Significant Revenue DeclineA sharp revenue contraction undermines the conversion of healthy project-level margins into net profits and free cash flow. Persisting lower sales reduce collections needed to fund ongoing construction, slow deleveraging, and can prolong reliance on external financing across the next several quarters.
High LeverageA debt-to-equity ratio of 2.50 and low equity ratio constrain financial flexibility and increase sensitivity to rising interest costs. High leverage limits the firm's ability to weather slower sales, elevates refinancing risk, and can force prioritization of debt service over project investment during prolonged weak demand.
Weak Cash GenerationNegative free cash flow and weak operating cash conversion indicate the business is not generating sufficient cash from operations to fund capex or service debt. This structural cash shortfall necessitates external financing or asset sales, constraining growth and increasing vulnerability to market funding shocks.