Pellet Market Oversupply RiskA structurally long pellet market risks prolonged price weakness and margin compression for the pellet business. Given pellets are a core feedstock and revenue stream, sustained oversupply would pressure EBITDA contribution, capital returns, and could require margin recovery actions or capacity rationalisation.
Reduction In Biomass Generation EarningsBiomass earnings remain exposed to achieved power prices and policy changes. A structural shift to lower power prices or changes in support mechanisms can materially reduce generation margins and cash generation, undermining profitability even as operational output or volumes remain steady.
Inconsistent Revenue GrowthVolatile and negative revenue growth reduces predictability for planning and investment. Inconsistent top-line trends complicate forecasting of margins, capital allocation and the sustainability of shareholder returns, increasing execution risk for medium-term growth plans and large projects.