High Financial LeverageMaterial leverage raises interest and refinancing exposure across economic cycles. For an infrastructure generator with large capex needs, high debt-to-equity constrains financial flexibility, increases default risk under stress, and can limit capacity to pursue new projects without external funding.
Negative Free Cash Flow / Capex PressurePersistent negative free cash flow from heavy capex burdens liquidity and necessitates external financing or higher leverage. Over several quarters this can erode cash buffers, elevate funding costs, and delay value realization from new assets if investment returns are slower than anticipated.
Declining Net Income / EPSA sharp decline in net income and EPS signals margin pressure or one-time hits that reduce retained earnings. Persisting earnings declines weaken the company's ability to self-fund growth, lower resilience to rate or cost shocks, and can limit strategic reinvestment over multiple quarters.