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Scatec ASA (OSTO:SSOO) Financial Strength : 3 (As of Mar. 2024)


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What is Scatec ASA Financial Strength?

Scatec ASA has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Warning Sign:

Scatec ASA displays poor financial strength. Usually, this is caused by too much debt for the company.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Scatec ASA's Interest Coverage for the quarter that ended in Mar. 2024 was 0.85. Scatec ASA's debt to revenue ratio for the quarter that ended in Mar. 2024 was 5.71. As of today, Scatec ASA's Altman Z-Score is 0.49.


Competitive Comparison of Scatec ASA's Financial Strength

For the Utilities - Renewable subindustry, Scatec ASA's Financial Strength, along with its competitors' market caps and Financial Strength 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.


Scatec ASA's Financial Strength Distribution in the Utilities - Independent Power Producers Industry

For the Utilities - Independent Power Producers industry and Utilities sector, Scatec ASA's Financial Strength distribution charts can be found below:

* The bar in red indicates where Scatec ASA's Financial Strength falls into.



Scatec ASA Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

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

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:

Scatec ASA's Interest Expense for the months ended in Mar. 2024 was kr-685 Mil. Its Operating Income for the months ended in Mar. 2024 was kr581 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2024 was kr24,392 Mil.

Scatec ASA's Interest Coverage for the quarter that ended in Mar. 2024 is

Interest Coverage=-1*Operating Income (Q: Mar. 2024 )/Interest Expense (Q: Mar. 2024 )
=-1*581/-685
=0.85

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. Scatec ASAs earnings cannot cover its interest expense. If the situation continues, the company may have to issue more debt.

2. Debt to revenue ratio. The lower, the better.

Scatec ASA's Debt to Revenue Ratio for the quarter that ended in Mar. 2024 is

Debt to Revenue Ratio=Total Debt (Q: Mar. 2024 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(3445 + 24392) / 4876
=5.71

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Scatec ASA has a Z-score of 0.49, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 0.49 is in distress zone. This implies bankruptcy possibility in the next two years.

* 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.


Scatec ASA  (OSTO:SSOo) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Scatec ASA has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.


Scatec ASA Financial Strength Related Terms

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Scatec ASA (OSTO:SSOO) Business Description

Traded in Other Exchanges
Address
Askekroken 11, Oslo, NOR, NO-0277
Scatec ASA is an independent solar power producer, delivering an affordable and sustainable source of clean energy worldwide. The business activity functions through Power Production (PP), Services, and Development and Construction (D&C), and Corporate. The PP segment comprises the Kalkbult and Linde plants in South Africa, the ASYV plant in Rwanda, and four plants in the Czech Republic. Its geographical segments are South Africa, Egypt, Malaysia, Honduras, Jordan, Czech Republic, Mozambique, Ukraine, Netherlands, Rwanda and Others.

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