Kwan On Holdings Limited provided earning guidance for the year ended 31 March 2022. The board of directors of the Company informed the shareholders of the Company and potential investors that, based on a preliminary assessment of the latest available unaudited consolidated management accounts of the Group, the Group is expected to record a net loss of not less than approximately HKD 68.8 million for the year ended 31 March 2022 as compared with a net loss of approximately HKD 24.6 million for the year ended 31 March 2021. The Board considers that the expected net loss is mainly attributable to: Under constant restrictions and health regulations caused by COVID-19, the progress of the Group's civil engineering projects has been seriously affected.

Slowdown and even delay in completion of certain projects were unavoidable. These delay and time overrun in projects have led to an increase in fixed labor cost, subcontracting fee and overhead expense, which have seriously affected profitability. The Group will endeavor to negotiate with the representative of employer to make claims on overrun cost due to the unavoidable delay in projects.

However, were not able to record this income from possible claims under current accounting standard until it is more certain. For the year ended 31 March 2022, the Hong Kong construction related segment of the Group is expected to recorded a gross loss of approximately HKD 40.6 million compared with gross profit of approximately HKD 12.1 million from the Previous Year; and in response to the economy uncertainty caused by the COVID-19 pandemic, the Group has adopted a more conservative approach in submitting tender and has not entered into any sizable construction project in oversea markets.