China Water Industry Group Limited provided earnings guidance for the year ended 31 December 2023. It is expected that the Group may record a net loss attributable to owners of the Company of not more than HKD 260 million for the financial year 2023 as compared to that of a net loss of approximately HKD 89.20 million attributable to owners of the Company for the year ended 31 December 2022 (the ``FY2022''). Comparing with the FY2022, the Board considered that the increase in net loss attributable to owners of the Company was mainly attributable to, among others, net impact of the following factors: (i) the decline in revenue and gross profit derived from the renewable energy business, mainly resulting from a substantial reduction in the volume of on-grid electricity due to local incineration projects being developed and the closure of certain landfill sites, which resulted in less new garbage being delivered to the landfill sites; (ii) the decrease in revenue and gross profit derived from the water supply related installation, construction and infrastructure business as a result of less engineering and construction contracts awarded; (iii) the absence of contribution from the sale of completed properties in the FY2023 as compared to the FY2022; (iv) the decrease in income from the sale of carbon-credit assets; and (v) a fair value loss on investment property due to the continued downturn in the real estate market in China.

The effects of the aforesaid factors were partially offset by (a) the decrease in the provision of expected credit loss on trade and other receivables; (b) the decrease in finance costs as a result of the decrease in average borrowing interest rate; and (c) the decrease in income tax as a result of the decrease in taxable profit generated in FY2023.