High Leverage And Reliance On Debt FinancingMaterial reliance on debt raises refinancing and interest-rate sensitivity risks for a capital‑intensive utility. High leverage constrains financial flexibility for future capex, makes regulatory or tariff delays more painful, and increases default risk if cash flow recovery is interrupted.
Negative Free Cash Flow Driven By Heavy CapexPersistent negative free cash flow from heavy network capex is structural for transmission/distribution buildouts but limits ability to deleverage, return cash to shareholders, or absorb shocks. Ongoing investment needs can perpetuate FCF deficits for multiple quarters.
Weak Conversion Of Earnings Into CashA poor free‑cash‑flow‑to‑earnings profile signals that reported profits may not be available to service debt or fund distributions. If this conversion gap persists due to capex or working capital, it undermines balance sheet repair and reduces resilience to regulatory or market shifts.