Sabre Corpo (SABR)
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 | 229,183 | -38,989 | -127,120 | -693,374 | -1,094,050 |
| Interest expense | US$ in thousands | 509,643 | 447,878 | 295,231 | 257,818 | 235,091 |
| Interest coverage | 0.45 | -0.09 | -0.43 | -2.69 | -4.65 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $229,183K ÷ $509,643K
= 0.45
Based on the interest coverage ratios provided for Sabre Corpo over the five years from December 31, 2020, to December 31, 2024, it is evident that the company experienced a significant decline in its ability to cover its interest expenses with pre-tax earnings.
The interest coverage ratio, calculated as EBIT (earnings before interest and taxes) divided by interest expense, reflects the company's ability to meet its interest obligations. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
Sabre Corpo's interest coverage ratios deteriorated from -4.65 in 2020 to 0.45 in 2024. The negative ratios in the initial years suggest that the company faced challenges in generating sufficient earnings to cover its interest payments. This raises concerns about the company's financial health and its ability to service its debt obligations.
The gradual improvement in the interest coverage ratio over the five-year period indicates some progress in the company's financial performance. However, the ratio remained below 1 until 2024, indicating that Sabre Corpo continued to operate with a slim margin of safety in meeting its interest obligations.
Overall, the declining trend in Sabre Corpo's interest coverage ratios highlights the importance of closely monitoring the company's financial health and its ability to generate sustainable earnings to cover its interest expenses in the future.
Peer comparison
Dec 31, 2024