Negative Free Cash FlowPersistent negative free cash flow of -1.02 billion yen signals the company is consuming cash despite returning to accounting profits. Over 2-6 months this can constrain the ability to fund capex, pay dividends or reduce debt without external financing, raising medium-term liquidity and execution risk.
Low Operating MarginsEBIT and EBITDA margins remain modest, limiting the company's buffer against volume volatility or input-cost shocks. Structurally low operating profitability reduces retained earnings capacity and makes sustaining investments, R&D or tooling spend harder without materially improving efficiency or mix over coming quarters.
Residual Leverage RiskAlthough leverage improved, management notes remaining leverage risk. If cyclical auto demand weakens or cash flow remains strained, that residual leverage could force difficult trade-offs on capex, supplier terms or refinancing, creating structural downside risk over the next several months.