The latest information on the rating, including rating reports and related methodologies, is available on this LINK.

Rating action

Scope Ratings GmbH (Scope) has today affirmed the B/Stable issuer rating on Szinorg Universal Zrt. (Szinorg). Scope has also affirmed its B+ rating for the senior unsecured debt category.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: B (unchanged). Szinorg remains a small-scale construction and real estate company with limited diversification and exposure to cyclical demand. Scale constraints and concentration continue to cap economies of scale and pricing power. Nevertheless, the growing share of recurring income from real estate operations provides a stabilising counterbalance to construction volatility. In 2025, recurring activities (industrial leasing and hotels) contributed around 45% of group EBITDA, a share expected to increase as new assets come on stream amid subdued construction activity.

Geographic concentration remains high, with operations primarily in Debrecen. Segment diversification has improved through stable industrial letting (weighted average unexpired lease term of around eight to nine years; 100% occupancy) and hotel operations. However, it is still limited by the portfolio’s small size: two industrial assets totalling around 23,000 sq m of gross leasable area (Szinorg owning 50% of these properties) and two hotels. The industrial assets are fully occupied and leased on long-term contracts (with a weighted average unexpired lease term of nine years as of December 2025), supporting rental cash flow visibility. At the same time, hotel operations continue to contribute meaningfully. Hotel Lycium was refurbished and reopened under Accor’s Handwritten Collection in January 2026, complementing the Mercure Debrecen (opened in August 2022). The hotel portfolio’s performance remains solid, albeit with increased competition on the local market.

Preliminary unaudited figures for 2025 indicate revenues of around HUF 16.8bn (down 9.5% YoY) and reported EBITDA of about HUF 1.8bn. The resulting margin (roughly 10.9%) was driven by a one-off gain from the early sale of a real estate asset. Excluding this, the margin would have been around 3.9%, reflecting weaker construction profitability. Earnings are mainly supported by higher-margin recurring income from industrial letting and hotels.

The backlog remains concentrated, with the top three and top ten projects representing 53% and 97% of future contracted revenues, respectively. The January 2026 backlog stands at HUF 25.6bn, equivalent to 1.2x book‑to‑bill. While the previous residential development in the Balaton Lake region has been postponed and removed from the forecast and backlog, the pipeline still embeds cluster risk, exposing cash flows to delay/cancellation risk on larger projects.

Financial risk profile: B+ (unchanged). Szinorg’s financial risk profile is constrained by Scope’s expectation of higher leverage and negative free operating cash flow. This is attributed to the substantial investment in the real estate portfolio.

As of December 2025, outstanding bank loans totalled HUF 3.0bn, with additional borrowings of around HUF 9.2bn planned through 2027. These include the refinancing of the Mercure Debrecen hotel (EUR 9m/approx. HUF 3.5bn; agreement signed with Raiffeisen Bank, drawdown expected by January 2026), financing for the logistics hall development (EUR 16m/approx. HUF 6.4bn), and short-term loans of up to HUF 3bn for the Hajdúszoboszló residential project, to be repaid from apartment sales.

Scope expects the additional debt to significantly weaken credit metrics. FFO/debt* is projected to fall to high single digits during the forecast period. At the same time, Scope forecasts that debt/EBITDA will increase from 4.2x in 2024 to 4.9x in 2025, reaching 10x in 2026.

The interest result was positive in 2025, supported by income from investments in securities and low debt expenses, as the HUF 5bn bond carries a fixed rate of 3%. Scope anticipates that the interest result will turn negative in 2027, given the higher debt burden. The floating rates on the loans also expose Szinorg to potential fluctuations in the Euribor rate although most current debt is fixed rate (84%).

Liquidity: adequate (unchanged). Liquidity is adequate and benefits from cash sources of approx. HUF 9.6bn of cash and equivalents as of December 2025 alongside available overdrafts and working capital lines totalling HUF 2.1bn. The debt maturity profile is backloaded, featuring a HUF 5.0bn bond maturing only in 2030 and no significant repayments required prior to that date. Nonetheless, external liquidity will be necessary to finance capex and working capital requirements.

Scope notes that Szinorg’s senior unsecured bond issued under the Hungarian National Bank’s Bond Funding for Growth Scheme has a covenant requiring the accelerated repayment of the outstanding nominal debt amount (HUF 5bn) if the debt rating of the bond stays below B+ for more than two years (grace period) or drops below B- (accelerated repayment within 30 days). Such a development could adversely affect the company’s liquidity profile. The rating headroom to entering the grace period is 0 notches. Given the limited rating headroom, the company must at least maintain its current credit profile to avoid triggering the rating-related covenant.

Supplementary rating drivers: credit-neutral (unchanged). The rating has no adjustments related to financial policy, peer group considerations, parent support, or governance and structure.

Outlook and rating sensitivities

The Stable Outlook reflects the higher contribution of real estate assets to EBITDA, which strengthens the recurring income base and partially mitigates volatility related to the strained construction business. The higher profitability of the real estate assets’ margins should also counterbalance the margins of construction activities, which are expected to remain under pressure. Additionally, the Outlook incorporates a new accommodation project and the expansion of industrial halls. The Outlook also assumes ongoing adequate access to external financing to fund the company’s business plan.

The upside scenarios for the ratings and Outlook are (collectively):

1. Improved business risk profile, with a significantly larger development pipeline including a backlog of more than one year and improved diversification (by customer and project)
    
2. Debt/EBITDA remaining at around 4x, enabled by a higher-than-anticipated recurring EBITDA contribution from investment properties

The downside scenarios for the ratings and Outlook are (individually):

1. Backlog of below 1x
    
2. Worsening liquidity, for example, due to significant delays in customer payments or non-recoverable cost overruns in projects

Debt ratings

The rated entity issued a HUF 5.0bn senior unsecured corporate bond (ISIN HU0000359633) in 2020. Scope’s recovery analysis is based on a hypothetical default scenario in 2027, which assumes outstanding senior unsecured debt of HUF 5.0bn, additional bank loans of HUF 13.5bn, and available overdrafts of HUF 2.1bn. The recovery assessment results in an ‘above-average‘ recovery for senior unsecured debt, which translates into a B+ rating, one notch above the underlying issuer rating. The risk that the amount of senior unsecured debt increases on a path to default constrains the uplift.

Environmental, social and governance (ESG) factors

Overall, ESG factors have no impact on this credit rating action. Scope sees improved corporate governance following the December 2025 decision to separate the roles of Chairman and CEO, maintaining Mr. Gyula Szűcs as Chairman of the Board, and the appointment of Mr. Sándor Szabó as CEO effective from 1 January 2026, after serving as General Deputy CEO since 2022. The Board of Directors retains oversight while operational management is led by the CEO. Scope views these steps as enhancing strategic oversight, clarifying accountability, and reducing key person risk within the holding company, supporting an orderly generational transition.

All rating actions and rated entities

Szinorg Universal Zrt

Issuer rating: B/Stable, affirmation

Senior unsecured debt rating: B+, affirmation

*All credit metrics refer to Scope-adjusted figures.
 
Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; Construction and Construction Materials Rating Methodology, 23 January 2026; European Real Estate Rating Methodology, 2 June 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Credit Ratings were not requested by the Rated Entity or its Related Third Parties. The Credit Rating process was conducted:
With the Rated Entity or Related Third Party participation       YES
With access to internal documents                                         YES
With access to management                                                  YES
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Michel Bove, Director
Person responsible for approval of the Credit Ratings: Philipp Wass, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 25 February 2020. The Credit Ratings/Outlook were last updated on 28 January 2025.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use/exclusion of liability
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