Metallus Inc (MTUS)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 99,100 | 101,000 | 182,900 | -48,100 | -110,400 |
| Interest expense | US$ in thousands | 2,700 | 3,900 | 6,200 | 12,600 | 15,700 |
| Interest coverage | 36.70 | 25.90 | 29.50 | -3.82 | -7.03 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $99,100K ÷ $2,700K
= 36.70
Interest coverage ratio reflects the ability of Metallus Inc to meet its interest expenses with its operating income. Over the past five years, Metallus Inc has exhibited a fluctuating trend in its interest coverage ratio.
In 2023, the interest coverage ratio improved significantly to 36.70, indicating that the company's operating income was 36.70 times higher than its interest expenses for that year. This suggests a strong ability to service debt obligations.
In 2022 and 2021, the interest coverage ratios were 25.90 and 29.50 respectively, showing a steady performance in covering interest expenses comfortably with operating income.
However, in 2020 and 2019, the interest coverage ratios were negative, at -3.82 and -7.03 respectively. A negative interest coverage ratio implies that the company's operating income was insufficient to cover its interest expenses during those years, raising concerns about Metallus Inc's financial health and ability to meet its debt obligations.
Overall, while the recent improvement in the interest coverage ratio is a positive sign, the negative ratios in earlier years indicate past financial challenges for Metallus Inc. It will be important for the company to maintain a sustainable interest coverage ratio moving forward to ensure financial stability and the ability to meet its debt obligations.
Peer comparison
Dec 31, 2023