Mercer International Inc (MERC)
Return on total capital
| 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 | -188,774 | -85,116 | 27,033 | 249,896 | 392,368 | 475,068 | 480,100 | 417,905 | 346,583 | 232,236 | 132,217 | 90,696 | 63,729 | -17,993 | -12,095 | 16,651 | 87,180 | 234,244 | 277,697 | 275,980 |
| Long-term debt | US$ in thousands | 1,609,420 | 1,589,780 | 1,403,860 | 1,378,530 | 1,346,510 | 1,339,090 | 1,245,910 | 1,264,520 | 1,237,540 | 1,162,380 | 1,157,870 | 1,197,790 | 1,186,620 | 1,124,200 | 1,114,070 | 1,136,450 | 1,087,930 | 984,087 | 983,644 | 1,007,770 |
| Total stockholders’ equity | US$ in thousands | 635,410 | 665,452 | 733,469 | 822,873 | 838,784 | 720,349 | 752,122 | 768,334 | 694,024 | 627,836 | 604,134 | 567,638 | 601,027 | 550,707 | 494,260 | 462,768 | 550,403 | 591,387 | 646,525 | 620,682 |
| Return on total capital | -8.41% | -3.77% | 1.26% | 11.35% | 17.95% | 23.07% | 24.03% | 20.56% | 17.94% | 12.97% | 7.50% | 5.14% | 3.56% | -1.07% | -0.75% | 1.04% | 5.32% | 14.87% | 17.03% | 16.95% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-188,774K ÷ ($1,609,420K + $635,410K)
= -8.41%
Analyzing Mercer International Inc.'s return on total capital over the past eight quarters reveals a fluctuating trend. In Q4 2023, the return on total capital was -6.88%, indicating that the company's performance was below the cost of capital. This continued the downward trend from the previous quarter, where the return was -3.76%.
In contrast, the company experienced a significant improvement in Q1 2023, with a return on total capital of 11.31%. This positive performance followed a slight increase in Q2 2023, where the return was 1.26%.
Notably, Mercer International Inc. demonstrated robust returns in the earlier quarters of 2022, with returns on total capital ranging from 20.48% to 23.95%. However, the company's return on total capital has since declined, indicating a potential decrease in the efficiency of its capital utilization.
Overall, Mercer International Inc.'s return on total capital has been volatile, with periods of strong performance followed by declines. This highlights the importance of closely monitoring the company's capital allocation strategies to enhance its overall financial performance.