The results of these asset impairment tests confirm that Grupa Azoty's current financial situation requires urgent remediation. We are particularly focused on the Polimery Police investment and the expenditures incurred on this project. At the same time, we are striving to commence commercial operations for this investment as soon as possible and are strengthening the team responsible for its implementation, said Andrzej Skolmowski, Vice President of the Management Board of Grupa Azoty S.A.

For the impairment tests conducted at Grupa Azoty S.A. for the Cash-Generating Unit (CGU) Plastics, a shortfall was identified between the estimated recoverable amount and the book value of assets, leading to a decision to create an impairment write-down of minus PLN 59 million. This situation stems from the projected deterioration in profitability due to weakened long-term market forecasts. No impairment write-downs were necessary for the CGU Fertilizers. This event impacts Grupa Azoty S.A.'s financial statement for 2023 by reducing the standalone EBIT by minus PLN 59 million. According to Grupa Azoty's Accounting Policy, this write-down is a one-time, non-cash event and does not affect the standalone EBITDA of the issuer.

Impairment tests conducted in the subsidiaries revealed a shortfall between the recoverable amount and the book value of assets, leading to a decision to create an impairment write-down for the CGU Fertilizers at Grupa Azoty Zakłady Chemiczne “Police” S.A. amounting to minus PLN 151 million. The impairment write-down in the subsidiary's CGU Fertilizers was primarily influenced by the deterioration of long-term market forecasts and future cash flow projections, especially regarding nitrogen products for technical applications.

Additionally, after verifying the submitted impairment test, Grupa Azoty S.A. reports that the impairment write-down for assets in Grupa Azoty Polyolefins S.A. has increased by minus PLN 206 million to a total of minus PLN 1,343 million.

These events impact the issuer's 2023 consolidated financial statement by reducing the consolidated EBIT by PLN 1,494 million. According to Grupa Azoty's Accounting Policy, these write-downs are one-time, non-cash events and do not affect the issuer's consolidated EBITDA.

Grupa Azoty S.A. informs that the above-mentioned events related to the creation of impairment write-downs for fixed assets in the company and its subsidiaries impact the issuer's 2023 consolidated financial statement by reducing the consolidated EBIT by a total of PLN 1,553 million. According to Grupa Azoty's Accounting Policy, these write-downs are one-time, non-cash events and do not affect the issuer's consolidated EBITDA.

Detailed information on the estimated impact of non-cash events on the 2023 financial results is available at Grupa Azoty Investor Relations.