The board of directors of China Resources and Transportation Group Limited announced that the group is expected to record a substantial increase in net loss for the six months ended 30 September 2014 as compared to the six months ended 30 September 2013, which is mainly attributable to: the significant increase in finance costs arising from bank borrowings and convertible bonds issued by the company. These specific borrowings were made primarily to finance the construction of the group's 265-kilometer heavy haul toll expressway in Inner Mongolia (Zhunxing Expressway). During the construction phase of Zhunxing Expressway, all finance costs arising from these specific borrowings were capitalized to the group's concession intangible assets.

Upon the traffic opening and commencement of toll collection of Zhunxing Expressway on 21 November 2013, the group ceased capitalizing such finance costs and recognized them directly in the group's consolidated income statement pursuant to Hong Kong Accounting Standard 23, Borrowing Costs. The total amount of finance costs incurred for the six months ended 30 September 2014 is expected to be approximately HKD 892 million of which all are charged to the group's consolidated income statement (six months ended 30 September 2013: total amount of finance costs incurred was HKD 683 million of which HKD 652 million was capitalized to the group's concession intangible assets and HKD 31 million was charged to the group's consolidated income statement); and the commencement of amortization of the Group's concession intangible assets upon the traffic opening and commencement of toll collection of Zhunxing Expressway on 21 November 2013. The amount of the amortization for the six months ended 30 September 2014 is expected to be approximately HKD 309 million (six months ended 30 September 2013: HKD nil).

The Board is also pleased to state that the Group is expected to record a positive EBITDA for the six months ended 30 September 2014 compared to a negative EBITDA for the six months ended 30 September 2013, primarily contributed by the toll income from Zhunxing Expressway.