Sinopec Oilfield Service (SHSE:600871) Interest Coverage : 2.34 (As of Mar. 2024)

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What is Sinopec Oilfield Service 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. Sinopec Oilfield Service's Operating Income for the three months ended in Mar. 2024 was ¥405 Mil. Sinopec Oilfield Service's Interest Expense for the three months ended in Mar. 2024 was ¥-173 Mil. Sinopec Oilfield Service's interest coverage for the quarter that ended in Mar. 2024 was 2.34. 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. Sinopec Oilfield Service Corp interest coverage is 1.41, which is low.

The historical rank and industry rank for Sinopec Oilfield Service's Interest Coverage or its related term are showing as below:

SHSE:600871' s Interest Coverage Range Over the Past 10 Years
Min: 1.41 Med: 1.93 Max: 4.07
Current: 1.41

SHSE:600871's Interest Coverage is ranked worse than
87.09% of 759 companies
in the Oil & Gas industry
Industry Median: 6.79 vs SHSE:600871: 1.41

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

Sinopec Oilfield Service Interest Coverage Historical Data

The historical data trend for Sinopec Oilfield Service'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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Sinopec Oilfield Service Interest Coverage Chart

Sinopec Oilfield Service Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

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2.08

1.68

1.52

1.89

1.56

Sinopec Oilfield Service Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Interest Coverage	Get a 7-Day Free Trial															3.06	0.99	1.85	0.65	2.34

Competitive Comparison of Sinopec Oilfield Service's Interest Coverage

For the Oil & Gas Drilling subindustry, Sinopec Oilfield Service'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.

Sinopec Oilfield Service's Interest Coverage Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Sinopec Oilfield Service's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Sinopec Oilfield Service's Interest Coverage falls into.

Sinopec Oilfield Service 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.

Sinopec Oilfield Service'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, Sinopec Oilfield Service's Interest Expense was ¥-805 Mil. Its Operating Income was ¥1,253 Mil. And its Long-Term Debt & Capital Lease Obligation was ¥636 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	1252.879	/	-805.017
	=	1.56

Sinopec Oilfield Service's Interest Coverage for the quarter that ended in Mar. 2024 is calculated as

Here, for the three months ended in Mar. 2024, Sinopec Oilfield Service's Interest Expense was ¥-173 Mil. Its Operating Income was ¥405 Mil. And its Long-Term Debt & Capital Lease Obligation was ¥757 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Mar. 2024 )	/	Interest Expense (Q: Mar. 2024 )
	=	-1	*	404.993	/	-172.872
	=	2.34

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

Sinopec Oilfield Service (SHSE:600871) 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 .

Sinopec Oilfield Service Interest Coverage Related Terms

Thank you for viewing the detailed overview of Sinopec Oilfield Service's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Sinopec Oilfield Service (SHSE:600871) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Sinopec Oilfield Service Corp (SHSE:600871) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

YZCFF:USA 01033:Hong Kong YIZH:Germany

Address

No. 9 Jishikou Road, Changyang District, Beijing, CHN, 100728

Website

https://ssc.sinopec.com

Sinopec Oilfield Service Corp engages in the provision of onshore and offshore oil and natural gas, exploration, provision of contracting, design, and construction services for the oil and gas projects. It operates through five segments: Geophysics, which provides technical and development, exploration geophysical services; Drilling engineering segment, which provides drilling design, and construction, technical services; Logging and mud logging segment; Special downhole segment, which provides oil engineering technical and construction services; and Engineering construction segment, which provides a package of services, including feasibility studies, procurement, and others. Its geographical segments are, The PRC, Middle East and Other countries.

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