Sotera Health Co (SHC)
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 | 266,744 | 198,339 | 166,929 | 181,154 | 160,804 | -202,572 | -185,503 | -187,740 | -165,501 | 256,149 | 250,065 | 271,758 | 251,093 | 232,741 | 228,128 | 213,733 | 221,272 | 211,812 | 198,253 | 184,356 |
| Interest expense (ttm) | US$ in thousands | 164,691 | 150,052 | 149,107 | 139,447 | 126,546 | 132,494 | 115,294 | 98,610 | 80,144 | 63,482 | 58,195 | 63,314 | 74,192 | 106,702 | 143,892 | 179,979 | 215,259 | 210,393 | 194,414 | 139,164 |
| Interest coverage | 1.62 | 1.32 | 1.12 | 1.30 | 1.27 | -1.53 | -1.61 | -1.90 | -2.07 | 4.03 | 4.30 | 4.29 | 3.38 | 2.18 | 1.59 | 1.19 | 1.03 | 1.01 | 1.02 | 1.32 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $266,744K ÷ $164,691K
= 1.62
The interest coverage ratio of Sotera Health Co has shown fluctuations over the past four years. Starting from March 31, 2020, the company had an interest coverage ratio of 1.32, which indicates that its operating income was just sufficient to cover its interest expenses.
Subsequently, the interest coverage ratio decreased to 1.02 by June 30, 2020, and further declined to 1.01 by September 30, 2020, indicating a potential strain on the company's ability to cover its interest payments with its operating income alone.
However, starting from December 31, 2020, the interest coverage ratio began to improve, reaching a peak of 4.30 by June 30, 2022, indicating a significant increase in the company's ability to cover its interest expenses.
There was a sharp decline in the interest coverage ratio by December 31, 2022, and a negative interest coverage ratio observed in the subsequent quarters until March 31, 2023. This negative ratio suggests that the company's operating income was insufficient to cover its interest expenses during these periods.
The interest coverage ratio recovered from the negative territory and gradually improved, reaching 1.62 by December 31, 2024. Overall, the trend of the interest coverage ratio for Sotera Health Co has been volatile, indicating fluctuations in its ability to meet interest obligations from operating income during the period under review.
Peer comparison
Dec 31, 2024