Bunge Limited (BG)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,995,000 | 3,567,000 | 2,469,000 | 2,808,000 | 1,678,000 |
| Interest expense | US$ in thousands | 471,000 | 516,000 | 403,000 | 243,000 | 265,000 |
| Interest coverage | 4.24 | 6.91 | 6.13 | 11.56 | 6.33 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,995,000K ÷ $471,000K
= 4.24
The interest coverage ratio for Bunge Limited has shown some fluctuations over the past five years. In December 2020, the ratio was 6.33, indicating that the company generated 6.33 times the amount of operating income needed to cover its interest expenses. This improved significantly to 11.56 in December 2021, suggesting a stronger ability to meet its interest obligations. However, the ratio decreased to 6.13 in December 2022, although it remained above the 5 threshold, signaling that the company still had an adequate margin of safety to cover interest payments.
By December 2023, the interest coverage ratio slightly increased to 6.91, indicating a slight improvement in the company's ability to cover its interest obligations. However, in December 2024, the ratio dropped to 4.24, falling below the industry benchmark of 5. This decline may raise concerns about the company's ability to meet its interest payments from its operating income alone.
Overall, while there have been fluctuations in Bunge Limited's interest coverage ratio over the years, the company generally maintained a reasonable level of coverage, although the decrease in the most recent year warrants further monitoring to ensure the company's financial health and ability to meet its debt obligations.
Peer comparison
Dec 31, 2024