Fresh Del Monte Produce Inc (FDP)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 189,700 | 30,800 | 143,100 | 102,300 | 75,600 |
| Interest expense | US$ in thousands | 18,400 | 24,100 | 24,400 | 20,300 | 21,400 |
| Interest coverage | 10.31 | 1.28 | 5.86 | 5.04 | 3.53 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $189,700K ÷ $18,400K
= 10.31
Fresh Del Monte Produce Inc's interest coverage has shown some fluctuations over the years. In 2020, the company had an interest coverage ratio of 3.53, indicating that it generated enough operating income to cover its interest expenses 3.53 times.
By the end of 2021, the interest coverage improved to 5.04, suggesting a stronger ability to meet interest obligations from operating income. This further increased to 5.86 by the end of 2022, indicating an even healthier financial position with a more comfortable buffer to cover interest payments.
However, the interest coverage ratio dropped significantly to 1.28 as of December 31, 2023, raising concerns about the company's ability to cover its interest expenses comfortably with its operating income. The sharp decline may warrant a closer examination of the company's financial health during that period.
Fortunately, Fresh Del Monte Produce Inc rebounded strongly by the end of 2024, boasting an impressive interest coverage ratio of 10.31. This substantial improvement indicates a substantial increase in operating income relative to interest expenses, showcasing the company's strengthened financial position and enhanced ability to cover its interest obligations several times over.
Overall, while the company experienced fluctuations in its interest coverage ratio over the years, the significant improvement in recent years indicates a positive trend towards stronger financial health and better capacity to service its debt obligations.
Peer comparison
Dec 31, 2024