HK Electric Investments and HK Electric Investments (HKSE:02638) Interest Coverage : 3.97 (As of Dec. 2023)

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What is HK Electric Investments and HK Electric Investments 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. HK Electric Investments and HK Electric Investments's Operating Income for the six months ended in Dec. 2023 was HK$2,841 Mil. HK Electric Investments and HK Electric Investments's Interest Expense for the six months ended in Dec. 2023 was HK$-715 Mil. HK Electric Investments and HK Electric Investments's interest coverage for the quarter that ended in Dec. 2023 was 3.97. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. HK Electric Investments and HK Electric Investments Ltd interest coverage is 3.78, which is low.

The historical rank and industry rank for HK Electric Investments and HK Electric Investments's Interest Coverage or its related term are showing as below:

HKSE:02638' s Interest Coverage Range Over the Past 10 Years
Min: 3.78 Med: 5.13 Max: 6.2
Current: 3.78

HKSE:02638's Interest Coverage is ranked better than
50.11% of 445 companies
in the Utilities - Regulated industry
Industry Median: 3.78 vs HKSE:02638: 3.78

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

HK Electric Investments and HK Electric Investments Interest Coverage Historical Data

The historical data trend for HK Electric Investments and HK Electric Investments'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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HK Electric Investments and HK Electric Investments Interest Coverage Chart

HK Electric Investments and HK Electric Investments Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

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4.29

4.34

6.15

4.71

3.78

HK Electric Investments and HK Electric Investments Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Interest Coverage	Get a 7-Day Free Trial															6.84	4.73	4.70	3.57	3.97

Competitive Comparison of HK Electric Investments and HK Electric Investments's Interest Coverage

For the Utilities - Regulated Electric subindustry, HK Electric Investments and HK Electric Investments'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.

HK Electric Investments and HK Electric Investments's Interest Coverage Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, HK Electric Investments and HK Electric Investments's Interest Coverage distribution charts can be found below:

* The bar in red indicates where HK Electric Investments and HK Electric Investments's Interest Coverage falls into.

HK Electric Investments and HK Electric Investments 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.

HK Electric Investments and HK Electric Investments's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, HK Electric Investments and HK Electric Investments's Interest Expense was HK$-1,360 Mil. Its Operating Income was HK$5,145 Mil. And its Long-Term Debt & Capital Lease Obligation was HK$49,448 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	5145	/	-1360
	=	3.78

HK Electric Investments and HK Electric Investments's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the six months ended in Dec. 2023, HK Electric Investments and HK Electric Investments's Interest Expense was HK$-715 Mil. Its Operating Income was HK$2,841 Mil. And its Long-Term Debt & Capital Lease Obligation was HK$49,448 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	2841	/	-715
	=	3.97

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

HK Electric Investments and HK Electric Investments (HKSE:02638) 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 .

HK Electric Investments and HK Electric Investments Interest Coverage Related Terms

Thank you for viewing the detailed overview of HK Electric Investments and HK Electric Investments's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

HK Electric Investments and HK Electric Investments (HKSE:02638) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » HK Electric Investments and HK Electric Investments Ltd (HKSE:02638) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

HKVTY:USA HKCVF:USA HKT:Germany

Address

44 Kennedy Road, Hong Kong Electric Centre, Hong Kong, HKG

Website

https://www.hkelectric.com

HK ELECTRIC INVESTMENTS LIMITED is a fixed single investment trust in Hong Kong with a focus on the power industry. The Company is a vertically integrated power utility and its operations comprise the generation, transmission, distribution and supply of electricity to Hong Kong Island and Lamma Island. Its principal operating subsidiary is The Hongkong Electric Company, Limited (HEC). HEC's sole power generation facility is the Lamma Power Station which has an aggregate installed capacity of approximately 3,700 megawatt (MW). The Company provides electricity to approximately 568,000 registered customers on Hong Kong Island and Lamma Island.

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