LyondellBasell Industries NV (LYB)

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	1,993,000	3,171,000	3,350,000	3,044,000	3,190,000	3,223,000	2,979,000	4,101,000	4,938,000	5,838,000	7,344,000	7,759,000	7,179,000	7,011,000	5,369,000	3,170,000	2,387,000	2,100,000	2,627,000	3,472,000
Interest expense (ttm)	US$ in thousands	481,000	486,000	493,000	488,000	477,000	441,000	386,000	329,000	287,000	355,000	411,000	483,000	519,000	556,000	552,000	547,000	526,000	424,000	388,000	344,000
Interest coverage		4.14	6.52	6.80	6.24	6.69	7.31	7.72	12.47	17.21	16.45	17.87	16.06	13.83	12.61	9.73	5.80	4.54	4.95	6.77	10.09

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,993,000K ÷ $481,000K
= 4.14

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.

Based on the provided data for LyondellBasell Industries NV, we observe fluctuations in the interest coverage ratio over the period. The interest coverage ratio was at its highest in the most recent quarter, December 31, 2022, with a ratio of 17.21. This signifies that the company's earnings were sufficient to cover its interest payments over 17 times.

However, there has been a decline in the interest coverage ratio since then. As of June 30, 2024, the interest coverage ratio stands at 6.80, indicating a decrease in the company's ability to cover interest expenses compared to the previous periods.

It is worth noting that the interest coverage ratio has fluctuated throughout the period, indicating changes in the company's profitability and debt servicing abilities. A consistently high interest coverage ratio is generally preferred by investors and creditors as it implies lower financial risk. Management should monitor the interest coverage ratio closely to ensure the company's financial health and sustainability.