Weak Cash GenerationPersistent negative operating and free cash flows reduce internal funding for working capital and growth, increasing reliance on external financing. Over several months this can constrain raw material procurement, raise refinancing risk, and limit the company’s ability to capitalize on demand.
Rising Total DebtAn upward trend in total debt, if continued, elevates interest burden and lowers financial flexibility. Combined with weak cash generation, rising leverage can pressure liquidity, force tighter working-capital management, and increase vulnerability to rate or cycle shocks.
Net Margin Pressure From Higher ExpensesDespite gross margin gains, rising expenses compress net margins and reduce cash conversion. Over a 2–6 month horizon this leaves less buffer against metal price swings and operational disruptions, making sustained profitability dependent on stricter cost control or higher realizations.