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