Is Kiriacoulis Mediterranean Cruises Shipping (ATH:KYRI) Using Too Much Debt?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. As with many other companies Kiriacoulis Mediterranean Cruises Shipping SA (ATH:KYRI) makes use of debt. But the more important question is: how much risk is that debt creating?

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What Risk Does Debt Bring?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does Kiriacoulis Mediterranean Cruises Shipping Carry?

You can click the graphic below for the historical numbers, but it shows that as of June 2025 Kiriacoulis Mediterranean Cruises Shipping had €5.21m of debt, an increase on €4.69m, over one year. On the flip side, it has €328.1k in cash leading to net debt of about €4.88m.

How Healthy Is Kiriacoulis Mediterranean Cruises Shipping's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Kiriacoulis Mediterranean Cruises Shipping had liabilities of €14.0m due within 12 months and liabilities of €11.9m due beyond that. Offsetting this, it had €328.1k in cash and €6.88m in receivables that were due within 12 months. So it has liabilities totalling €18.7m more than its cash and near-term receivables, combined.

Given this deficit is actually higher than the company's market capitalization of €16.9m, we think shareholders really should watch Kiriacoulis Mediterranean Cruises Shipping's debt levels, like a parent watching their child ride a bike for the first time. In the scenario where the company had to clean up its balance sheet quickly, it seems likely shareholders would suffer extensive dilution. The balance sheet is clearly the area to focus on when you are analysing debt. But you can't view debt in total isolation; since Kiriacoulis Mediterranean Cruises Shipping will need earnings to service that debt. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.

Check out our latest analysis for Kiriacoulis Mediterranean Cruises Shipping

In the last year Kiriacoulis Mediterranean Cruises Shipping had a loss before interest and tax, and actually shrunk its revenue by 45%, to €22m. That makes us nervous, to say the least.

Caveat Emptor

Not only did Kiriacoulis Mediterranean Cruises Shipping's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Its EBIT loss was a whopping €3.2m. Considering that alongside the liabilities mentioned above make us nervous about the company. We'd want to see some strong near-term improvements before getting too interested in the stock. Not least because it had negative free cash flow of €926k over the last twelve months. That means it's on the risky side of things. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For instance, we've identified 3 warning signs for Kiriacoulis Mediterranean Cruises Shipping (2 make us uncomfortable) you should be aware of.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.