Pursuit Attractions and Hospitality, Inc. (PRSU)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-31,253	33,241	4,570	-66,757	-342,972
Interest expense	US$ in thousands	14,182	5,963	4,064	28,324	17,887
Interest coverage		-2.20	5.57	1.12	-2.36	-19.17

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-31,253K ÷ $14,182K
= -2.20

The interest coverage ratios of Pursuit Attractions and Hospitality, Inc. over the period from December 31, 2020, to December 31, 2024, reflect significant fluctuations that warrant detailed examination.

In December 2020, the company exhibited a markedly negative interest coverage ratio of -19.17. This indicates that the company's earnings before interest and taxes (EBIT) were substantially insufficient to cover interest expenses, suggesting significant financial strain or operational challenges during this period. Such a high negative ratio typically signals potential liquidity concerns and heightened risk of insolvency if the situation persisted.

By December 31, 2021, the interest coverage ratio improved but remained negative at -2.36. While this marks a substantial enhancement from the previous year, the ratio still indicates that EBIT was insufficient to fully cover interest expenses, although the extent of the shortfall had decreased considerably. This improvement could be reflective of operational recovery, cost management efforts, or a reduction in interest obligations.

In December 2022, the ratio turned positive at 1.12, marking a critical milestone whereby the company's EBIT slightly exceeded its interest expenses. This shift signifies a move toward financial stability, suggesting that the company's operational performance improved enough to comfortably meet interest obligations for the first time in the observed period.

The further strengthening of the ratio to 5.57 by December 31, 2023, indicates a robust capacity to cover interest expenses with EBIT. This level not only demonstrates improved profitability and operational efficiency but also implies a reduced financial risk profile, providing the company with enhanced capacity to service debt and potentially undertake further financial leverage or investments.

However, the subsequent decline to -2.20 in December 2024 suggests a deterioration in the company’s ability to generate sufficient EBIT to cover its interest obligations. The negative ratio indicates that, by this point, earnings had fallen short of interest expenses again, raising concerns about recurring financial vulnerabilities or increased interest burdens.

Overall, the trend in Pursuit Attractions and Hospitality, Inc.’s interest coverage ratios demonstrates a period of significant volatility. The transition from negative to positive ratios signifies improvement in operational performance and financial health, reaching a peak in 2023. Nonetheless, the return to negative territory in 2024 highlights potential ongoing issues that could impact the company’s ability to meet debt commitments, emphasizing the need for continuous monitoring of operational efficiency and profitability metrics.