Valaris Ltd (VAL)
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 | 455,000 | 369,100 | 306,600 | 177,100 | 126,300 | 117,700 | 173,800 | 304,500 | 270,200 | 227,200 | 135,800 | -3,566,400 | -4,413,900 | -4,595,000 | -5,203,200 | -2,636,300 | -4,801,800 | -4,656,600 | -4,139,300 | -2,588,000 |
| Interest expense (ttm) | US$ in thousands | 84,800 | 84,400 | 81,400 | 75,500 | 68,900 | 57,700 | 50,000 | 44,900 | 45,300 | 46,500 | 46,100 | 43,500 | 33,300 | 23,000 | 71,500 | 178,700 | 605,700 | 1,032,600 | 1,081,400 | 1,158,400 |
| Interest coverage | 5.37 | 4.37 | 3.77 | 2.35 | 1.83 | 2.04 | 3.48 | 6.78 | 5.96 | 4.89 | 2.95 | -81.99 | -132.55 | -199.78 | -72.77 | -14.75 | -7.93 | -4.51 | -3.83 | -2.23 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $455,000K ÷ $84,800K
= 5.37
Valaris Ltd has shown a decreasing trend in its interest coverage ratio over the period from March 2020 to December 2024. The interest coverage ratio indicates the company's ability to meet its interest obligations with its operating income.
Initially, from March 2020 to December 2021, the company had negative interest coverage ratios, indicating that its operating income was insufficient to cover its interest expenses. The situation worsened significantly in the later part of this period, with the ratio reaching as low as -199.78 in September 2021.
Subsequently, there was a marked improvement in the interest coverage ratio starting from June 2022, turning positive at 2.95. The positive trend continued with further increases in the ratio, reaching 5.37 by December 2024. This suggests that the company's operating income has strengthened relative to its interest expenses, indicating a healthier financial position.
Overall, the significant improvement in Valaris Ltd's interest coverage ratio from negative values to positive values reflects a turnaround in its ability to meet its interest obligations, signaling a positive trend in its financial performance.
Peer comparison
Dec 31, 2024