19 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Significant impairment of property, plant and equipment Financial year ended 31 December 2024 a) Asian Plantations Limited (“APL”) During the financial year, due to the unfavourable performance against budget resulting from continued shortages of labour, low mill utilisation factor, lower FFB yield and lower FFB external supply, APL continued to be in a loss making position. The lower mill utilisation factor as compared to the previous year was primarily due to the withdrawal of a key FFB supplier during the financial year 2024. FFB yield remained low in the financial year 2024 due to a shortage of foreign workers for harvesting and estate upkeep. The Group has performed an updated impairment assessment by engaging an external valuer to review the revised discounted cash flow projections. As a result of the impairment assessment, the recoverable amount of the assets was RM150,700,000, which resulted in the impairment loss of RM55,881,000 for property, plant and equipment and RM38,322,000 for right-of-use assets. The impairment loss totalling RM94,203,000 was recognised as the Group’s impairment of non-financial assets and was included as an impairment loss within the Plantation Division in the Group’s segment reporting (Note 18). The recoverable amount was determined using the fair value through cost to sell calculation (Level 3 fair value calculation), based on the valuation report obtained from the external valuer. The key assumptions used in the valuation were as follows: 2024 2023 (i) CPO price (RM/MT) 3,225 3,000 (ii) PK price (RM/MT) 1,890 1,870 (iii) FFB price (RM/MT) 600 580 (iv) FFB Yield (MT/Ha) 0.1 – 8.0 0.2 – 22.0 (v) Upkeep and cultivation cost (RM/Ha) 130 – 640 1,680 – 2,016 (vi) Harvesting and transportation cost (RM/MT) 166 – 200 120 – 180 (vii) General and administrative charges (RM/MT) 600 – 810 1,000 – 1,450 The sensitivity of the APL’s recoverable amount to changes in key assumptions is as follows: Key assumptions Sensitivity Recoverable amount lower by RM‘000 Upkeep and cultivation cost Increase by RM191/Ha – RM593/Ha (2,409) Harvesting and transportation cost Increased by RM169/MT – RM206/MT (1,806) Notes to the Financial Statements For the financial year ended 31 December 2024 91
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