Stock Code: 000553(200553) Stock abbreviation: ADAMA A (B) Announcement No. 2026-22
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 159
million ($23 million) for the first half of 2026 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 first half of 2026, 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 first half of
Further details of the impairments are as follows:
Unit: ‘000 RMB
Item Amount
Fixed assets 74,236
Inventories 54,707
Credit losses 28,205
Construction in progress 1,537
Total Asset impairments 158,685
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.
During the first half of 2026, the Company is expected to provide impairments of around
RMB 74 million ($11 million) to fixed assets with lower operational efficiency. 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’
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 55 million ($8 million)
in the first half of 2026. The reasons of the impairments were mainly due to inventory
management aspects during the ordinary course of the Company’s business.
Basis and Explanation for Credit Impairment Losses
The Company recognizes an impairment provision which reflects its assessment
regarding the credit risk of accounts and other receivables on a lifetime expected credit
loss basis. The examination for expected credit losses is performed using a model
including aging analysis and historical loss experience, and is adjusted taking into
account observable factors reflecting current and expected future economic conditions.
If there is objective evidence of a recovery in the value of receivables which can be
related objectively to an event occurring after the impairment was recognized, the
previously recognized impairment loss is reversed.
The credit impairment losses provided for the first half of the year are expected to be
around RMB 28 million ($ 4 million). The expected credit losses are mainly provided
during the course of ordinary management of accounts receivable based on the
evaluation of the current and future financial position of customers across different
regional markets.
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 the first half of 2026, the Company is expected to make impairments of around RMB
financial statements.
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 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. 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 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.
July 15, 2026
首页
微信公众号
证券之星APP
