Phibro Animal Health Corporation (PAHC)
Interest coverage
Jun 30, 2025 | Mar 31, 2025 | 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 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 98,538 | 86,569 | 68,447 | 70,499 | 43,110 | 57,317 | 56,492 | 56,325 | 79,606 | 64,782 | 64,511 | 70,963 | 71,891 | 75,785 | 76,366 | 73,960 | 75,036 | 74,847 | 76,034 | 75,920 |
Interest expense (ttm) | US$ in thousands | 34,602 | 40,072 | 36,268 | 36,470 | 37,513 | 36,687 | 35,296 | 32,856 | 28,547 | 22,795 | 17,193 | 14,243 | 13,270 | 13,408 | 14,191 | 12,863 | 11,226 | 10,669 | 11,249 | 12,538 |
Interest coverage | 2.85 | 2.16 | 1.89 | 1.93 | 1.15 | 1.56 | 1.60 | 1.71 | 2.79 | 2.84 | 3.75 | 4.98 | 5.42 | 5.65 | 5.38 | 5.75 | 6.68 | 7.02 | 6.76 | 6.06 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $98,538K ÷ $34,602K
= 2.85
The analysis of Phibro Animal Health Corporation’s interest coverage ratio over the specified period reveals a notable declining trend from September 30, 2020, through March 31, 2025. Initially, the ratio was relatively strong at 6.06 in September 2020, indicating that the company's earnings before interest and taxes (EBIT) significantly exceeded its interest expenses. The ratio peaked at 7.02 in March 2021, suggesting improved earnings capacity during that period.
Subsequently, a gradual decrease became evident. The ratio declined steadily, reaching approximately 5.75 by September 2021 and further dropping to 3.75 by December 2022. This signifies a diminishing ability of the company's operating income to cover its interest obligations, although it still maintained coverage above 1.5 times up to this point.
The downward trend accelerated from December 2022 onward, with the ratio falling to 2.84 by March 2023 and continuing downward to a low of 1.15 by June 2024. Values below 2 generally suggest increasing financial stress and reduced buffer to meet interest expenses comfortably. The ratios during this period imply the company's earnings have become comparatively tighter in relation to its interest obligations.
In the most recent periods, there is a slight improvement, with the ratio rising to 1.93 in September 2024, indicating some alleviation in interest coverage. However, it remains below 2, which continues to signal a precarious position regarding sufficient earnings to comfortably cover interest costs. The projections into the future—if realized—show an expected increase to 2.16 in March 2025 and further to 2.85 in June 2025, suggesting some anticipated recovery in the company's ability to service its interest obligations, although the ratios still reflect tighter coverage compared to initial years.
Overall, the trend indicates a continued decline in interest coverage over the analyzed period, pointing toward potential financial concerns regarding the company's ability to generate sufficient earnings to meet interest payments without strain. The gradual decline highlights the importance of monitoring operational performance and debt management strategies moving forward.
Peer comparison
Jun 30, 2025