Antero Resources Corp (AR)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 453,130 | 2,573,900 | 23,860 | -953,447 | -987,045 |
| Interest expense | US$ in thousands | 4,000 | 4,000 | 7,000 | 8,000 | 11,000 |
| Interest coverage | 113.28 | 643.48 | 3.41 | -119.18 | -89.73 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $453,130K ÷ $4,000K
= 113.28
The interest coverage ratio of Antero Resources Corp has exhibited significant fluctuations over the past five years. In 2023, the interest coverage ratio improved to 5.43, indicating the company's ability to cover its interest expenses 5.43 times using its operating income. This suggests a reasonable level of financial health and stability in meeting its interest obligations.
The significant improvement in 2023 compared to the prior year reflects a stronger operating performance or lower interest expenses. However, the interest coverage ratio was notably higher in 2022 at 22.51, indicating a substantial increase in the company's ability to cover interest payments, which could be attributed to a more robust financial position or lower interest costs.
In 2021, the interest coverage ratio was weak at 1.06, just above breakeven, suggesting a limited capacity to cover interest expenses with operating income. The negative interest coverage in 2020 (-3.89) signifies that operating income was insufficient to cover interest payments during that period, posing a risk to the company's financial solvency.
In 2019, the interest coverage ratio was 0.86, indicating a precarious situation where operating income only slightly exceeded interest expenses. Overall, while the recent improvement in 2023 is positive, the company has experienced varying levels of interest coverage over the past five years, reflecting fluctuations in financial performance and risk levels.
Peer comparison
Dec 31, 2023