The management of the Company’s activities is conducted by division of operations into segments, which are separated based on types of products and services offered. The Group has five operating segments:
- trade – purchase and sale of electricity,
- distribution – electricity transmission services,
- production – electricity and heat production,
- mining - production and sale of coal, companies supporting the activities of the mine,
- other activities - maintenance and modernization of road lighting equipment, transport, construction services, travel services, health care services.
Segment revenue is generated from sales to external clients and transactions with other segments, which are directly attributable to a given segment. In 2016 in the mining segment, customers whose share in sales exceeded 10% of the total revenue was ENGIE Energia Polska (22%). Segment costs include costs of goods sold to external clients and costs of transactions with other Group segments, which result from operations of a given segment and may be directly allocated to a given segment.
Market prices are used in inter-segment transactions, which allow individual units to earn a margin sufficient to carry out independent operations in the market. EBITDA is defined as operating loss/profit decreased by depreciation and impairment loss on non-financial non-current assets.
Information about geographical areas
The Group's operations were conducted during 2016 and 2015 in one geographical area i.e. on the territory of Poland.
Financial Results by Segments:
a) Segment reporting for the period from 1 January to 31 December 2016:
| Trade | Distribution | Production | Mining | All other activities | Eliminations | Total | |
|---|---|---|---|---|---|---|---|
| Net sales revenue | 6 248 669 | 3 031 528 | 843 330 | 965 990 | 166 161 | - | 11 255 678 |
| Inter-segment sales | 930 097 | 52 350 | 2 466 984 | 819 991 | 367 740 | (4 637 162) | - |
| Total net sales revenue | 7 178 766 | 3 083 878 | 3 310 314 | 1 785 981 | 533 901 | (4 637 162) | 11 255 678 |
| Total expenses | (7 025 563) | (2 452 271) | (3 131 563) | (1 544 792) | (534 648) | 4 605 677 | (10 083 160) |
| Segment profit/loss | 153 203 | 631 607 | 178 751 | 241 189 | (747) | (31 485) | 1 172 518 |
| Depreciation | (793) | (479 720) | (247 931) | (363 238) | (28 260) | ||
| Impairment loss on non-financial non-current assets | - | - | (90 808) | (7 352) | - | ||
| EBITDA | 153 996 | 1 111 327 | 517 490 | 611 779 | 27 513 | ||
| % of net sales revenue | 2.2% | 36.0% | 15.6% | 34.3 % | 5.2% | ||
| Unassigned Group costs (general and administrative expenses) | (53 204) | ||||||
| Operating profit | 1 119 314 | ||||||
| Finance cost | (127 010) | ||||||
| Finance income | 76 350 | ||||||
| Dividend income | 148 | ||||||
| Income tax | (219 889) | ||||||
| Net profit | 848 913 | ||||||
| Share of non-controlling interests | 64 520 |
Financial Results by Segments:
b) Segment reporting for the period from 1 January to 31 December 2015:
| Trade | Distribution | Production | Mining | All other activities | Eliminations | Total | |
|---|---|---|---|---|---|---|---|
| Net sales revenue | 5 300 931 | 3 000 392 | 1 127 204 | 226 676 | 193 189 | - | 9 848 392 |
| Inter-segment sales | 631 119 | 69 089 | 2 404 255 | 135 904 | 355 967 | (3 596 334) | - |
| Total net sales revenue | 5 932 050 | 3 069 481 | 3 531 459 | 362 580 | 549 156 | (3 596 334) | 9 848 392 |
| Total expenses | (5 806 738) | (2 367 422) | (4 436 926) | (246 914) | (549 497) | 3 538 719 | (9 868 778) |
| Segment profit/loss | 125 312 | 702 059 | (905 467) | 115 666 | (341) | (57 615) | (20 386) |
| Depreciation | (783) | (436 823) | (299 255) | (40 441) | (19 593) | ||
| Impairment loss on non-financial non-current assets | - | - | (1 501 621) | - | - | ||
| EBITDA | 126 095 | 1 138 882 | 895 409 | 156 107 | 19 252 | ||
| % of net sales revenue | 2.1% | 37.1% | 25.4% | 43.1 % | 3.5% | ||
| Unassigned Group costs (general and administrative expenses) | (47 739) | ||||||
| Settlement of pre-existing relationship related to acquisition | (94 000) | ||||||
| Operating loss | (162 125) | ||||||
| Finance cost | (81 751) | ||||||
| Finance income | 84 497 | ||||||
| Impairment loss on goodwill* | (251 432) | ||||||
| Dividend income | 1 833 | ||||||
| Income tax | 10 100 | ||||||
| Net loss | (398 878) | ||||||
| Share of non-controlling interests | 35 979 |
Other segment reporting information as at 31 December 2016 and for the 12-month period ended as at that date:
| Trade | Distribution | Production | Mining | All other activities | Eliminations | Total | ||
|---|---|---|---|---|---|---|---|---|
| Property, plant and equipment | 15 762 | 7 886 676 | 7 802 643 | 2 760 196 | 313 404 | (409 966) | 18 368 715 | |
| Trade and other receivables | 983 072 | 505 957 | 486 950 | 242 258 | 115 628 | (548 538) | 1 785 327 | |
| Total | 998 834 | 8 392 633 | 8 289 593 | 3 002 454 | 429 032 | (958 504) | 20 154 042 | |
| ASSETS excluded from segmentation | 4 382 477 | |||||||
| - including property, plant and equipment | 13 783 | |||||||
| - including trade and other receivables | 69 851 | |||||||
| TOTAL: ASSETS | 7 941 548 | 24 536 519 | ||||||
| Trade and other liabilities | 390 417 | 347 056 | 346 744 | 273 016 | 206 956 | (458 739) | 1 105 450 | |
| Equity and liabilities excluded from segmentation | 23 431 069 | |||||||
| - including trade and other liabilities | 84 523 | |||||||
| TOTAL: EQUITY AND LIABILITIES | 229 234 | 431 521 | 473 737 | 197 420 | 211 279 | (430 559) | 24 536 519 | |
| for the 12-month period ended 31 December 2016 | ||||||||
| Capital expenditure for tangible and intangible fixed assets | 1 212 | 923 929 | 1 382 682 | 306 620 | 71 552 | (27 013) | 2 658 982 | |
| Capital expenditure for tangible and intangible fixed assets excluded from segmentation | - | |||||||
| Depreciation and amortization | 793 | 479 720 | 247 931 | 363 238 | 28 260 | (11 402) | 1 108 540 | |
| Depreciation and amortization excluded from segmentation | 1 810 | |||||||
| Recognition/(derecognition/utilization) of receivables allowance | 3 534 | 3 198 | 1 876 | 5 090 | (1 121) | 745 | 13 322 | |
Other segment reporting information as at 31 December 2015 and for the 12-month period ended as at that date:
| Trade | Distribution | Production | Mining | All other activities | Eliminations | Total | ||
|---|---|---|---|---|---|---|---|---|
| Property, plant and equipment | 18 521 | 7 486 881 | 6 766 080 | 2 889 367 | 289 240 | (387 861) | 17 062 228 | |
| Trade and other receivables | 911 560 | 453 446 | 401 867 | 232 143 | 105 722 | (474 767) | 1 629 971 | |
| Total | 930 081 | 7 940 327 | 7 167 947 | 3 121 510 | 394 962 | (862 628) | 18 692 199 | |
| ASSETS excluded from segmentation | 4 296 797 | |||||||
| - including property, plant and equipment | 12 750 | |||||||
| - including trade and other receivables | 131 096 | |||||||
| TOTAL: ASSETS | 7 941 548 | 22 988 996 | ||||||
| Trade and other liabilities | 229 234 | 429 474 | 473 841 | 197 420 | 209 924 | (429 126) | 1 110 767 | |
| Equity and liabilities excluded from segmentation | 21 878 229 | |||||||
| - including trade and other liabilities | 129 080 | |||||||
| TOTAL: EQUITY AND LIABILITIES | 229 234 | 431 521 | 473 737 | 197 420 | 211 279 | (430 559) | 22 988 996 | |
| for the 12-month period ended 31 December 2015 | ||||||||
| Capital expenditure for tangible and intangible fixed assets | 2 079 | 925 146 | 1 953 791 | 49 244 | 55 416 | (34 740) | 2 950 936 | |
| Capital expenditure for tangible and intangible fixed assets excluded from segmentation | - | |||||||
| Depreciation and amortization | 783 | 436 823 | 299 255 | 40 441 | 19 593 | (10 439) | 786 456 | |
| Depreciation and amortization excluded from segmentation | 3 919 | |||||||
| Recognition/(derecognition/utilization) of receivables allowance | (1 537) | 1 975 | (6 555) | 1 439 | (1 596) | (4) | (6 278) |
