Weak Cash GenerationPersistent negative operating and free cash flows, coupled with significant capital spending, erode liquidity and limit ability to self‑fund operations or debt service. This increases reliance on external financing and raises refinancing and operational risk over the medium term.
Rising Debt LevelsAn increasing debt load reduces financial flexibility, especially given weak cash generation. Higher leverage elevates interest obligations and constrains capacity for further investment or buffering metal‑price swings, pressuring margins and financial resilience.
Margin Volatility RiskAlthough gross margins improved, net margins remain moderate as expenses climbed. Combined with dependence on scrap availability and lead price swings, this creates sustained margin volatility and uncertainty in long‑term profitability and cash conversion.