KML Technology Group Limited provided group earnings guidance for the fiscal year ended March 31, 2023. For the year, the company Group expects to record a loss before tax of approximately HKD 32.4 million for the year ended 31 March 2023, as compared to a profit before tax of approximately HKD 9.7 million for the year ended 31 March 2022. The increase in loss in Current Year was mainly attributable to, among other things, the decrease in gross profit to approximately HKD 9.9 million for the Current Year (approximately HKD 44.5 million for the Last Year).

The aforesaid was primarily attributable to (i) the impact of the fifth wave of coronavirus disease (COVID-19), especially in terms of operational efficiencies and project delivery progress, resulted in relatively higher staff costs and lower revenue; (ii) major work progress of significant projects were completed during the Last Year; (iii) major projects in hand in the Current Year are at their early stage that revenue recognised is not substantial; and (iv) a provision for contract works of approximately HKD 16.2 million was recognised for the contract obligation as at 31 March 2023 due to the extra costs estimated to be employed resulted from the technical difficulties identified in certain projects during the Current Year and the adverse impact of the COVID-19. Such issue remains under negotiation between the Group and the relevant customer. The aforesaid provision for contract works is a non-cash accounting treatment in accordance with Hong Kong Financial Reporting Standards that has no effect on the Group's operating cash flow in Current Year.