MSA Safety (MSA)

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	411,896	396,613	377,922	380,948	373,473	335,229	320,923	275,341	239,137	87,256	58,123	42,648	47,440	162,310	179,758	193,649	208,507	222,239	233,091	235,771
Interest expense (ttm)	US$ in thousands	36,889	39,141	42,486	45,997	46,733	44,651	38,115	29,518	21,660	17,069	14,871	12,465	10,758	9,372	7,913	8,200	9,433	10,408	12,362	14,373
Interest coverage		11.17	10.13	8.90	8.28	7.99	7.51	8.42	9.33	11.04	5.11	3.91	3.42	4.41	17.32	22.72	23.62	22.10	21.35	18.86	16.40

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $411,896K ÷ $36,889K
= 11.17

The interest coverage ratio of MSA Safety has shown variability over the reporting periods under review. The ratio has generally been healthy, starting at a level of 16.40 in March 2020 and steadily increasing to reach a peak of 23.62 in March 2021. However, from September 2021 onwards, there has been a noticeable decline in the interest coverage ratio, dropping to 4.41 by December 2021 and remaining relatively low in subsequent periods.

This declining trend in the interest coverage ratio indicates that the company may be facing challenges in terms of generating sufficient operating income to cover its interest expenses. While there was a slight improvement in the ratio in the following quarters, it remained relatively low compared to the earlier periods.

Investors and creditors closely monitor the interest coverage ratio as it provides insight into a company's ability to meet its interest payment obligations. A decreasing trend in this ratio could raise concerns about the company's financial health and its ability to service its debt obligations effectively. It would be advisable for MSA Safety to closely monitor and address factors impacting its interest coverage ratio to ensure long-term financial stability and sustainability.