The new board of directors of Grupa Azoty has announced that it has conducted impairment tests for assets at the Tarnów-based company and its subsidiaries, which should reduce the group's financial results for 2023.
— The results of fixed asset impairment tests confirm this The current financial situation of Azoty Group requires urgent reform. In this aspect, we pay great attention to the polymer police investments and expenses incurred in this project. In parallel We strive to launch the investment commercially as soon as possible “We are strengthening the team responsible for implementing this project,” said Andrei Skolmovsky, Vice President of Grupa Azoty.
We have written several times about the problems with the Polimery Police project, which involves setting up a polypropylene plant in the police. The factory was grandly opened by PiS politicians in June 2023, but the investment has not yet been completed. The installation was supposed to begin full commercial production in September, but so far what is called integrity testing, which is to ensure that the plant has met all standards guaranteed by the contractor.
According to the company, in the case of tests carried out at Grupa Azoty in Tarnów Plastics Works, a deficiency in the estimated recoverable value of the assets in relation to the book value was identified, and therefore a decision was made to create an impairment loss of EGP 59 million. This is due to the expected deterioration in profitability due to the weak long-term market outlook. The write-off will have a negative impact on the Azote Group's financial statements for the year 2023 through: Decrease in standalone operating result by PLN 59 million. However, it will not translate into EBITDA (operating result plus depreciation).
The other write-off, amounting to PLN 151 million, relates to the fertilizer business of the GA Zakłady Chemiczne Police subsidiary. It is a result of deteriorating long-term market and future cash flow prospects, particularly in the area of nitrogen products for technical applications.
In addition, the company decided Increased write-off at subsidiary GA Polyolefins by PLN 206 million to PLN 1,343 million. This company is responsible for building a plastic factory in Police.
The total after all these write-offs are made The operating results of the Azoty Group for the last year will be reduced by PLN 1,553 million.
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