Weak Cash ConversionMaterial deterioration in cash conversion limits the company's ability to self-fund capex, repay obligations or build liquidity. Over several months this constrains strategic flexibility, raises reliance on external financing, and heightens vulnerability if steel market conditions worsen.
Earnings ContractionNegative EPS growth signals pressure on profitability after accounting for all factors. Persisting EPS decline can erode retained earnings, limit reinvestment capacity, and weaken investor confidence in the company’s ability to expand or sustain returns over the medium term.
Moderate Operating EfficiencyA modest EBIT margin leaves less operational buffer against input cost shocks typical in steel. Unless structural efficiencies are implemented, profitability could compress more than peers during adverse cycles, constraining free cash flow and capital allocation flexibility over 2–6 months.