High Capital ExpenditurePersistent negative free cash flow driven by elevated capex can strain liquidity and force external financing if returns lag. Over months this raises execution risk: investments must generate incremental margins and volume to justify spend and avoid pressuring operational flexibility.
Declining Net Profit MarginA slipping net profit margin suggests rising costs, pricing pressure, or mix shifts that could erode shareholder returns. If sustained, this reduces retained earnings and ROE, limiting internal funding for capex or working capital and weakening long-term profitability.
Weak Cash ConversionChallenging cash conversion implies earnings are not translating efficiently into cash, elevating short-term liquidity risk and constraining reinvestment. Over months, this can limit capacity to fund growth, delay registrations/exports and increase dependence on external working-capital sources.