Norwegian Cruise Line Holdings Ltd (NCLH)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	890,676	591,816	-68,560	-666,062	-1,476,703	-1,285,456	-1,820,781	-2,022,943	-2,401,319	-3,128,163	-2,955,756	-2,855,606	-3,338,236	-2,871,702	-1,708,371	-804,279	1,178,077	1,188,281	1,226,833	1,210,304
Interest expense (ttm)	US$ in thousands	727,500	802,418	802,318	801,814	800,000	2,079,556	2,083,723	2,088,235	2,100,001	510,162	518,105	611,341	653,215	484,878	455,676	341,465	272,900	69,164	138,386	211,048
Interest coverage		1.22	0.74	-0.09	-0.83	-1.85	-0.62	-0.87	-0.97	-1.14	-6.13	-5.70	-4.67	-5.11	-5.92	-3.75	-2.36	4.32	17.18	8.87	5.73

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $890,676K ÷ $727,500K
= 1.22

Based on the interest coverage ratios of Norwegian Cruise Line Holdings Ltd over the past eight quarters, we observe fluctuations in the company's ability to cover its interest expenses with its operating income.

In Q4 2023, the interest coverage ratio was 1.28, indicating that the company earned 1.28 times the amount needed to cover its interest payments. This suggests a relatively stronger ability to meet interest obligations compared to the previous two quarters, Q3 2023 (0.74) and Q2 2023 (-0.27).

However, looking back further, we see that the company faced significant challenges in Q1 2023 and Q4 2022, with interest coverage ratios of -1.32 and -1.94, respectively. A negative interest coverage ratio implies that the company's operating income was insufficient to cover its interest expenses during those periods.

Overall, the trend in interest coverage ratios for Norwegian Cruise Line Holdings Ltd shows inconsistency and volatility, with periods of both improvement and deterioration. It is essential for the company to maintain a healthy interest coverage ratio to demonstrate its ability to meet debt obligations and sustain financial stability.