HomeCo Daily Needs REIT (ASX:HDN) Interest Coverage : 3.32 (As of Dec. 2023)

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What is HomeCo Daily Needs REIT Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. HomeCo Daily Needs REIT's Operating Income for the six months ended in Dec. 2023 was A$120.5 Mil. HomeCo Daily Needs REIT's Interest Expense for the six months ended in Dec. 2023 was A$-36.3 Mil. HomeCo Daily Needs REIT's interest coverage for the quarter that ended in Dec. 2023 was 3.32. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for HomeCo Daily Needs REIT's Interest Coverage or its related term are showing as below:

ASX:HDN' s Interest Coverage Range Over the Past 10 Years
Min: 3.43 Med: 4.9 Max: 5.77
Current: 3.43

ASX:HDN's Interest Coverage is ranked better than
57.34% of 668 companies
in the REITs industry
Industry Median: 2.945 vs ASX:HDN: 3.43

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

HomeCo Daily Needs REIT Interest Coverage Historical Data

The historical data trend for HomeCo Daily Needs REIT's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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HomeCo Daily Needs REIT Interest Coverage Chart

HomeCo Daily Needs REIT Annual Data

Trend

Jun22

Jun23

Interest Coverage

5.77

4.03

HomeCo Daily Needs REIT Semi-Annual Data
	Dec21	Jun22	Dec22	Jun23	Dec23
Interest Coverage	4.18	6.69	4.69	3.55	3.32

Competitive Comparison of HomeCo Daily Needs REIT's Interest Coverage

For the REIT - Retail subindustry, HomeCo Daily Needs REIT's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

HomeCo Daily Needs REIT's Interest Coverage Distribution in the REITs Industry

For the REITs industry and Real Estate sector, HomeCo Daily Needs REIT's Interest Coverage distribution charts can be found below:

* The bar in red indicates where HomeCo Daily Needs REIT's Interest Coverage falls into.

HomeCo Daily Needs REIT Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

HomeCo Daily Needs REIT's Interest Coverage for the fiscal year that ended in Jun. 2023 is calculated as

Here, for the fiscal year that ended in Jun. 2023, HomeCo Daily Needs REIT's Interest Expense was A$-58.2 Mil. Its Operating Income was A$234.4 Mil. And its Long-Term Debt & Capital Lease Obligation was A$1,643.3 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jun. 2023 )	/	Interest Expense (A: Jun. 2023 )
	=	-1	*	234.4	/	-58.2
	=	4.03

HomeCo Daily Needs REIT's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the six months ended in Dec. 2023, HomeCo Daily Needs REIT's Interest Expense was A$-36.3 Mil. Its Operating Income was A$120.5 Mil. And its Long-Term Debt & Capital Lease Obligation was A$1,627.2 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	120.5	/	-36.3
	=	3.32

The higher the ratio, the stronger the company's Financial Strength is.

HomeCo Daily Needs REIT (ASX:HDN) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

HomeCo Daily Needs REIT Interest Coverage Related Terms

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HomeCo Daily Needs REIT (ASX:HDN) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » HomeCo Daily Needs REIT (ASX:HDN) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

1 Macquarie Place, Level 7, Gateway, Sydney, NSW, AUS, 2000

Website

https://www.home-co.com.au

HomeCo Daily Needs REIT, or HomeCo, is an externally managed property trust run by HMC Capital which also runs HealthCo Healthcare and Wellness REIT and unlisted funds. HomeCo targets 50% of assets in neighbourhood malls, 30% large-format, and 20% in health and services. After merging with Aventus Retail REIT in 2022, HomeCo is overweight large-format (just under half its portfolio) and underweight neighbourhood (one third of the portfolio), with health and services slightly below target. The plan is to move back to the target via redevelopment and tenant remixing, and potentially acquisitions. HomeCo seeks tenant leases before commencing developments, so we expect development opportunities will arise gradually, as population growth adds demand in HomeCo's catchments.

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