Mr. Charles Wang reports

CF ENERGY ANNOUNCES FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2022

CF Energy Corp. has filed its audited consolidated financial results for the year ended Dec. 31, 2022.

Revenue in 2022 was RMB334.2 million (approx. CAD64.7 million), a decrease of RMB21.0 million (approx. CAD4.3 million), or 6%, from RMB355.2 million (approx. CAD69.0 million) in 2021. Sanya City experienced two periods of lockdown due to outbreaks of COVID-19 in 2022. Deployment of the travel restrictions and lockdown measures severely impacted Sanya City's tourism and retail sector which affected the demand for natural gas in the city. The pandemic first hit demand for natural gas in late March 2022, right after the peak season of the Chinese New Year holiday. Such decrease in demand partially offset the increase in revenue and sales volume gained in the first quarter of 2022 attributed to the recovery of the economy from the traditional peak season of tourist activity in the city. The pandemic affected the demand for natural gas again in August 2022 with the second city lockdown. These measures came at the height of the summer tourism season which severely affected the tourist industry and the travel retail sectors in August 2022 from recovery since the lifting of the lockdown in June 2022. Demand for natural gas from commercial customers in Sanya City did not pick up for the rest of the year until China government loosened its COVID policy and restrictions in December 2022.

Gross profit in 2022 was RMB107.7 million (approx. CAD20.8 million), a decrease of RMB26.3 million (approx. CAD5.2 million), or 20%, from RMB134.0 million (approx. CAD26.0 million) in 2021. Gross margin in 2022 was 32.2%, a decrease of 5.5 percentage points as compared to 37.7% in 2021. Lower gross profit and margin in 2022 were mainly attributable to the drop in margin of gas supply due to the increasing composition of revenue from residential customers with relatively lower margin, increase in purchase price of LNG which could not be fully transferred to customers in Sanya CNG vehicle station and the negative margin for the Integrated Smart Energy segment as fixed costs could not be fully absorbed with the decrease in revenue due to outbreaks of COVID.

Net profit in 2022 was RMB4.0 million (approx. CAD0.8 million), a decrease of RMB17.7 million (approx. CAD3.4 million), or 81%, from RMB21.7 million (approx. CAD4.2 million) in 2021. Net profit in 2022 included certain adjusting items. On a comparable basis, after excluding the gain of RMB11.4 million (approx. CAD2.2 million) in fair value change on derivative financial instrument of loan discharge agreement in respect of the commitment by the estate of Mr. Lin to subscribe for common shares under a related party loan (please refer to the Related Party Transaction section of the MD&A for more details), reversal of share-based payment expenses of RMB0.8 million (approx. CAD0.2 million) and the non-recurring government financial assistance of RMB0.3 million (approx. CAD0.0 million), the Company reported an adjusted net loss of RMB8.5 million (approx. CAD1.6 million) in 2022, a decrease of RMB34.0 million (approx. CAD6.9 million), or 133% from an adjusted net profit of RMB25.5 million (approx. CAD5.3 million) reported in 2021.

EBITDA in 2022 was RMB76.0 million (approx. CAD14.7 million), a decrease of RMB1.4 million (approx. CAD0.3 million), or 2% from RMB77.4 million (approx. CAD15.0 million) in 2021.

On a comparable basis, the adjusted EDITDA in 2022 was RMB63.5 million (approx. CAD12.3 million), a decrease of RMB17.7 million (approx. CAD3.8 million), or 22%, from RMB81.2 million (approx. CAD16.1 million) in 2021.

Basic earnings per share ("EPS") in 2022 was RMB0.26 (CAD0.05) per share. Adjusted loss per share in 2022 was RMB0.13 (CAD0.02) per share (non-IFRS).

As we expect the economy will start to recover after the Chinese government lifted the COVID-19 restrictions completely at the end of 2022, our Group will return back to business-as-usual stage. We believe we could see gradual improvements in our financial performance in the coming years. Meanwhile, we will focus on the integrated smart energy segment and smart mobility segment of the Company and continue to expand the businesses in China and transition clean energy business as an integrated energy player. This will be achieved via cooperating with our strategic partners and valuable resources in the related sector.

Chairman statement

Ann Siyin Lin, CEO and Chair of the Board, states that: As the COVID-19 situation continued to worsen across China and affect all sectors and industries, the Company reported an adjusted net loss of RMB8.5 million as compared to an adjusted net profit of RMB25.5 million in 2021. This was mainly due to two periods of outbreaks of COVID-19 in 2022, of which the lockdown measures severely affected the demand for our natural gas and clean energy utilities in Sanya. However, notwithstanding that the economy was at the bottom since the pandemic started, the Company made some remarkable progress and solid growth in the integrated smart energy and smart mobility segments. The Haitang Bay Integrated Smart Energy Project signed more new clients this year. In addition, the Company signed and secured new EV taxis customers in Sanya City, and expanded the battery swap business in the Beihai City of Guangxi Province. This, in time, could help to improve the financial performance of the Smart Mobility segment.

Following the Government's policy to remove all COVID-19 restrictions and control measures at the end of 2022, it was anticipated that the market would start to recover from the economic downturn, and people would return to their normal daily activities. I believe this could help with our initiative to work towards a turn-around and to this end, we have made strategic plans to reposition our clean energy segment to continue to grow in this energy transition era.

The audited consolidated financial results and Management's Discussion and Analysis (MD&A) can be downloaded from SEDAR or from the company's website.

About CF Energy Corp.

CF Energy Corp. is a Canadian public company currently traded on the Toronto Venture Exchange ("TSX-V") under the stock symbol "CFY". It is an integrated energy provider and natural gas distribution company (or natural gas utility) in the PRC. CF Energy strives to combine leading clean energy technology with natural gas usage to provide sustainable energy to its customer base in the PRC. In 2009, CF Energy was recognized as being one of China's the Top Ten Most Influential Brands in the Natural Gas Industry and in 2019, ranked amongst the 2019 TSX Venture 50 top performers on the TSXV for the 2018 year.

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