13.9. Impairment of non-financial non-current assets
As at 31 December 2022, and during 2022, the market capitalisation of Grupa Kęty S.A. continued to exceed the book value of the Group net assets.
| 31.12.2022 | 31.12.2021 | |
|---|---|---|
| Market capitalisation of Grupa Kęty S.A. | 4,410,119 | 5,886,953 |
| Consolidated equity (net assets) | 1,941,586 | 1,769,443 |
| Market value excess over net assets | 2,468,533 | 4,117,510 |
The Group considered the increase in interest rates observed in 2022 to be an impairment indicator. In 2021 the Group had not identified any indicators of property, plant and equipment impairment.
Tests were performed for the particular cash-generating units.
Key assumptions used in the asset impairment test performed:
The Group identifies the respective companies as cash-generating units, except for Aluprof S.A. where the test is carried out for the particular plants:
- Bielsko-Biała (window systems manufacturing);
- Opole (roller-shutter systems manufacturing);
- Goleszów (façade systems manufacturing).
All Aluprof S.A. plants are independent as regards cash flows generation.
- The recoverable amount corresponds to the value in use of the assets estimated on the basis of the cash flow projections included in the 2023 Budget and 2025 Strategy adopted by the Management and Supervisory Boards, and the value estimated for 2026 and 2027 on the basis of forecasts for 2025.
- The cash flows included in calculations reflect the short-term and strategic plans of the respective cash-generating units, as well as their current and projected production and sales potential. Bearing in mind the applied price policies, the cost of raw materials (aluminium at the EPS and the ASS, and granulates at the FPS) is a sales price component.
- Residual value was determined assuming no increase in cash flows until 2027, without any growth in the residual period.
- Within 5-year detailed projections replacement expenditure was assumed at half the annual depreciation charges, and for the residual period, in the amount of depreciation of the last year of the detailed projection.
| 31.12.2022 | FPS (Poland) |
EPS (Poland) |
ASS (Poland) |
EPS (Exports) |
ASS (Exports) |
|---|---|---|---|---|---|
| WACC | 11.58% | 11.90% | 11.90% | 9.08% | 8.98%-15,26% |
| Net value of tested property, plant and equipment | 457,581 | 686,453 | 564,077 | 77,818 | 18,244 |
The impairment test results reflect that the discounted cash flows generated by the particular cash-generating units exceed the value of property, plant and equipment threatened with impairment.
No justified or probable changes in the key assumptions made by the management with regard to valuation of the recoverable amount of cash-generating units result in reducing the recoverable amount of property, plant and equipment subject to testing below the carrying amount of the assets.
Susceptibility analysis
The Group has carried out a susceptibility analysis based on the carried out impairment tests. The analysis covered the impact of change in the applied average interest rates used in discounting (WACC) on cash flows changes in the forecast period, i.e. from 2023 to 2027, as well as on residual value, assuming that other factors do not change.
No justified or probable changes in the key assumptions made by the management with regard to the recoverable amount of the units make the carrying amount of the units exceed their recoverable amount.