Cogent Communications Group Inc (CCOI)
Interest coverage
| 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 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -129,328 | -33,331 | 45,322 | 109,492 | 113,964 | 122,623 | 123,084 | 121,729 | 119,236 | 110,435 | 107,915 | 107,278 | 106,837 | 107,493 | 107,256 | 101,704 | 100,254 | 94,532 | 90,988 | 90,320 |
| Interest expense (ttm) | US$ in thousands | 106,784 | 93,846 | 87,596 | 72,421 | 67,584 | 59,308 | 55,633 | 56,391 | 58,059 | 60,350 | 61,837 | 63,100 | 62,484 | 61,689 | 61,120 | 59,216 | 57,452 | 55,751 | 53,327 | 52,105 |
| Interest coverage | -1.21 | -0.36 | 0.52 | 1.51 | 1.69 | 2.07 | 2.21 | 2.16 | 2.05 | 1.83 | 1.75 | 1.70 | 1.71 | 1.74 | 1.75 | 1.72 | 1.75 | 1.70 | 1.71 | 1.73 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-129,328K ÷ $106,784K
= -1.21
Cogent Communications Holdings Inc's interest coverage ratio has been erratic over the past eight quarters, with fluctuations observed in each period. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.
The interest coverage ratio was negative in Q4 2023 and Q3 2023, indicating that the company's operating income was insufficient to cover its interest expenses during these periods. This raises concerns about the company's financial health and its ability to meet debt obligations.
In Q2 2023, the interest coverage improved significantly to 0.97, but it was still below 1, suggesting a precarious financial position. However, in Q1 2023, the interest coverage ratio increased to a more healthy level of 2.20, indicating that the company's operating income was more than double its interest expenses.
Compared to the previous year, the interest coverage ratio has shown some improvement in the recent quarters. Despite fluctuations, there is an overall increasing trend in the interest coverage ratio from Q2 2022 to Q1 2023. However, the negative ratios in the most recent quarters raise concerns about the company's ability to service its debt.
Overall, Cogent Communications Holdings Inc needs to focus on improving its operating income to ensure it can comfortably cover its interest expenses and enhance its financial stability.
Peer comparison
Dec 31, 2023