Stock Code: 000553(200553) Stock abbreviation: ADAMA A (B) Announcement No. 2026-3
ADAMA Ltd.
Asset Impairment Announcement
The Company and all members of its Board of Directors confirm that all the
information disclosed herein is true, accurate, and complete with no false or
misleading statement or material omission.
In accordance with the Accounting Standards for Business Enterprises, ADAMA Ltd.
(hereinafter referred to as the “Company”), is expected to record a total of RMB 548
million ($77 million) for the year of 2025 in provisions for asset and credit loss
impairments. These provisions are mainly related to one-time impairments of some fixed
assets, impairment of inventories and credit loss impairment of accounts receivables
made during the ordinary course of the Company’s business, as provided herein.
Overview and Financial Impact of Provision for the Asset Impairments
During the year, the Company is expected to record provisions for asset and credit loss
impairments based on "Accounting Standards for Business Enterprises" and the
Company’s own applicable accounting policies.
These provisions, charged to the total profits of the Company during the year, are
expected amounting to RMB 548 million ($77 million).
Further details of the impairments are as follows:
Unit: ‘000 RMB
Item Amount
Fixed assets 247,015
Inventories 159,054
Credit losses 115,546
Intangible assets 15,867
Construction in progress 11,002
Total Asset impairments 548,484
Basis and Explanation for Impairment of Fixed Assets
The Company assess at each balance sheet date whether there are any indications that
the fixed assets may be impaired. If there is any indication that such assets may be
impaired, recoverable amounts are estimated for such assets (recoverable amount is
the higher between the assets’ fair value less costs to sell and the present value of the
future cash flow estimated to be derived from the asset). If the recoverable amount is
below the assets’ net cost recorded in the balance sheet, a provision for impairment is
made.
In 2025, the Company is expected to provide impairments of around RMB 247 million
($35 million) to fixed assets with lower operational efficiency, as part of the Fight
Forward plan. This is due to the Company’s strategic direction to enhance operational
efficiency and focus on high-performing facilities. The impairment is made based on the
evaluation of the assets’ net book value and recoverable amount.
Basis and Explanation for Impairment of Inventories
Inventories are measured at the lower of cost and net realizable value. If the net
realizable value is below the cost of inventories, a provision for decline in value of
inventories is made. Net realizable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion, the estimated costs
necessary to make the sale and relevant taxes.
Inventory impairments are expected to reach approximately RMB 159 million ($22
million) for the full year 2025. This is attributable to the fact that some of the defective
inventories could not be reprocessed because certain facilities are closing as part of the
Fight Forward Plan in order to improve operational efficiency. Other reasons of the
impairments were mainly due to inventory management aspects during the ordinary
course of the Company’s business.
Basis and Explanation for Credit Impairment Losses
The Company recognizes an impairment provision which reflects its assessment
regarding the credit risk of accounts and other receivables on a lifetime expected credit
loss basis. The examination for expected credit losses is performed using a model
including aging analysis and historical loss experience, and is adjusted taking into
account observable factors reflecting current and expected future economic conditions.
If there is objective evidence of a recovery in the value of receivables which can be
related objectively to an event occurring after the impairment was recognized, the
previously recognized impairment loss is reversed.
The credit impairment losses provided for the year are expected to be around RMB 116
million ($16 million). The expected credit losses are mainly due to liquidity issues of
some local customers in certain countries, which are provided based on the evaluation
of the current and future financial position of the local customers.
Basis and Explanation for Impairment of Intangible Assets
The Company assesses at each balance sheet date whether there is any indication that
the intangible assets with a finite useful life may be impaired, and if such indication
exists, the Company calculates the recoverable amount of the asset. When the
recoverable amount of an asset is less than its carrying amount, an impairment loss is
expected to be recognized to reduce the carrying amount to the recoverable amount.
Impairment of intangible assets, mainly related to product registrations, amounting to
around RMB 16 million ($2.2 million) is expected to be provided for 2025.
Basis and Explanation for Impairment of Construction in Progress
The Company assess at each balance sheet date whether there are any indications that
the construction in progress may be impaired. If there is any indication that such assets
may be impaired, recoverable amounts are estimated for such assets (recoverable
amount is the higher between the assets’ fair value less costs to sell and the present
value of the future cash flow estimated to be derived from the asset). If the recoverable
amount is below the assets’ net cost recorded in the balance sheet, a provision for
impairment is made.
In 2025, the Company is expected to make impairments of around RMB 11 million ($1.6
million) on construction in progress.
Explanation on the Reasonableness of Asset Impairments
The aforementioned provisions were mainly due to impairments of some fixed assets,
inventories and credit loss impairments of accounts receivables made during the
ordinary course of the Company’s business.
Based on the current status of the assets, these impairments, some of which non-
recurring, serve to correctly present the balance sheet of the Company, truly and fairly
reflects the company's financial situation, asset value and operating results, while
meeting requirements of accounting standards and related policies.
Other Explanations
The expected provisions for asset impairment is the result of the preliminary calculation
of the financial department of the Company, without the audit of the accounting firm.
Please refer to the audited 2025 Annual Report of the Company for final financial data.
Investors are kindly reminded to pay attention to investment risks.
Approval Process for the Provision of Asset Impairments
According to the Company’s internal approval procedures, the above-mentioned major
impairment of fixed assets and inventories, as part of the Fight Forward Plan, was
approved by the Company’s global senior management, with the calculation of the
recoverable amount of the assets performed by the finance team of the related
subsidiaries and review done by the global finance team.
Other impairments, were identified, calculated and approved locally by respective
subsidiaries and reviewed by the relevant global teams.
It’s hereby announced.
Board of Directors
ADAMA LTD.
January 30, 2026
首页
微信公众号
证券之星APP
