Metropolis Capital Holdings Limited provided consolidated earnings guidance for the year December 31, 2022. For the year, the group expected increase in the Group's revenue by approximately 9.9%, together with a decrease in staff costs by approximately 23.0% for financial year 2022, as compared to that for the year ended 31 December 2021, the Group is expected to record a loss before tax of approximately RMB 9.9 million for financial year 2022, as compared to a profit before tax of approximately RMB 1.2 million for financial year 2021. The expected deterioration in financial performance for financial year 2022 was primarily attributable to the increase in loss allowances on finance lease receivables and receivables arising from sale and leaseback arrangements and increase in finance costs of more than RMB 5.0 million due to the increase in the interest on bank and other borrowings as the balance of bank and other loans significantly increased.

The Group recognized loss allowances on the Lease Receivables mainly due to the increase in receivables arising from sale and leaseback arrangements. In addition, as disclosed in the interim report of the Company for the six months ended 30 June 2022, the city-wide lockdown measures, which were implemented to contain the outbreak of local novel coronavirus caused by the divergent variants of COVID-19 in Shanghai, the People's Republic of China, from late March 2022 to early June 2022, has led he Group to adopt stricter risk control measures and make provisions in order to prevent future credit risks when the Group conducted impairment assessment on the relevant Lease Receivables. As the above lockdown measures were implemented across the PRC from time to time during the second half of financial year 2022 and only had been lifted up in late 2022, the Group has continued to adopt the risk control measures to the same extent for financial year 2022.