Nabors Industries Ltd (NBR)
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 | 247,927 | 252,721 | -110,830 | -342,175 | -542,081 |
| Interest expense | US$ in thousands | 210,864 | 185,285 | 177,895 | 171,476 | 206,274 |
| Interest coverage | 1.18 | 1.36 | -0.62 | -2.00 | -2.63 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $247,927K ÷ $210,864K
= 1.18
The interest coverage ratio of Nabors Industries Ltd shows a fluctuating trend over the years.
In December 31, 2020, the interest coverage ratio was -2.63, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expense.
By December 31, 2021, the ratio improved slightly to -2.00 but still remained negative, suggesting continued strain on the company's ability to meet its interest obligations.
In December 31, 2022, the interest coverage ratio deteriorated further to -0.62, indicating a worsening financial position where the company's EBIT was significantly lower than its interest expenses.
However, there was a positive turnaround by December 31, 2023, with the interest coverage ratio improving to 1.36. This improvement suggests that the company's EBIT has become sufficient to cover its interest costs, albeit with limited margin of safety.
In December 31, 2024, the interest coverage ratio slightly decreased to 1.18, still indicating that the company's earnings are able to cover its interest charges, but the margin has narrowed compared to the previous year.
Overall, the fluctuating nature of the interest coverage ratio indicates varying levels of financial leverage and ability to service debt over the years, highlighting the importance of monitoring the company's financial health and operational performance in the future.
Peer comparison
Dec 31, 2024