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.