Celanese Corporation (CE)
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 | 1,890,000 | 1,684,000 | 1,263,000 | 1,459,000 | 1,810,000 | 2,287,000 | 2,444,000 | 2,528,000 | 2,311,000 | 3,335,000 | 2,971,000 | 2,462,000 | 2,341,000 | 813,000 | 891,000 | 988,000 | 1,091,000 | 1,228,000 | 1,370,000 | 1,577,000 |
| Interest expense (ttm) | US$ in thousands | 720,000 | 710,000 | 686,000 | 552,000 | 405,000 | 258,000 | 125,000 | 101,000 | 91,000 | 96,000 | 103,000 | 106,000 | 109,000 | 111,000 | 110,000 | 112,000 | 115,000 | 117,000 | 120,000 | 123,000 |
| Interest coverage | 2.62 | 2.37 | 1.84 | 2.64 | 4.47 | 8.86 | 19.55 | 25.03 | 25.40 | 34.74 | 28.84 | 23.23 | 21.48 | 7.32 | 8.10 | 8.82 | 9.49 | 10.50 | 11.42 | 12.82 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,890,000K ÷ $720,000K
= 2.62
The interest coverage ratio for Celanese Corp has shown a declining trend over the past eight quarters, indicating a decrease in the company's ability to cover its interest expenses with its operating profits. The ratio has decreased from a high of 25.00 in Q1 2022 to a low of 1.66 in Q3 2023.
The significant drop in the interest coverage ratio from Q2 2022 to Q3 2022, from 18.72 to 9.41, suggests a sharp decline in profitability compared to the previous quarter. This downward trend continued in subsequent quarters, with the ratio falling below 2 in Q4 2023, indicating a potential strain on the company's ability to meet its interest obligations.
Overall, the decreasing trend in the interest coverage ratio for Celanese Corp raises concerns about the company's financial health and ability to service its debt obligations with its operating income. Investors and creditors may view this trend as a potential red flag that warrants further scrutiny of the company's financial performance and debt management strategies.
Peer comparison
Dec 31, 2023