Scope upgrades Masterplast to BB-

Ratings

Listed Hungarian building materials maker Masterplast on Monday said Scope Ratings upgraded its issuer rating to BB- from B+ with a stable outlook, according to a report by state news wire MTI.

Masterplast said in July that it took initial steps to issue a 10-year security in the framework of the Bond Funding for Growth Scheme (BGS) of the National Bank of Hungary (NBH). A B+ rating is the threshold for participating in the BGS. 

On Monday, Masterplast said it plans to issue HUF 9 billion of securities "by the end of 2021".

In a rating report issued separately, Scope said Masterplast's entry into the personal protective equipment market as well as a healthy building materials market were behind the upgrade.

"The upgrade of the ratings is driven by Masterplast's strong business performance in the last 18 months thanks to its broadened segmental setup (healthcare equipment) and a positive market environment (insulation materials) that will help to keep business afloat going forward," Scope said.

It noted that investments in production capacities had been "heavily subsidized", at 40%-80% of investment costs, maintaining the company's credit metrics.

Masterplast entered the PPE market last summer with the acquisition of a German fleece maker with business partners in both the construction and the healthcare industries.

Its first-quarter revenue climbed 53% year-on-year to EUR 38.3 million.

Scope said Masterplast's rating is constrained by its "small overall scale, which lessens its ability to benefit from economies of scale or to offset the impact of economic cycles".

It also counted "limited diversification" and further investments in production capacities as negative rating drivers.

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