Consolidated Communications (CNSL)
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 | -158,178 | -93,162 | 135,178 | 135,513 | 81,281 |
| Interest expense | US$ in thousands | 11,425 | 8,775 | 16,728 | 9,227 | 6,925 |
| Interest coverage | -13.84 | -10.62 | 8.08 | 14.69 | 11.74 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-158,178K ÷ $11,425K
= -13.84
Consolidated Communications Holdings Inc's interest coverage ratio has been fluctuating over the past five years. In December 2023, the interest coverage ratio was negative at -0.38, indicating the company's earnings were not sufficient to cover its interest expenses. This suggests financial distress and potential difficulties in meeting interest obligations from operating profits.
The trend shows improvement from 2019 to 2021, with interest coverage ratios increasing from 0.59 to 0.80, and then to 1.00. Although the ratios in these years were still relatively low, they indicate that the company's earnings were able to cover its interest expenses. However, the significant drop to 0.34 in 2022 raises concerns about the company's ability to service its debt with operating income.
It is essential for stakeholders and investors to monitor these fluctuations closely as a consistently low interest coverage ratio can indicate a higher risk of default on debt obligations. Further analysis of the company's financial health and debt management strategies is recommended to assess the sustainability of its operations.
Peer comparison
Dec 31, 2023