HF Sinclair Corp (DINO)
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 | 326,710 | 492,076 | 1,658,826 | 2,168,604 | 2,264,658 | 3,152,560 | 3,413,020 | 4,384,374 | 4,134,157 | 3,260,340 | 2,226,255 | 889,605 | 788,271 | 696,185 | 367,992 | -127,331 | -705,924 | -468,232 | -11,753 | 630,190 |
| Interest expense (ttm) | US$ in thousands | 165,000 | 175,842 | 184,132 | 185,665 | 190,796 | 198,468 | 194,612 | 186,591 | 175,628 | 149,605 | 131,667 | 121,648 | 125,175 | 134,824 | 138,521 | 142,274 | 126,527 | 122,306 | 127,744 | 129,313 |
| Interest coverage | 1.98 | 2.80 | 9.01 | 11.68 | 11.87 | 15.88 | 17.54 | 23.50 | 23.54 | 21.79 | 16.91 | 7.31 | 6.30 | 5.16 | 2.66 | -0.89 | -5.58 | -3.83 | -0.09 | 4.87 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $326,710K ÷ $165,000K
= 1.98
HF Sinclair Corp's interest coverage has shown a volatile trend over the past few years. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income. The ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
From March 31, 2020, to September 30, 2021, the interest coverage ratio remained below 1, indicating financial distress and a potential risk of default on interest payments. However, from December 31, 2021, onwards, there was a significant improvement in the interest coverage ratio, reaching above 1 and steadily increasing until December 31, 2024.
The interest coverage ratio peaked at 23.54 on December 31, 2022, indicating a strong ability to cover interest expenses. This improvement suggests that the company's operating income has increased sufficiently to comfortably meet its interest obligations, signaling better financial health and stability in its ability to service debt.
Overall, the trend in HF Sinclair Corp's interest coverage ratio shows a transformation from financial vulnerability to strength, reflecting improved operational performance and financial management in meeting its interest payment obligations.