LyondellBasell Industries NV (LYB)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,053,000 | 5,101,000 | 6,773,000 | 1,559,000 | 4,392,000 |
| Interest expense | US$ in thousands | 477,000 | 287,000 | 519,000 | 526,000 | 347,000 |
| Interest coverage | 6.40 | 17.77 | 13.05 | 2.96 | 12.66 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,053,000K ÷ $477,000K
= 6.40
The interest coverage ratio for LyondellBasell Industries NV has shown fluctuations over the past five years. In 2023, the interest coverage ratio was 10.20, which indicates that the company's earnings before interest and taxes (EBIT) were sufficient to cover its interest expense 10.20 times over. This was a decrease from 2022 when the ratio was 20.06, indicating a substantial decrease in the company's ability to cover its interest obligations.
Compared to 2021 and 2019 when the interest coverage ratios were 15.41 and 13.23 respectively, the 2023 ratio of 10.20 reflects a decline in the company's ability to meet its interest payments. However, it is worth noting that the ratio in 2023 was still higher than in 2020 when it was 4.66, showing an improvement in the company's ability to cover its interest expenses compared to the previous year.
Overall, the downward trend in the interest coverage ratio from 2022 to 2023 raises concerns about the company's ability to service its debt obligations comfortably. Investors and creditors may view this as a potential risk factor, indicating the need for the company to closely monitor its financial performance and debt levels to ensure sufficient cash flow to cover interest payments in the future.
Peer comparison
Dec 31, 2023