Ichor Holdings Ltd (ICHR)

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	-13,020	-19,346	-23,227	-21,835	-11,699	14,055	51,665	80,015	86,386	84,123	72,667	72,516	80,207	78,461	69,450	53,559	41,018	32,762	23,837	17,540
Interest expense (ttm)	US$ in thousands	9,266	12,255	15,753	18,925	19,379	18,928	17,041	14,074	11,056	8,298	6,536	6,064	6,451	6,996	7,561	8,272	8,727	9,182	9,793	10,253
Interest coverage		-1.41	-1.58	-1.47	-1.15	-0.60	0.74	3.03	5.69	7.81	10.14	11.12	11.96	12.43	11.22	9.19	6.47	4.70	3.57	2.43	1.71

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-13,020K ÷ $9,266K
= -1.41

The interest coverage ratio of Ichor Holdings Ltd has demonstrated fluctuations over the reporting periods, indicating the company's ability to cover its interest expenses from its operating income.

The ratio started at a relatively low point of 1.71 in March 2020 and steadily increased over the next few quarters, reaching its peak at 12.43 in December 2021. This indicated a significant improvement in the company's ability to meet its interest obligations.

However, the interest coverage ratio then began to decline, dropping to 0.74 by September 2023 and turning negative in subsequent periods. This downward trend suggests a potential strain on the company's ability to cover its interest expenses with its operating income.

It is important for stakeholders to closely monitor this trend and assess the potential impact on the company's financial health and sustainability. It may be necessary for Ichor Holdings Ltd to take corrective actions to improve its interest coverage ratio and ensure its long-term financial stability.