China Ocean Group Development Limited provided earning guidance for the financial year ended 31 March 2022. The board of directors of the Company informed the shareholders of the Company (the "Shareholders") and potential investors that, based on the Board's preliminary assessment of the unaudited consolidated management accounts of the Group for the financial year ended 31 March 2022 (the "Year"), the Group is expected to record a consolidated net loss of not less than approximately HK$624.4 million for the Year, as compared with the audited consolidated net loss for the year of approximately HKD 379.7 million for the year ended 31 March 2021. Such expected substantial consolidated net loss for the Year was mainly due to the following factors: (i) the expected fair value loss on trade receivables of approximately HKD 333.2 million for the Year (2021: approximately HKD 178.0 million) and expected impairment loss on other receivables of approximately HKD 36.1 million for the Year (2021: approximately HKD 2.2 million) due to the adverse impact caused by the outbreak of COVID-19 pandemic and the weakened demand of customers due to deterioration of their overall financial condition brought by the uncertain global macro-economic environment; and (ii) the increase in the impairment of construction in progress of approximately HKD 181.9 million provided for the Year mainly because of the ship-builder's inability to obtain the government's approval for the construction of the fishing vessels resulting in a dismantling order from the government.

The Group would initiate legal action against the ship-builder to recover the progress payment made, however, the financial strength of the ship-builder is rather weak, thus, it was expected that even the Group succeed in obtaining a favorable judgment, the ship-builder may not be able to fully settle the amount claimed. Thus, for prudence purpose, full impairment on the progress payment was made.