from the EU to kickstart the sector, particularly the renovation sector," Scope said.

Scope said it could downgrade Masterplast if its debt-to-EBITDA ratio remained over 4x "on a sustained basis".

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