Beijing Enterprises Urban Resources Group Limited provided unaudited consolidated earnings guidance for the year ended December 31, 2022. For the period, the company expected that the profit attributable to shareholders of the Company for FY2022 will decrease by approximately 40% as compared with the year ended 31 December 2021. If after deducting the one-off impact of the value-added-tax relief granted by the People's Republic of China local government in FY2021 of approximately HKD 39 million, the decrease will be approximately 35%.

The decrease was primarily due to the following factors: Decrease in gross profit margin of the Group's environmental hygiene service projects from approximately 26% for 2021 to approximately 22% during FY2022, mainly resulting from the increase in direct operating costs such as purchase prices of gasoline and diesel fuel, and labour costs; and no VAT Relief granted by the local government in the PRC during 2022, as compared to the relief of approximately HKD 39 million in 2021; and Due to the economic recession and shrank of market demand during 2022, the upstream enterprises of the Group's hazard-free waste disposal projects could only maintain limited operations. The reduction in operating scale of upstream enterprises caused a decrease in overall hazardous waste volume treated by the Group. Meanwhile, there was an increase in operating cost during 2022 which mainly due to a surge in purchase prices of direct materials and consumables, such as sodium hydroxide, waste methanol and mixed alcohol.

As such, the Group's gross profit margin in the hazardous waste treatment services decreased from approximately 32% for 2021 to approximately 18% during 2022.