Operating segments
The Group realises its business goals through four reportable segments managed separately because they require different management strategies (including production, sales and marketing strategies). For each segment the Management Board of the Group reviews internal management reports on a monthly basis.
The following summary describes the operations of each of the Group’s reportable segments:
- Fertilizers-Agro Segment includes manufacturing and sales of the following products:
– nitrogenous fertilizers (Pulrea®, Saletrzak 27 Standard, Saletrzak with boron 27+B Standard, Salmag®, Slamag® with boron, ZAKsan® (Kędzierzyn ammonium nitrate), Ammonium nitrate 30 Macro, mocznik.pl®, granulated urea 46%, PULGRAN®, PULAN®, RSM®, PULREA®),
– nitrogenous fertilizers with sulphur (ammonium sulphate AS21, Saletrosan®30, Saletrosan® 26, POLIFOSKA® 21, Salmag with sulphur®, Pulgran®S, Pulsar®, Pulaska®, RSM®S),
– compound fertilizers (POLIFOSKA® 4, POLIFOSKA® 5, POLIFOSKA® 6, POLIFOSKA® 8, POLIFOSKA® 12, POLIFOSKA® M, POLIFOSKA® TYTAN, POLIFOSKA® START, POLIFOSKA® Petroplon, POLIMAG® S, POLIFOSKA®PLUS, Amofoska® NPK 5-10-25 +0,1B, Amofoska® NPK 4-16-18, Amofoska® NPK 4-10-28 +2,5Mg+0,1B, Amofoska® NPK 4-12-20, Amofoska® NPKMg 4-12-12+2,5, Amofoska® NPK 4-14-32, Amofoska® Corn NPK 4-10-22 +2,5Mg+0,2Zn),
– physpho-nitrogenous fertilizers (POLIDAP® TYTAN, POLIDAP®, POLIDAP® light, Super FOS DAR 40™),
– ammonia,
– concentrated nitric acid,
– technical gases;
- Plastics Segment includes manufacturing and sales of the following products:
– Tarnamid® (PA6) and its modified forms,
– Tarnoform® (POM) and its modified forms,
– alphalon™ (PA6),
– Tarnoprop C i H (PPC, modified PPH),
– Tarnodur A (modified PBT),
– Tarnamid® A (modified PA66),
– caprolactam,
– Polyamide 11 and 12 tubes, polyethylene tubes, Polyamide 6 tubes,
– Polyamide Casings FOOD GRADE;
- Chemicals Segment includes manufacturing and sales of the following products:
– oxo alcohols (2- ethylhexanol, N-butanol, Izobutanol, Octyl alkohol F),
– plasticizers (Oxoplast® O, Oxoviflex®, Oxoplast Medica®, Oxoplast® PH),
– pigments (Tytanpol®),
– melamine,
– Iron (II) sulphate (Fespol®),
– special solutions based on urea and ammonia, including: water urea solution (NOXy®), 32.5%, 40% and 45% urea solution (PULNOx®), ammonia solution (LIKAM®);
- Energy Segment includes activities that concern production of electricity and heat for the purposes of chemical installations and selling electricity to customers connected to electric network, with whom the contracts were signed;
- Other Activities Segment comprising other activities, such as laboratory services, manufacturing of catalysts (iron-chromium catalysts, copper catalysts, iron catalysts), rental of properties and other activities which cannot be allocated to other segments. None of these activities met the quantitative criteria to be separated as reportable segment in 2015 and 2014.
Information regarding the results of each reportable segment is set out below. Performance of each segment is measured based on sales revenue, EBIT and EBITDA.
Revenue, expenses and financial result of operating segments for the 12 month period ended 31 December 2015
| Fertilizers-Agro | Plastics | Chemicals | Energy | Other Activities | Total | |
|---|---|---|---|---|---|---|
| External revenues | 6 057 906 | 1 247 971 | 2 302 233 | 209 236 | 207 059 | 10 024 405 |
| Inter-segment revenue | 2 190 855 | 308 990 | 992 745 | 2 712 905 | 903 264 | 7 108 759 |
| Total revenue | 8 248 761 | 1 556 961 | 3 294 978 | 2 922 141 | 1 110 323 | 17 133 164 |
| Operating expenses, including:(-) | (7 407 674) | (1 603 980) | (3 224 385) | (2 924 792) | (1 077 999) | (16 238 830) |
| Selling and distribution expenses (-) | (433 228) | (52 742) | (145 660) | (121) | (1 563) | (633 314) |
| Administrative expenses (-) | (385 839) | (114 235) | (172 699) | (14 137) | (49 636) | (736 546) |
| Other income | 21 041 | 4 677 | 5 902 | 9 234 | 6 810 | 47 664 |
| Other expenses(-) | (13 343) | (16 475) | (37 313) | (2 996) | (41 860) | (111 987) |
| Segment results from operating activities EBIT | 848 785 | (58 817) | 39 182 | 3 587 | (2 726) | 830 011 |
| Finance income | – | – | – | – | – | 42 910 |
| Finance costs (-) | – | – | – | – | – | (47 576) |
| Share of profit of equity-accounted investees | – | – | – | – | – | 13 737 |
| Profit before tax | – | – | – | – | – | 839 082 |
| Tax expense | – | – | – | – | – | 147 234 |
| Profit for the year | – | – | – | – | – | 691 848 |
| EBIT* | 848 785 | (58 817) | 39 182 | 3 587 | (2 726) | 830 011 |
| Depreciation and amortisation | 149 275 | 48 417 | 95 540 | 74 307 | 80 839 | 448 378 |
| Unallocated depreciation and amortisation | – | – | – | – | – | 36 432 |
| EBITDA** | 998 060 | (10 400) | 134 722 | 77 894 | 78 113 | 1 314 821 |
* EBIT is calculated as results from operating activities presented in the statement of profit or loss, adjusted for the gain on bargain purchase.
** EBITDA is calculated as results from operating activities increased by depreciation and amortisation, adjusted for the gain on bargain purchase.
Revenue, expenses and financial result of operating segments for the 12 month period ended 31 December 2014
| Continued operations | Fertilizers-Agro | Plastics | Chemicals | Energy | Other Activities | Total |
|---|---|---|---|---|---|---|
| External revenues | 5 580 374 | 1 460 155 | 2 505 638 | 194 621 | 157 688 | 9 898 476 |
| Inter-segment revenue | 2 323 040 | 348 170 | 1 050 591 | 2 933 148 | 802 963 | 7 457 912 |
| Total revenue | 7 903 414 | 1 808 325 | 3 556 229 | 3 127 769 | 960 651 | 17 356 388 |
| Operating expenses, including:(-) | (7 468 963) | (1 899 986) | (3 568 630) | (3 123 579) | (949 441) | (17 010 599) |
| Selling and distribution expenses (-) | (395 845) | (53 566) | (130 041) | (82) | (1 611) | (581 145) |
| Administrative expenses (-) | (367 528) | (123 773) | (184 559) | (12 565) | (51 552) | (739 977) |
| Other income | 14 929 | 12 923 | 4 778 | 10 336 | 15 455 | 58 421 |
| Other expenses(-) | (13 960) | (2 678) | (47 709) | (8 582) | (29 051) | (101 980) |
| Segment results from operating activities EBIT | 435 420 | (81 416) | (55 332) | 5 944 | (2 386) | 302 230 |
| Finance income | – | – | – | – | – | 45 767 |
| Finance costs (-) | – | – | – | – | – | (58 398) |
| Share of profit of equity-accounted investees | – | – | – | – | – | 13 940 |
| Profit before tax | – | – | – | – | – | 303 539 |
| Result on discontinued operations | – | – | – | – | – | (753) |
| Tax expense | – | – | – | – | – | (37 731) |
| Profit for the year | – | – | – | – | – | 265 055 |
| EBIT* | 435 420 | (81 416) | (55 332) | 5 944 | (2 386) | 302 230 |
| Depreciation and amortisation | 158 972 | 47 870 | 100 947 | 74 050 | 80 285 | 462 124 |
| Unallocated depreciation and amortisation | – | – | – | – | – | 58 051 |
| EBITDA** | 594 392 | (33 546) | 45 615 | 79 994 | 77 899 | 822 405 |
* EBIT is calculated as results from operating activities presented in the statement of profit or loss, adjusted for the gain on bargain purchase.
** EBITDA is calculated as results from operating activities increased by depreciation and amortisation, adjusted for the gain on bargain purchase.
Assets and liabilities of operating segments as at 31 December 2015
| Fertilizers-Agro | Plastics | Chemicals | Energy | Other Activities | Total | |
|---|---|---|---|---|---|---|
| Segment assets | 3 404 875 | 1 052 338 | 1 618 678 | 1 476 292 | 1 169 255 | 8 721 438 |
| Unallocated assets | – | – | – | – | – | 1 932 806 |
| Equity accounted investees | – | – | – | – | – | 122 925 |
| Total assets | 3 404 875 | 1 052 338 | 1 618 678 | 1 476 292 | 1 169 255 | 10 777 169 |
| Segment liabilities | 955 523 | 238 205 | 237 179 | 515 746 | 281 806 | 2 228 459 |
| Unallocated liabilities | – | – | – | – | – | 1 412 489 |
| Total liabilities | 955 523 | 238 205 | 237 179 | 515 746 | 281 806 | 3 640 948 |
Assets and liabilities of operating segments as at 31 December 2014
| Fertilizers-Agro | Plastics | Chemicals | Energy | Other Activities | Total | |
|---|---|---|---|---|---|---|
| Segment assets | 3 158 258 | 1 014 418 | 1 676 461 | 1 263 242 | 940 878 | 8 053 257 |
| Unallocated assets | – | – | – | – | – | 1 788 668 |
| Unallocated assets | – | – | – | – | – | 106 407 |
| Total assets | 3 158 258 | 1 014 418 | 1 676 461 | 1 263 242 | 940 878 | 9 948 332 |
| Segment liabilities | 852 180 | 212 372 | 248 900 | 363 119 | 122 035 | 1 798 606 |
| Unallocated liabilities | – | – | – | – | – | 1 661 590 |
| Total liabilities | 852 180 | 212 372 | 248 900 | 363 119 | 122 035 | 3 460 196 |
Other information related to operating segments for the year ended 31 December 2015
| Fertilizers-Agro | Plastics | Chemicals | Energy | Other Activities | Total | |
|---|---|---|---|---|---|---|
| Capital expenditure on property, plant and equipment | 390 173 | 108 561 | 109 760 | 274 652 | 116 559 | 999 705 |
| Capital expenditure on investment property | – | – | – | – | 1 191 | 1 191 |
| Capital expenditure on intangible assets | 28 371 | 868 | 457 | 165 | 15 834 | 45 695 |
| Unallocated capital expenditure | – | – | – | – | – | 23 285 |
| Total capital expenditure | 418 544 | 109 429 | 110 217 | 274 817 | 133 584 | 1 069 876 |
| Segment amortisation | 149 275 | 48 417 | 95 540 | 74 307 | 80 839 | 448 378 |
| Unallocated amortisation | – | – | – | – | – | 36 432 |
| Total amortisation | 149 275 | 48 417 | 95 540 | 74 307 | 80 839 | 484 810 |
Other information related to operating segments for the year ended 31 December 2014
| Fertilizers-Agro | Plastics | Chemicals | Energy | Other Activities | Total | |
|---|---|---|---|---|---|---|
| Capital expenditure on property, plant and equipment | 189 308 | 36 667 | 133 692 | 174 493 | 97 441 | 631 601 |
| Capital expenditure on investment property | 1 633 | – | – | – | 327 | 1 960 |
| Capital expenditure on intangible assets | 32 821 | 551 | 202 | 749 | 8 485 | 42 808 |
| Unallocated capital expenditure | – | – | – | – | – | 37 864 |
| Total capital expenditure | 223 762 | 37 218 | 133 894 | 175 242 | 106 253 | 714 233 |
| Segment amortisation | 158 972 | 47 870 | 100 947 | 74 050 | 80 285 | 462 124 |
| Unallocated amortisation | – | – | – | – | – | 58 051 |
| Total amortisation | 158 972 | 47 870 | 100 947 | 74 050 | 80 285 | 520 175 |
Description of impairment losses recognised by the Group was presented in Note 10 and 11
