Rising Total Debt Requires MonitoringAlthough leverage is described as manageable, an increasing absolute debt level can erode flexibility if revenue or margins soften. Higher debt raises interest and covenant risk and could limit growth investments or force more expensive external financing in adverse market conditions.
Net Profit Margin PressureEroding net margins point to persistent cost pressures—input, labor, or SG&A—that could compress returns even as revenue grows. In infrastructure businesses, margin recovery can be slow due to fixed contract structures and competitive bidding, impacting long-term profitability.
Ongoing Capital Expenditure DemandsWater and environmental infrastructure is capital intensive; ongoing capex needs will continually consume free cash flow. Even with improved cash generation, sustained investment cycles can limit surplus cash for dividends, buybacks or deleveraging over multiple reporting periods.