Norwegian Cruise Line Holdings Ltd (NCLH)
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 | 1,497,299 | 1,297,616 | 1,179,499 | 1,094,200 | 888,432 | 524,068 | -168,473 | -829,777 | -1,520,296 | -1,859,710 | -2,390,327 | -2,573,128 | -2,428,395 | -2,356,216 | -2,213,293 | -2,243,519 | -1,906,935 | -1,166,633 | -103,006 | 819,120 |
| Interest expense (ttm) | US$ in thousands | 747,223 | 769,246 | 775,231 | 774,451 | 727,531 | 707,270 | 678,399 | 645,084 | 801,512 | 1,574,412 | 1,583,287 | 1,576,169 | 2,072,925 | 1,282,110 | 1,260,569 | 1,237,847 | 482,313 | 396,315 | 316,839 | 268,271 |
| Interest coverage | 2.00 | 1.69 | 1.52 | 1.41 | 1.22 | 0.74 | -0.25 | -1.29 | -1.90 | -1.18 | -1.51 | -1.63 | -1.17 | -1.84 | -1.76 | -1.81 | -3.95 | -2.94 | -0.33 | 3.05 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,497,299K ÷ $747,223K
= 2.00
The interest coverage ratio for Norwegian Cruise Line Holdings Ltd indicates the company's ability to meet its interest obligations with its operating income. A ratio below 1 means that the company is not generating enough operating income to cover its interest expenses.
From the data provided, we see that the interest coverage ratio for the company was consistently negative from June 2020 to March 2023, indicating significant financial stress and an inability to cover interest costs from operating earnings. However, starting from September 2023, the interest coverage ratio turned positive and showed a gradual improvement over the following quarters.
The positive trend observed from September 2023 to December 2024 indicates that Norwegian Cruise Line Holdings Ltd's operating income is becoming more sufficient to cover its interest expenses, reflecting a potentially improving financial position. It suggests that the company's ability to meet its interest obligations has strengthened, which may be a positive sign for investors and creditors. Continued monitoring of the interest coverage ratio would be important to assess the company's ongoing financial health and ability to manage its debt effectively.
Peer comparison
Dec 31, 2024