Newmont Corp. (NYSE:NEM)

Debt to Equity

The debt to equity ratio remained relatively stable from March 2020 through December 2021, fluctuating slightly around 0.29. Starting in 2022, a gradual increase occurred, with the ratio reaching 0.33 by March 2024, indicating a moderate rise in financial leverage using debt relative to equity.

Debt to Capital

The debt to capital ratio showed a slight decline from 0.24 in March 2020 to a low of 0.21 by June and September 2021. From late 2021 onwards, there was a steady increase, rising to 0.25 by March 2024. This suggests a modest increase in reliance on debt in the company’s capital structure over time.

Debt to Assets

This ratio remained largely constant throughout the observed period, maintaining levels close to 0.16–0.17. There were no significant changes, implying consistent asset financing proportions involving debt.

Financial Leverage

Financial leverage slightly decreased from 1.82 in March 2020 to a low of 1.75 in June 2021, indicating a minor reduction in total assets relative to equity. However, beginning in late 2021, financial leverage rose steadily, peaking at 2.00 in December 2023 before a slight decline to 1.92 in March 2024. The upward trend late in the period suggests increased use of debt or other liabilities to finance assets relative to equity.

Interest Coverage

Interest coverage showed a pronounced declining trend over time. From a strong coverage of 14.34 in March 2020, it experienced volatility but generally moved downward, falling sharply from 5.65 in December 2021 to negative values by December 2023 and March 2024 (-7.10 and -6.74 respectively). This indicates increasing difficulty covering interest expenses with operating earnings, reaching potentially problematic levels toward the end of the period.

The analysis of the quarterly financial data reveals several notable trends in the company's capital structure over the period observed.

Total Debt

Total debt exhibited relative stability during the initial quarters, fluctuating slightly but remaining near the range of approximately $6.6 billion to $6.7 billion up through the end of 2021. From early 2022 through late 2023, total debt maintained a consistent level around $6.1 billion. However, there is a sharp increase in total debt in the first quarter of 2024, rising markedly to approximately $9.4 billion, representing a considerable increase compared to prior quarters.

Total Stockholders’ Equity

Stockholders’ equity demonstrated a gradual decline from just over $23 billion at the beginning of 2021 to below $19.1 billion by the end of 2023. The reduction in equity appears incremental and continuous across these quarters. In the first quarter of 2024, stockholders’ equity experienced a substantial increase to nearly $29 billion, indicating a significant change in the equity base relative to the prior quarters.

Debt to Equity Ratio

The debt to equity ratio remained relatively low and stable from 2020 through 2023, fluctuating minorly between approximately 0.26 and 0.33. This ratio generally hovered around 0.3, indicating a conservative capital structure with a moderate level of leverage. In the first quarter of 2024, the ratio increased slightly to about 0.33, consistent with the simultaneous increases in both debt and equity levels, though remaining within historical bounds.

Overall, the financial data reflect a period of stable debt and a slow erosion of equity from 2020 through 2023, maintaining a consistent leverage profile. The first quarter of 2024 is marked by pronounced capital structure changes, with a sharp rise in both debt and equity, which may be indicative of significant financial activity such as new financing, equity issuance, or corporate restructuring during that period.

Total Debt

The total debt remained relatively stable between March 2020 and December 2022, fluctuating narrowly between approximately 6,100 and 6,700 million US dollars. This indicates a controlled debt level during this period. However, starting in December 2023, there is a significant increase, with debt rising sharply to about 9,400 million US dollars by the end of March 2024, suggesting a major financing activity or increased borrowing in the most recent quarters.

Total Capital

Total capital experienced a gradual decline from around 29,700 million US dollars at the end of 2020 to approximately 25,500 million US dollars by December 2022. This downward trend shows a reduction in the company's overall capitalization during this timeframe. A notable reversal occurred beginning in December 2023, with total capital increasing sharply to about 38,400 million US dollars by March 2024, indicating possible equity issuance, asset revaluation, or other capital increases in the most recent quarter.

Debt to Capital Ratio

The debt to capital ratio shows relative stability from March 2020 through the end of December 2022, consistently hovering between 0.21 and 0.24. This suggests that despite some fluctuations in debt and capital levels, the company's leverage remained steady in this period. A slight upward adjustment in the leverage ratio is observed starting in December 2022, reaching approximately 0.25 by March 2024. This shift aligns with the increase in total debt and total capital, reflecting a modestly higher leverage position in recent quarters.

Overall Insights

The data reflects a prolonged period of financial stability with controlled leverage in terms of debt and capitalization up until late 2022. The significant increases in both total debt and total capital beginning in late 2023 indicate a substantial change in financial strategy or conditions. The proportionate increase in debt relative to capital results in a slightly higher leverage ratio, implying increased reliance on debt financing in the most recent period. Monitoring the sustainability of this leverage and the underlying reasons for capital expansion will be important going forward.

Total Debt

The total debt level remained relatively stable from March 31, 2020, through December 31, 2022, fluctuating modestly between approximately $6.1 billion and $6.7 billion. Beginning in the first quarter of 2024, there was a notable increase, with debt rising sharply to around $9.4 billion by March 31, 2024. This jump represents a significant change compared to the prior consistent debt levels over the preceding four years.

Total Assets

Total assets exhibited a gradual declining trend from March 31, 2020, through December 31, 2023, decreasing from nearly $39.7 billion to approximately $38.1 billion. However, a marked increase occurred in the first quarter of 2024, with total assets surging to about $55.5 billion, and slightly decreasing to around $55.3 billion by March 31, 2024. This shift contrasts with the previous moderate downward movement observed over the earlier periods.

Debt to Assets Ratio

The debt to assets ratio remained fairly consistent, fluctuating narrowly between 0.15 and 0.17 throughout the period from March 31, 2020, to December 31, 2023. Despite the substantial increases in both debt and assets in early 2024, the ratio only showed a slight rise to around 0.17, suggesting that the increase in debt was roughly proportional to the increase in total assets during this period.

The total assets exhibited a generally stable trend from the first quarter of 2020 through the end of 2023, fluctuating modestly around the range of approximately 38,000 to 41,500 million US dollars. A sharp increase is observed in the first quarter of 2024, where total assets jumped significantly to above 55,000 million US dollars, marking a notable deviation from the previous periods.

Shareholders’ equity showed a gradual decline starting from around 23,000 million US dollars in late 2020 to a low near 19,000 million US dollars by the end of 2023. This decrease suggests a reduction in net assets attributable to equity holders over these quarters. A substantial increase in equity is evident in the first quarter of 2024, rising to roughly 29,000 million US dollars, aligning with the spike in total assets during the same period.

Financial leverage, defined as the ratio of total assets to equity, remained relatively stable, generally hovering near values between 1.75 and 2.0 from 2020 through 2023. The ratio saw a gradual increase towards the end of 2023, peaking around 2.0, which indicates a slightly higher reliance on debt financing relative to equity during this time. In the first quarter of 2024, despite the surge in total assets and equity, financial leverage dipped slightly to approximately 1.91-1.92, suggesting that the increase in equity was proportionally larger than the increase in liabilities.

Total Assets

Stable between 38 billion and 41.5 billion US dollars from 2020 through 2023, followed by a substantial jump over 55 billion US dollars in early 2024.

Shareholders' Equity

Declined gradually from about 23 billion US dollars in 2020 to around 19 billion US dollars by the end of 2023, then experienced a notable rise to nearly 29 billion US dollars in the first quarter of 2024.

Financial Leverage

Maintained between 1.75 and 2.0 for most periods, showing a slight upward trend towards the end of 2023, and decreasing marginally to approximately 1.91-1.92 in the first quarter of 2024.

Overall, the data suggest a period of relative stability in asset size and equity with gradual shifts in capitalization structure through 2023, followed by significant changes in the first quarter of 2024 indicative of a major corporate event or transaction affecting the balance sheet composition.

Earnings before interest and tax (EBIT)

The EBIT values demonstrate notable volatility over the analyzed periods. Initially, EBIT showed a generally positive and increasing trend, peaking at 1,077 million US dollars by the end of 2020. However, commencing in 2021, EBIT experienced significant fluctuations, including a sharp decline to 34 million and even turning negative in certain quarters, reaching as low as -3,002 million US dollars in the last quarter recorded. This indicates substantial operational challenges or extraordinary items impacting earnings during the latter periods. Despite intermittent recoveries, EBIT remains unstable and frequently negative toward the end of the timeline.

Interest expense, net of capitalized interest

Interest expenses reveal a generally declining trend from early 2020 through late 2022, starting around 82 million US dollars and decreasing to approximately 53 million by December 2022. After this period, interest expenses saw some fluctuations, notably increasing to 93 million in the latest quarter. This pattern suggests initial improvements in managing debt costs or reductions in debt levels, followed by a reversal toward the later periods.

Interest coverage ratio

The interest coverage ratio, which measures the ability to cover interest expenses with operating earnings, shows a deteriorating pattern overall. Early periods featured robust coverage ratios, peaking above 16, indicating strong earnings relative to interest obligations. Subsequently, the ratio declined substantially, falling below 2 by the end of 2022 and continuing to weaken dramatically in 2023 and early 2024, ultimately reaching negative values. Negative coverage ratios reflect operating losses inadequate to cover interest expenses, indicating financial stress and potentially heightened risk of default or refinancing needs.

Summary

The combination of volatile and often negative EBIT figures alongside increasing interest expenses in recent quarters has significantly strained interest coverage capacity. The gradual erosion and eventual negative values of the interest coverage ratio underscore deteriorating earnings power relative to debt servicing obligations. This financial profile suggests increasing operational and financial difficulties, necessitating close monitoring of earnings trends and debt management strategies going forward.