High Financial LeverageA debt-to-equity ratio of 1.46 is a material leverage burden that can amplify earnings volatility and limit strategic flexibility. Elevated leverage raises refinancing and interest coverage risk, particularly if fertilizer prices or margins deteriorate over the medium term.
Weak Cash Conversion And Negative Free Cash FlowNegative free cash flow and an OCF-to-net-income ratio of 0.18 point to weak cash conversion. Limited free cash constrains ability to pay down debt, finance capex, or return capital, increasing liquidity risk and reducing buffers against cyclical downturns.
Downward Pressure On Net MarginsA decline in net margin to 6.31%, despite steady gross margins, suggests rising operating or financing costs or limited pricing power. Sustained margin compression would hinder earnings growth, weaken cash flows, and make deleveraging more difficult over time.