Weak Cash ConversionVery low conversion of reported profits into cash undermines the durability of earnings: it limits internal funding for capex, working capital and dividends, raises reliance on external financing, and suggests earnings may include non-cash or timing-driven items.
Historic Earnings VolatilityA multi-year pattern of deep losses followed by a sudden turnaround indicates inconsistent business performance, making future revenue and margin forecasting unreliable and increasing execution risk for sustaining recent improvements.
Extremely High Reported MarginsMargins at near-100% are atypical and raise questions about sustainability or one-offs; if driven by non-recurring items or accounting effects, long-term profitability will likely revert materially lower, undermining planning and investor confidence.