Heriot REIT (JSE:HET) Interest Coverage : 1.81 (As of Dec. 2023)

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What is Heriot 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. Heriot REIT's Operating Income for the six months ended in Dec. 2023 was R350.4 Mil. Heriot REIT's Interest Expense for the six months ended in Dec. 2023 was R-193.1 Mil. Heriot REIT's interest coverage for the quarter that ended in Dec. 2023 was 1.81. 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. Heriot REIT Ltd interest coverage is 1.8, which is low.

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

JSE:HET' s Interest Coverage Range Over the Past 10 Years
Min: 1.8 Med: 2.33 Max: 2.7
Current: 1.8

JSE:HET's Interest Coverage is not ranked
in the REITs industry.
Industry Median: 2.945 vs JSE:HET: 1.80

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

Heriot REIT Interest Coverage Historical Data

The historical data trend for Heriot 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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Heriot REIT Interest Coverage Chart

Heriot REIT Annual Data

Trend

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Interest Coverage

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2.33

2.25

2.70

2.54

1.89

Heriot REIT Semi-Annual Data
	Nov17	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Interest Coverage	Get a 7-Day Free Trial							2.45	2.63	2.06	1.76	1.81

Competitive Comparison of Heriot REIT's Interest Coverage

For the REIT - Diversified subindustry, Heriot 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.

Heriot REIT's Interest Coverage Distribution in the REITs Industry

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

* The bar in red indicates where Heriot REIT's Interest Coverage falls into.

Heriot 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.

Heriot 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, Heriot REIT's Interest Expense was R-199.6 Mil. Its Operating Income was R377.2 Mil. And its Long-Term Debt & Capital Lease Obligation was R3,229.7 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jun. 2023 )	/	Interest Expense (A: Jun. 2023 )
	=	-1	*	377.214	/	-199.601
	=	1.89

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

Here, for the six months ended in Dec. 2023, Heriot REIT's Interest Expense was R-193.1 Mil. Its Operating Income was R350.4 Mil. And its Long-Term Debt & Capital Lease Obligation was R3,961.0 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	350.388	/	-193.104
	=	1.81

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

Heriot REIT (JSE:HET) 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 .

Heriot REIT Interest Coverage Related Terms

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

Heriot REIT (JSE:HET) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Heriot REIT Ltd (JSE:HET) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

3 Melrose Boulevard, Suite 1, Ground Floor, Melrose Arch, Johannesburg, GT, ZAF, 2196

Website

http://www.heriotreit.com

Heriot REIT Ltd is a South African real estate investment trust. The company owns a portfolio of retail, industrial, office, specialized, residential properties, and others. While the majority of the revenue is earned from Industrial properties. The primary objective of the company is to develop or acquire yield-enhancing assets within Southern Africa to create a stable and diverse portfolio for the purposes of generating capital growth and securing escalating net rental income streams.

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