Amcor PLC (AMCR)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,062,385 | 1,368,385 | 1,365,385 | 1,298,000 | 1,255,000 | 1,170,000 | 1,150,000 | 1,469,000 | 1,530,000 | 1,445,000 | 1,525,000 | 1,281,000 | 1,247,000 | 1,387,000 | 1,358,000 | 1,343,000 | 1,319,000 | 1,254,700 | 1,186,200 | 1,154,700 |
| Interest expense (ttm) | US$ in thousands | 396,000 | 337,000 | 341,000 | 349,000 | 348,000 | 333,000 | 330,000 | 320,000 | 285,000 | 259,000 | 209,000 | 169,000 | 159,000 | 155,000 | 155,000 | 153,000 | 153,000 | 162,100 | 171,900 | 187,200 |
| Interest coverage | 2.68 | 4.06 | 4.00 | 3.72 | 3.61 | 3.51 | 3.48 | 4.59 | 5.37 | 5.58 | 7.30 | 7.58 | 7.84 | 8.95 | 8.76 | 8.78 | 8.62 | 7.74 | 6.90 | 6.17 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,062,385K ÷ $396,000K
= 2.68
The analysis of Amcor PLC's interest coverage ratios over the period from September 2020 to June 2025 reveals important insights into the company's ability to meet its interest obligations. The interest coverage ratio, defined as earnings before interest and taxes (EBIT) divided by interest expense, measures how comfortably a company can cover its interest payments with its operating earnings.
Initially, the ratio demonstrated a trending increase, rising from 6.17 in September 2020 to a peak of 8.95 in March 2022. This suggests an improvement in the company's earnings capacity relative to its interest obligations during this period, indicating reduced financial risk and enhanced debt servicing ability.
Post-March 2022, there is a noticeable decline in the interest coverage ratio, descending to 7.30 at the end of 2022, and further decreasing to 4.59 by September 2023. This downward trend implies a weakening in Amcor's earnings relative to its interest expenses, potentially signaling increased financial stress or underlying operational challenges.
From December 2023 onward, the ratio exhibits some stabilization and modest variation, fluctuating between 3.48 and 4.06. The lowest observed ratio was 2.68 in June 2025, which raises concerns regarding the company's ability to comfortably cover interest expenses. Such a decline indicates a potential narrowing of the company's margin of safety in debt servicing, highlighting increased financial risk.
Overall, the progression of Amcor PLC's interest coverage ratios reflects a peak in early 2022 followed by a gradual weakening, culminating in a relatively lower ratio by mid-2025. This trend warrants ongoing monitoring, as sustained reductions below industry or historical norms could signal mounting financial vulnerability.
Peer comparison
Jun 30, 2025