Metallus, Inc (MTUS)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	7,100	96,400	97,700	182,600	-48,500
Interest expense	US$ in thousands	2,500	2,700	3,900	6,200	12,600
Interest coverage		2.84	35.70	25.05	29.45	-3.85

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $7,100K ÷ $2,500K
= 2.84

Interest coverage ratio is a key financial metric that indicates a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally considered better as it suggests that the company is more capable of meeting its interest obligations.

Looking at the trend of Metallus, Inc's interest coverage ratio over the past five years, there are fluctuations in the ratio from -3.85 in 2020 to 29.45 in 2021, 25.05 in 2022, 35.70 in 2023, and a notable decrease to 2.84 in 2024.

The negative interest coverage ratio of -3.85 in 2020 indicates that the company's operating income was insufficient to cover its interest expenses during that period, raising concerns about its financial health and ability to meet debt obligations.

However, the significant improvement to 29.45 in 2021, coupled with stable ratios in subsequent years (25.05, 35.70), reflects a positive trend in Metallus, Inc's ability to cover its interest expenses comfortably with its operating income.

The notable decline in the interest coverage ratio to 2.84 in 2024 could signal potential financial distress or increased financial risk for the company. It suggests that the company may be facing challenges in meeting its interest obligations with its current level of operating income.

Overall, it is essential for stakeholders and investors to closely monitor Metallus, Inc's interest coverage ratio, particularly in light of the fluctuations observed in recent years, to assess the company's financial stability and debt repayment capacity.