MDU Resources Group Inc (MDU)

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	590,450	665,246	717,255	597,387	577,010	462,895	485,941	537,475	561,035	589,774	602,747	604,190	571,313	546,291	531,898	481,326	497,320	479,345	427,921	405,633
Interest expense (ttm)	US$ in thousands	128,375	157,606	145,673	138,401	125,641	88,403	91,596	95,790	93,983	93,610	93,982	95,419	96,519	97,625	99,122	99,733	98,587	96,506	92,203	87,574
Interest coverage		4.60	4.22	4.92	4.32	4.59	5.24	5.31	5.61	5.97	6.30	6.41	6.33	5.92	5.60	5.37	4.83	5.04	4.97	4.64	4.63

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $590,450K ÷ $128,375K
= 4.60

The interest coverage ratio for MDU Resources Group Inc has shown some fluctuations over the past eight quarters. The ratio has remained above 3 in all periods, indicating that the company's earnings before interest and taxes (EBIT) are sufficient to cover its interest expenses.

In Q1 2022, the interest coverage ratio was the highest at 5.39, suggesting a comfortable margin of safety in meeting interest obligations. Subsequently, the ratio decreased but remained relatively stable around 4.0 in the following quarters of 2022 and the first two quarters of 2023.

While a declining trend in the interest coverage ratio may raise some concerns, it is important to note that the ratio has stayed above the threshold of 3, which generally indicates a healthy level of interest coverage. However, management should continue monitoring the trend to ensure the company's ability to meet interest payments remains robust.