High LeverageSBM’s elevated leverage limits financial flexibility and raises refinancing and interest-rate sensitivity. High debt levels constrain the firm’s ability to fund new projects, absorb execution setbacks, or pursue opportunistic investments without increasing financing risk or diluting equity.
Weak Cash ConversionDespite accounting profits, operating cash flow covers only a small share of debt and free cash flow declined sharply. Volatile cash conversion driven by working capital and project timing can hinder debt repayment, limit reinvestment capacity, and make dividend or buyback sustainability uncertain.
Project-dependent Earnings VolatilityEarnings swing materially with project awards, timing and costs, reflecting lumpy EPC revenue profiles. This structural dependence on sanction cycles and execution increases forecast risk, complicates long-term planning, and can quickly reverse margin gains if project delays or cost overruns occur.