Substantial Absolute Debt LevelsHigh absolute debt creates persistent interest and refinancing obligations that can constrain cash flow allocation. In a cyclical steel sector, elevated debt reduces operational flexibility, heightens vulnerability to demand shocks, and can limit strategic moves during downturns.
Negative Free Cash FlowOngoing negative FCF means the firm must rely on external financing or equity to fund growth. Unless capex yields sustained returns, persistent negative FCF can pressure liquidity, raise leverage, and constrain ability to repay debt or return capital to shareholders over the medium term.
Moderate Profitability MarginsRelatively low net margins and only moderate operating margins leave limited cushion against raw material volatility and pricing pressure in steel. Sustained thin margins reduce internal funding for capex, make returns sensitive to cyclical downturns, and constrain long‑term margin expansion potential.