The negative rating action is based on the deterioration in credit metrics, which will continue to be negatively impacted by low but recovering operating profitability in 2024.

The rating affirmation reflects Daniella’s exceptional 2022 performance, which creates adequate liquidity for the group to withstand the slowdown in the construction market in 2023.

The upgrade is driven by the strong growth of profitability experienced and Scope’s expectation that macroeconomic headwinds will have limited impact on the group’s credit metrics.

The confirmation reflects the resilience of the business amid the global pandemic but its impacted by its governance.

The rating action follows the publication of Scope’s new Rating Methodology: Retail and Wholesale Corporates.

The rating on Daniella Kft is supported by positive interest cover and a certain resilience to macro economic swings but is constrained by the group's small absolute size and a deterioration in leverage.