Weak Profitability / Low MarginsThin net margins (under 4%) and only moderate gross margins limit retained earnings and reinvestment capacity. Persistently low profitability reduces the firm's ability to absorb cost shocks, finance growth internally, or improve returns, making earnings sensitive to project mix and pricing pressure.
Revenue Volatility From Project TimingReliance on project timing and customer scheduling creates recurring revenue volatility, as seen with project completions and client delays. Structural exposure to lumpy contracts can compress utilization and extend recovery times, complicating predictable cash flows and planning over several quarters.
Cash Generation Pressure And Higher LeverageNegative FCF growth and an OCF-to-net-income of 0.58 point to weak cash conversion, while long-term debt increased to fund equipment shipments. Structurally weak cash generation plus rising leverage can limit reinvestment, constrain liquidity buffers, and raise financing costs in a tighter credit environment.