High Financial LeverageElevated leverage increases sensitivity to interest rate moves and cash flow variability, constraining management's ability to invest or absorb shocks. Over a multi-month horizon, high debt raises refinancing and covenant risk and limits strategic optionality.
Declining Revenue TrendNegative recent revenue growth points to demand softness or pricing pressure in the core paperboard business. Persistent top-line decline can erode operating leverage and make margin recovery harder, increasing reliance on cost cuts or volume recovery to restore profitability.
Profitability Under PressureFluctuating net profits and stressed EBIT/EBITDA margins indicate operational and cost challenges beyond gross margins. Sustained margin pressure reduces cash available for debt service and investment, and may necessitate structural fixes in pricing, mix, or cost base to stabilize returns.