PCCW (HKSE:00008) Interest Coverage

: 2.53 (As of Dec. 2023)

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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. PCCW's Operating Income for the six months ended in Dec. 2023 was HK$3,416 Mil. PCCW's Interest Expense for the six months ended in Dec. 2023 was HK$-1,348 Mil. PCCW's interest coverage for the quarter that ended in Dec. 2023 was 2.53. 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. PCCW Ltd interest coverage is 2.1, which is low.

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

HKSE:00008' s Interest Coverage Range Over the Past 10 Years
Min: 2.1 Med: 3.11 Max: 4.3
Current: 2.1

HKSE:00008's Interest Coverage is ranked worse than
74.74% of 289 companies
in the Telecommunication Services industry
Industry Median: 4.65 vs HKSE:00008: 2.10

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

PCCW Interest Coverage Historical Data

The historical data trend for PCCW'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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PCCW Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

2.81

2.94

3.42

2.90

2.10

PCCW 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																4.14	2.53	3.18	1.58	2.53

Competitive Comparison

For the Telecom Services subindustry, PCCW'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.

PCCW Interest Coverage Distribution

For the Telecommunication Services industry and Communication Services sector, PCCW's Interest Coverage distribution charts can be found below:

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

PCCW 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.

PCCW'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, PCCW's Interest Expense was HK$-2,501 Mil. Its Operating Income was HK$5,240 Mil. And its Long-Term Debt & Capital Lease Obligation was HK$52,033 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	5240	/	-2501
	=	2.10

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

Here, for the six months ended in Dec. 2023, PCCW's Interest Expense was HK$-1,348 Mil. Its Operating Income was HK$3,416 Mil. And its Long-Term Debt & Capital Lease Obligation was HK$52,033 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	3416	/	-1348
	=	2.53

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

PCCW (HKSE:00008) 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 .

PCCW Interest Coverage Related Terms

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

PCCW (HKSE:00008) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » PCCW Ltd (HKSE:00008) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

PCWLF:USA PCCWY:USA TH3B:Germany

Address

Taikoo Place, 979 King’s Road, 41st Floor, PCCW Tower, Quarry Bay, Hong Kong, HKG

Website

http://www.pccw.com

PCCW Ltd is a Hong Kong-based company engaged in the businesses of telecommunications, media, information technology solutions, property development and investment, and others. Its operating segments are HKT Limited (HKT), Media Business, and Solutions Business. The entity derives key revenue from the HKT segment, which includes the provision of telecommunications and related services such as local telephony, local data and broadband, international telecommunications, mobile, and other telecommunications businesses such as customer premises equipment sales, outsourcing, consulting, and contact centers. The company operates in Hong Kong, Mainland and other parts of China, Singapore and other countries, of which maximum revenue is derived from the operations in Hong Kong.

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