Mativ Holdings Inc. (MATV)

Interest coverage

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 Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm) US$ in thousands -196,300 -317,500 74,700 81,200 83,000 82,600 130,300 111,900 125,600 105,200 113,300 129,900 132,700 135,900 136,400 142,200 137,100 123,600 128,700 129,000
Interest expense (ttm) US$ in thousands 84,900 113,900 112,000 104,200 92,200 64,600 65,000 57,700 46,100 39,000 31,500 26,500 30,500 29,300 28,200 35,200 36,100 37,700 38,300 29,800
Interest coverage -2.31 -2.79 0.67 0.78 0.90 1.28 2.00 1.94 2.72 2.70 3.60 4.90 4.35 4.64 4.84 4.04 3.80 3.28 3.36 4.33

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-196,300K ÷ $84,900K
= -2.31

Interest coverage is a financial ratio that indicates a company's ability to meet its interest obligations using its operating income. A higher interest coverage ratio suggests that the company is better positioned to meet its interest expenses.

Based on the data provided for Mativ Holdings Inc, the interest coverage ratio has fluctuated over the past eight quarters. In Q4 2023, the interest coverage ratio was notably low at 0.16, indicating that the company's operating income could only cover a fraction of its interest expenses. This suggests a potential strain on the company's ability to meet interest obligations with its current level of operating income.

In comparison, the interest coverage ratio improved in Q3 2023 and Q2 2023 to 0.71 and 0.59 respectively, but remained below 1, which may still pose concerns about the company's ability to comfortably cover its interest payments.

Looking back further, in Q4 2022, the interest coverage ratio was 0.88, and in Q3 2022 it was 0.85. These ratios were higher compared to the recent quarters but still below the ideal threshold of 1, indicating some level of risk regarding the company's ability to service its debt obligations.

The highest interest coverage ratios were observed in Q2 2022 and Q1 2022 at 1.54 and 1.55 respectively, suggesting a better ability to cover interest payments with operating income during those quarters.

Overall, the trend in Mativ Holdings Inc's interest coverage ratio over the past eight quarters indicates some variability and inconsistency in the company's ability to meet its interest expenses from its operating income. Investors and stakeholders may want to closely monitor this ratio to assess the company's financial stability and debt repayment capacity.


Peer comparison

Dec 31, 2023

Company name
Symbol
Interest coverage
Mativ Holdings Inc.
MATV
-2.31
International Paper
IP
1.80
Sylvamo Corp
SLVM
6.77