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.