MDU Resources Group Inc (MDU)
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 | 307,009 | 528,190 | 547,220 | 674,822 | 624,354 | 640,201 | 548,490 | 432,822 | 398,499 | 343,398 | 506,536 | 536,910 | 560,485 | 589,264 | 602,488 | 604,089 | 571,636 | 546,377 | 530,538 | 481,147 |
| Interest expense (ttm) | US$ in thousands | 108,348 | 118,481 | 121,115 | 119,006 | 128,300 | 131,100 | 130,369 | 131,969 | 119,229 | 108,529 | 100,560 | 95,860 | 94,053 | 93,653 | 93,953 | 95,353 | 96,500 | 97,600 | 99,100 | 99,700 |
| Interest coverage | 2.83 | 4.46 | 4.52 | 5.67 | 4.87 | 4.88 | 4.21 | 3.28 | 3.34 | 3.16 | 5.04 | 5.60 | 5.96 | 6.29 | 6.41 | 6.34 | 5.92 | 5.60 | 5.35 | 4.83 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $307,009K ÷ $108,348K
= 2.83
MDU Resources Group Inc's interest coverage ratio demonstrates the company's ability to meet its interest obligations with its operating income. The interest coverage ratio has shown fluctuations over the reporting periods, starting at 4.83 on March 31, 2020, and reaching a peak of 6.41 on June 30, 2021, before gradually declining to 2.83 on December 31, 2024.
The ratios above 1 indicate that MDU Resources Group Inc has sufficient operating income to cover its interest expenses. A higher interest coverage ratio is generally preferred as it signifies that the company is at lower risk of defaulting on its debt obligations. However, a declining trend in the interest coverage ratio, as seen in the later reporting periods, could be a cause for concern as it may indicate increasing financial leverage or declining profitability.
It is essential for investors and creditors to closely monitor MDU Resources Group Inc's interest coverage ratio to assess the company's ability to meet its debt obligations and manage financial risk effectively. Fluctuations in the interest coverage ratio could signal changes in the company's financial health and operational performance, highlighting the need for further analysis and scrutiny.
Peer comparison
Dec 31, 2024