Weak Cash GenerationNegative operating cash flow and zero free cash flow point to conversion issues between reported profits and liquidity. This undermines the firm's ability to fund capex, pay sustainable dividends, or build buffers during downturns without raising external funding or cutting investment.
Operating Margin PressureA falling EBIT margin signals rising cost or mix pressures despite revenue growth. If operating margins continue to compress from energy or input cost inflation, the firm's long-run profitability and capacity to self-fund growth will be impaired unless productivity or pricing power improves.
Commodity And Energy SensitivityStructural exposure to steel demand cycles, commodity price swings and high energy usage makes revenues and margins volatile. This cyclicality reduces predictability of cash flows and increases capital allocation risk, requiring conservative financial policies to withstand downturns.