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 four 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 2015 in the mining segment, customers whose share in sales exceeded 10% of the total revenue were: GDF Suez Energia S.A. (20%), and ENERGA Elektrownie Ostrołęka S.A. (11%). In 2014 no single customer was responsible for more than 10% of revenues of any segment.
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 of non-financial non-current assets.
Information about geographical areas
The Group's operations were conducted during 2015 and 2014 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 2015:
| Trade | Distribution | Production | Mining | All other segments | 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 | |||||||
*Impairment loss on goodwill relates to the production and mine segment
(b) Segment reporting for the period from 1 January to 31 December 2014:
| Trade | Distribution | Production | All other segments | Eliminations | Total | |
|---|---|---|---|---|---|---|
| Net sales revenue | 3 733 830 | 2 890 362 | 3 055 797 | 175 406 | - | 9 855 395 |
| Inter-segment sales | 447 560 | 97 186 | 433 964 | 243 013 | (1 221 723) | - |
| Total net sales revenue | 4 181 390 | 2 987 548 | 3 489 761 | 418 419 | (1 221 723) | 9 855 395 |
| Total expenses | (4 075 665) | (2 257 291) | (3 068 436) | (410 616) | 1 193 381 | (8 618 627) |
| Segment profit/loss | 105 725 | 730 257 | 421 325 | 7 803 | (28 342) | 1 236 768 |
| Depreciation | (757) | (429 144) | (286 666) | (14 457) | ||
| Impairment loss on non-financial non-current assets | - | - | (30 556) | - | ||
| EBITDA | 106 482 | 1 159 401 | 738 547 | 22 260 | ||
| % of net sales revenue | 2,6% | 38,8% | 21,2% | 5,3% | ||
| Unassigned Group costs (general and administrative expenses) | (50 293) | |||||
| Operating profit | 1 186 475 | |||||
| Finance cost | (125 483) | |||||
| Finance income | 81 178 | |||||
| Impairment loss on goodwill* | (3 131) | |||||
| Dividend income | 3 355 | |||||
| Share in profit/(loss) of associates | 708 | |||||
| Income tax | (233 980) | |||||
| Net profit | 909 122 | |||||
| Share of non-controlling interests | 803 |
*Impairment loss on goodwill relates to the production segment
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 segments | 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) |
Other segment reporting information as at 31 December 2014 and for the 12-month period ended as at that date:
| Trade | Distribution | Production | All other segments | Eliminations | Total | |
|---|---|---|---|---|---|---|
| Property, plant and equipment | 16 337 | 7 020 361 | 6 600 818 | 269 691 | (304 620) | 13 602 587 |
| Trade and other receivables | 791 414 | 596 613 | 715 989 | 143 267 | (565 072) | 1 682 211 |
| Total | 807 751 | 7 616 974 | 7 316 807 | 412 958 | (869 692) | 15 284 798 |
| ASSETS excluded from segmentation | 2 823 242 | |||||
| - including property, plant and equipment | 15 355 | |||||
| - including trade and other receivables | 102 656 | |||||
| TOTAL: ASSETS | 18 108 040 | |||||
| Trade and other liabilities | 199 244 | 507 328 | 443 058 | 164 844 | (293 829) | 1 020 645 |
| Equity and liabilities excluded from segmentation | 17 087 395 | |||||
| - including trade and other liabilities | 118 287 | |||||
| TOTAL: EQUITY AND LIABILITIES | 18 108 040 | |||||
| for the 12-month period ended 31 December 2014 | ||||||
| Capital expenditure for tangible and intangible fixed assets | 1 019 | 822 336 | 1 579 772 | 87 323 | (71 488) | 2 418 962 |
| Capital expenditure for tangible and intangible fixed assets excluded from segmentation | 6 267 | |||||
| Depreciation and amortization | 757 | 429 144 | 286 666 | 14 457 | (9 363) | 721 661 |
| Depreciation and amortization excluded from segmentation | 6 747 | |||||
| Recognition/(derecognition/utilization) of receivables allowance | (197) | 3 753 | 507 | (2 210) | (2) | 1 851 |