Negative ProfitabilityA sustained negative net margin and negative ROE undermine the company’s ability to generate returns and retain earnings. Persistent losses reduce reinvestment capacity, strain stakeholder confidence, and can erode equity, making long-term recovery more difficult without structural cost or pricing improvements.
Negative Free Cash FlowNegative free cash flow after capital expenditures signals that operations plus capex consume cash rather than generate surplus. This constrains investments, debt repayment and distributions, raising reliance on external financing and increasing liquidity risk during commodity downturns.
High Revenue And EPS VolatilityLarge negative swings in revenue and EPS reflect commodity-price and volume cyclicality, creating unpredictability in cash flows and planning. Such volatility raises execution risk, complicates budgeting and capital allocation, and can impair relationships with lenders and counterparties over time.