Clearway Energy Inc Class C (CWEN)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 362,000 | 502,000 | 403,000 | 369,000 | 414,000 | 397,000 | 382,000 | 1,109,000 | 1,036,000 | 1,046,000 | 1,058,000 | 361,000 | 375,000 | 319,000 | 339,000 | 360,000 | 448,000 | 475,000 | 483,000 | 427,000 |
| Interest expense (ttm) | US$ in thousands | 28,000 | 419,000 | 328,000 | 295,000 | 337,000 | 291,000 | 292,000 | 284,000 | 232,000 | 223,000 | 258,000 | 314,000 | 312,000 | 302,000 | 303,000 | 293,000 | 415,000 | 412,000 | 433,000 | 470,000 |
| Interest coverage | 12.93 | 1.20 | 1.23 | 1.25 | 1.23 | 1.36 | 1.31 | 3.90 | 4.47 | 4.69 | 4.10 | 1.15 | 1.20 | 1.06 | 1.12 | 1.23 | 1.08 | 1.15 | 1.12 | 0.91 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $362,000K ÷ $28,000K
= 12.93
Clearway Energy Inc Class C's interest coverage ratio has shown fluctuations over the years, ranging from a low of 0.91 in March 2020 to a high of 12.93 in December 2024. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt.
A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses, which could potentially signal financial distress. During the earlier periods, Clearway Energy Inc faced challenges in covering its interest payments, with the ratio hovering around 1 or slightly below.
However, starting from June 2022, the interest coverage ratio improved significantly, surpassing 4 and remaining at relatively healthy levels thereafter. This improvement suggests that the company's operating income has strengthened, allowing it to comfortably meet its interest obligations.
Investors and analysts typically view a higher interest coverage ratio positively, as it indicates a company's ability to easily service its debts. In Clearway Energy Inc's case, the increasing trend in the interest coverage ratio from 2022 to 2024 reflects improvements in its financial health and ability to manage debt effectively.
Peer comparison
Dec 31, 2024