Poor Cash ConversionNegative operating and free cash flow despite strong reported profits signals weak earnings-to-cash conversion. For an ETO business with milestone billing, this raises lasting liquidity risk, pressures working capital, could constrain project bidding and may require external financing if not remediated.
Revenue Cyclicality And ConcentrationDependence on capital spending by refineries, petrochemical and related industries creates structural revenue cyclicality and order concentration risk. Prolonged capex downturns or delayed EPC awards can materially reduce backlog and utilization given long project timelines and ETO exposure.
Rising Liabilities To MonitorAlthough leverage is low today, the reported increase in total liabilities is a structural warning sign. Growing payables or short-term borrowings to fund projects could compress liquidity, raise refinancing and covenant risk, and limit flexibility if project cashflows remain volatile.