Net Profit Margin VolatilityVolatile net margins indicate uneven project profitability and cost control across cycles. For a fixed-price/large-contract business, margin swings reduce earnings predictability, weaken free-cash-flow visibility and increase execution risk on future multi-year projects.
Moderate Financial LeverageA moderate but rising leverage profile elevates refinancing and interest-rate exposure in a cyclical industry. Higher debt can constrain bidding flexibility, increase breakeven pressure on projects, and reduce the balance sheet buffer against delayed payments or cost overruns.
Slowing Free Cash Flow GrowthA slowdown in free-cash-flow growth limits internal funding for new tenders, capex and deleveraging. Persistently weaker FCF growth can force greater reliance on external financing, reducing financial agility and raising vulnerability to project timing or payment delays.