High LeverageElevated leverage increases interest and refinancing vulnerability, particularly in a capital-intensive development business. High debt relative to equity constrains financial flexibility, raises default risk under downturns, and can force asset sales or halt projects if cash generation weakens, affecting medium-term stability.
Weak Cash FlowPersistent negative operating and free cash flow create structural liquidity pressure in a sector that requires steady capital for projects. Reliance on external financing increases funding cost and execution risk, may limit ability to self-fund growth or maintain distributions, and makes the company sensitive to credit market conditions.
Operational EfficiencySub-par EBIT/EBITDA margins relative to peers indicate operational inefficiencies or higher project costs. Without efficiency gains, margin compression could offset revenue growth benefits, weaken cash conversion, and reduce the capacity to deleverage, making long-term profitability and reinvestment more challenging.