Profitability Margin VolatilityHistoric swings in gross and net margins, including prior negative gross margin periods, undermine earnings predictability and complicate multi-quarter planning. Persistent margin volatility increases execution risk for margin improvement initiatives and reduces certainty around sustainable operating earnings.
Free Cash Flow Variability And Recent DeclineA declining free cash flow in 2025 and historical variability limit the company's ability to self-fund growth, reduce debt, or return capital. Continued FCF swings could force reliance on external financing during downturns, raising cost of capital and constraining strategic flexibility.
High Regulatory And Policy ExposureEarnings and ethanol demand depend materially on government blending mandates, offtake tenders and sugar policy. Adverse changes to blending rules, cane pricing or release policies can rapidly shift volume mix and margins, creating a persistent structural risk to revenue stability.