Dorian LPG Ltd (LPG)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 328,830 | 330,233 | 277,386 | 225,036 | 198,361 | 152,056 | 117,113 | 108,090 | 92,399 | 101,213 | 120,538 | 106,837 | 116,101 | 119,581 | 119,464 | 163,316 | 161,069 | 107,507 | 75,061 | 25,476 |
| Interest expense (ttm) | US$ in thousands | 26,992 | 48,262 | 38,500 | 40,182 | 40,776 | 30,400 | 31,947 | 20,631 | 20,412 | 20,893 | 19,771 | 19,961 | 21,666 | 34,162 | 34,142 | 34,006 | 32,355 | 36,453 | 36,520 | 36,589 |
| Interest coverage | 12.18 | 6.84 | 7.20 | 5.60 | 4.86 | 5.00 | 3.67 | 5.24 | 4.53 | 4.84 | 6.10 | 5.35 | 5.36 | 3.50 | 3.50 | 4.80 | 4.98 | 2.95 | 2.06 | 0.70 |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $328,830K ÷ $26,992K
= 12.18
The interest coverage ratio for Dorian LPG Ltd has shown fluctuations over the past several quarters. The ratio indicates the company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally favorable as it suggests that the company is more capable of meeting its interest obligations.
Looking at the historical trend, we can observe that the interest coverage ratio has been relatively strong, ranging from 2.06 to 12.18. The ratio peaked at 12.18 on March 31, 2024, implying a significant buffer to cover interest expenses. However, the ratio has also experienced periods of decline, hitting a low of 0.70 on September 30, 2019, which may raise concerns about the company's ability to meet its interest payments from operating income alone.
Overall, it is essential for investors and stakeholders to monitor the interest coverage ratio closely to assess Dorian LPG's financial health and its ability to service its debt obligations. A sustained high interest coverage ratio would indicate financial strength and stability, while a declining trend may signal increasing financial risk.