19 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Significant impairment of property, plant and equipment (continued) Financial year ended 31 December 2024 (continued) e) MSM Sugar Refinery (Johor) Sdn. Bhd. (“MSM Johor”) (continued) The recoverable amount of MSM Johor’s assets calculated based on a value in use calculation was RM1,388 million, which exceeded the carrying value by RM207 million (2023: recoverable amount was RM1,340 million, which exceeded the carrying value by RM159 million). The calculation was based on single scenario assessment (2023: probability weighted average assessment based on three scenarios). The carrying amount of MSM Johor CGU includes property, plant and equipment, right-of-use assets and working capital. The key assumptions used for the value in use calculation are: 2024 2023 Key assumptions Selling price, RM/MT* 2,685 – 4,470 2,967 – 4,564 Selling price of packed products subject to price control, RM/MT# 3,690 3,690 – 4,190 Raw sugar price, RM/lb 0.84 – 0.91 0.96 – 1.04 Utilisation factor 28.6% – 60.4% 26.6% – 59.0% Sales volume, MT’000 286 – 604 266 – 587 Freight charges, RM/MT 206 – 217 157.5 – 180.0 Natural gas price, RM/MMBtu 44.5 – 46.4 44.5 – 48.4 Long term growth rate % 2.0% 2.0% Discount rate % (pre-tax) 12.4% 12.4% * Excluding products subject to price control # In deriving the key assumption of selling price of products subject to price control, the Directors of the MSM Holdings Berhad Group (“MSM Group”) have applied three probability weighted scenario for prior year on the assumptions surrounding the selling prices based on the management’s ongoing discussion with relevant authorities. In 2024, the Directors of MSM Group have applied a single scenario assessment to the selling price assumption for products subject to price control, which is fixed at RM3,690/MT. This is based on the Directors’ assessment of the latest development in the pricing mechanism of the products subject to price control. The sensitivity on the MSM Johor’s assets VIU recoverable amount to key assumptions are as follows: Key assumptions Sensitivity 2024 VIU lower by RM’000 2023 Changes in carrying amount by RM‘000 Selling price of product subject to price control Selling price remain at RM2,690/MT* (1,143,737) (1,267,012) * Represents existing ceiling price for products subject to price control Notes to the Financial Statements For the financial year ended 31 December 2024 95
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