Ormat Technologies Inc (ORA)

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	149,957	158,367	163,324	171,342	185,061	179,855	282,739	334,629	321,994	315,975	307,341	291,558	334,813	333,752	283,268	257,500	261,853	258,167	297,147	332,059
Interest expense (ttm)	US$ in thousands	134,031	129,249	119,481	110,158	102,821	96,919	94,268	90,293	87,743	86,688	86,516	84,724	82,659	79,012	78,537	79,696	77,953	76,382	74,702	76,434
Interest coverage		1.12	1.23	1.37	1.56	1.80	1.86	3.00	3.71	3.67	3.64	3.55	3.44	4.05	4.22	3.61	3.23	3.36	3.38	3.98	4.34

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $149,957K ÷ $134,031K
= 1.12

Ormat Technologies Inc's interest coverage ratio has shown fluctuating trends over the past five years, ranging from a high of 4.34 in March 2020 to a low of 1.12 in December 2024. Generally, a higher interest coverage ratio indicates the company's stronger ability to meet its interest obligations with its operating income.

The interest coverage ratio declined from 4.34 in March 2020 to 3.36 in December 2020, indicating a slight decrease in the company's ability to cover its interest expenses. This trend continued with a further decrease to 3.23 in March 2021, suggesting potential challenges in meeting interest payments with operating income.

However, there was a slight improvement in the interest coverage ratio in the following quarters, reaching a peak of 4.22 in September 2021. This improvement may have been driven by increased operating income or decreased interest expenses, enhancing the company's ability to cover its interest obligations.

Subsequently, the interest coverage ratio started to decline again, reaching 1.12 in December 2024, which is a cause for concern as it indicates a significant decline in the company's ability to cover its interest expenses.

Overall, Ormat Technologies Inc's interest coverage ratio has shown variability over the past five years, reflecting changes in the company's operational performance and financial position. Monitoring this ratio is crucial for assessing the company's ability to manage its debt and interest obligations effectively.