Negative Equity And Rising LeverageNegative equity combined with a sharp rise in debt materially reduces financial flexibility and raises refinancing and covenant risk. Over the medium term this constrains strategic options, increases cost of capital, and elevates the chance of creditor-driven restructuring if cash flows do not improve.
Weak Cash GenerationA reversal to negative operating and free cash flow shows the business is currently not self-funding. Persistent cash burn increases dependence on external financing, heightens vulnerability to credit market conditions, and can force asset disposals or higher-cost funding that undercuts long-term viability.
Persistent Net LossesOngoing net losses despite positive EBIT indicate non-operating costs (interest, taxes, one-offs) are a structural drag. Continued bottom-line deficits erode equity, limit reinvestment capacity, and make it harder to attract long-term financing until losses are sustainably eliminated.