MP Materials Corp (MP)
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 | -83,861 | -62,688 | -37,548 | 18,164 | 38,329 | 106,298 | 194,713 | 278,375 | 346,938 | 355,695 | 324,550 | 262,553 | 169,099 | 119,617 | 81,642 | -15,416 | -34,452 | -40,532 | -54,839 | 679 |
| Interest expense (ttm) | US$ in thousands | 23,010 | 17,355 | 12,105 | 6,752 | 5,254 | 5,478 | 5,306 | 5,240 | 5,786 | 6,942 | 8,342 | 9,655 | 8,904 | 7,844 | 6,933 | 5,360 | 5,009 | 3,582 | 1,869 | 803 |
| Interest coverage | -3.64 | -3.61 | -3.10 | 2.69 | 7.30 | 19.40 | 36.70 | 53.12 | 59.96 | 51.24 | 38.91 | 27.19 | 18.99 | 15.25 | 11.78 | -2.88 | -6.88 | -11.32 | -29.34 | 0.85 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-83,861K ÷ $23,010K
= -3.64
MP Materials Corp's interest coverage ratio has shown significant fluctuations over the period from March 31, 2020, to December 31, 2024. The ratios were consistently below 1 for the first seven quarters, indicating that the company did not generate sufficient operating income to cover its interest expenses during this period.
However, starting from June 30, 2021, the interest coverage ratio improved substantially, reaching positive levels. This improvement continued through December 31, 2022, indicating that MP Materials Corp was able to comfortably cover its interest obligations with operating income during this period.
From March 31, 2023, the interest coverage ratio started to decline, indicating a potential decrease in the company's ability to cover interest expenses with operating income. By December 31, 2024, the interest coverage ratio had turned negative again, suggesting a worsening financial situation where operating income was insufficient to cover interest payments.
Overall, the analysis of MP Materials Corp's interest coverage ratio highlights a period of improvement in covering interest expenses followed by a subsequent decline, indicating fluctuations in the company's financial performance and potentially signaling financial challenges ahead.
Peer comparison
Dec 31, 2024