China Automation Group (HKG:0569) has warned that it expects profit for the year ended 31 December 2011 to decrease compared with the profit for the year of 2010 due to two reasons: the hold-up in the execution of the existing contracts as well as the signing of new contracts in the railway sector, which is attributable to a series of negative events that occurred in this sector, in particular, the deadly collision between two trains in Wenzhou, Zhejiang Province on 23 July 2011; and the significant increase of the company's finance costs for the year of 2011 resulting from significant interest expenses incurred in connection with the senior notes in the aggregate principal amount of US$200 million issued by the company in April 2011.