Volatile Profitability MarginsHistoric negative gross margins and ongoing margin volatility undermine earnings predictability. In a business with high fixed processing costs, margin swings from commodity prices or recovery rates can materially affect operating cash flow and the ability to sustain investment or dividend policies over the medium term.
Declining Free Cash Flow RecentlyA drop in free cash flow in the latest year reduces internal funding for capex, working capital and deleveraging. Even with healthy operating cash to income ratios, sustained FCF weakness would constrain strategic investments, heighten reliance on external finance, and limit buffer in downturns.
Sensitivity To Regulatory And Commodity PolicyEarnings are structurally exposed to government policies on cane pricing, sugar releases and ethanol blending/tenders. Policy shifts can alter product economics and mandated offtakes for months, creating persistent uncertainty in volumes, pricing and margin sustainability across planning horizons.