Large Impairments & LossesMassive one‑time write‑downs and a large net loss materially shrink reported capital and reflect past investment missteps. Such impairments reduce future earnings power, constrain ROIC recovery, and may limit ability to fund strategic initiatives without offsetting cash generation improvements.
Persistent Negative Free Cash FlowConsistent negative FCF (full‑year -JPY 481bn in FY2025) implies limited self‑funding for capex, electrification, and restructuring. Even with H2 improvement, sustained outflows heighten reliance on reserves or external financing, constraining strategic flexibility over coming quarters.
Elevated LeverageHigh leverage reduces balance sheet flexibility and increases sensitivity to profit swings, tariffs, and cost inflation. With debt well above equity, any earnings shortfall raises refinancing and interest risks, potentially forcing deeper cost cuts or asset sales to restore financial stability.