Darling Ingredients Inc (DAR)
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 | 468,217 | 504,606 | 622,868 | 831,050 | 949,726 | 1,040,124 | 1,130,086 | 1,052,014 | 1,029,068 | 990,880 | 928,212 | 917,858 | 884,470 | 747,796 | 669,588 | 507,618 | 430,936 | 649,859 | 582,263 | 550,099 |
| Interest expense (ttm) | US$ in thousands | 5,620 | 258,754 | 258,875 | 258,997 | 259,223 | 126,688 | 126,497 | 126,056 | 125,566 | 62,585 | 62,237 | 62,168 | 62,077 | 71,488 | 71,898 | 72,310 | 72,686 | 78,481 | 78,499 | 78,516 |
| Interest coverage | 83.31 | 1.95 | 2.41 | 3.21 | 3.66 | 8.21 | 8.93 | 8.35 | 8.20 | 15.83 | 14.91 | 14.76 | 14.25 | 10.46 | 9.31 | 7.02 | 5.93 | 8.28 | 7.42 | 7.01 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $468,217K ÷ $5,620K
= 83.31
The interest coverage ratio for Darling Ingredients Inc has fluctuated significantly over the periods provided. From March 31, 2020, to September 30, 2021, the interest coverage ratio consistently increased from 7.01 to 10.46, indicating an improving ability to cover interest expenses with operating income.
However, there was a sharp increase in the interest coverage ratio in December 31, 2021, to 14.25, and further to 15.83 by September 30, 2022. This substantial increase suggests a stronger financial position in terms of servicing debt obligations.
There was another slight increase in the interest coverage ratio at the end of June 30, 2022, reaching 14.91, highlighting a continued ability to comfortably meet interest payments with operating income.
However, from there, the interest coverage ratio started to decline, dropping to 3.66 by December 31, 2023, and further to 1.95 by September 30, 2024. The sharp decrease in these periods could indicate a potential strain on the company's ability to cover interest expenses adequately with operating income.
The significant spike seen in the interest coverage ratio for December 31, 2024, to 83.31 should be interpreted with caution, as such a high ratio could potentially be attributed to unusual or one-time factors affecting the calculation.
Overall, while the interest coverage ratio has shown fluctuating trends over the periods provided, it is essential for stakeholders to closely monitor these ratios to assess Darling Ingredients Inc's financial health and its ability to manage and service its debt effectively.
Peer comparison
Dec 31, 2024