Declining RevenueA sharp revenue decline reduces scale and impairs the firm's ability to absorb fixed overhead and spread project costs. If sustained, lower top-line undermines investment capacity, weakens negotiating leverage with suppliers, and pressures medium-term profitability and growth prospects.
Margin CompressionMaterial decreases in gross and net margins point to rising input costs, pricing pressure, or execution inefficiencies. Persisting margin erosion will reduce returns on projects and capital, making it harder to rebuild profitability even if revenues stabilize without structural cost fixes.
Negative Cash GenerationTurning to negative free cash flow and weak operating cash conversion constrains the company's ability to fund capex, service obligations, or reinvest in backlog organically. Over months this increases reliance on external financing or equity, limiting strategic flexibility.