Weak Operating ProfitabilityA negative EBIT margin signals the core business isn't covering operating costs, limiting internal funding for growth and R&D. Over several months this structural weakness can erode cash buffers, hinder scaling, and make achieving sustainable profitability more difficult.
High Leverage And Negative EquityHigh leverage and negative equity create persistent financial fragility: higher interest burden, refinancing risk, and constrained strategic options. Structurally, this reduces ability to invest, pursue contracts requiring balance-sheet strength, and withstand demand shocks over months.
Limited Cash ConversionLow conversion of accounting earnings into free cash flow means profits may not be reliable sources of liquidity. For a capital-intensive and project-driven business, this magnifies vulnerability to receivables and working-capital swings, stressing operations and funding durability.