Decline To Negative Free Cash FlowTransition to negative FCF from higher capex reduces internal funding for working capital and new bids. For an EPC firm with long receivable cycles, sustained negative FCF increases reliance on external financing and could constrain capacity to scale or absorb project delays in the medium term.
Weak Cash Conversion Of EarningsOnly ~54% of reported net income converting to operating cash highlights retentions, receivables or timing gaps. Lower cash conversion pressure limits ability to self-finance contract advances and makes liquidity sensitive to billing cycles and slower collections over the coming quarters.
Debt Level Requires MonitoringAlthough D/E is moderate, management note that debt needs watching signals exposure to project-backed liabilities. With large project durations and working capital swings, rising leverage or refinancing stress could impair bidding competitiveness and increase financing costs.