3. Financial information by segment
The activities of the Group are primarily organized and presented in four operating segments supported by a central corporate office. Management monitors and evaluates EBITDA of all segments separately for the purpose of making decisions about resources to be allocated and of assessing performance.
- Sustainable Forest Management Brazil: operations active in the sustainable management of tropical forests and the processing of tropical timber in Brazil
- Sustainable Forest Management Gabon: operations active in the sustainable management of tropical forests and the processing of tropical timber in Gabon
- Trading: trading of timber from external sources in Switzerland
- Carbon & Energy: trading of Certified Emission Reductions (CERs)
Precious Woods’ forests in Brazil and Gabon are managed in a sustainable manner, which means that not more timber is harvested than can simultaneously grow back, and that the value of the forest is preserved. An integral part of Precious Woods’ approach to sustainable forestry is the use of waste wood to produce electricity and the registration and sale of carbon emission reductions (CERs). The calculation parameters of the validation and verification standard CDM (Clean Development Mechanism) for project activities, also used in 2019 for the verification, have been partially adjusted. That led to lower volumes of verified CO2 equivalents than expected. For 2017, the verification confirmed 34 024 tons of CO2 equivalents – expected were 51 596 tons, and for 2018 the confirmed amount of CO2 equivalents totalizes to 29 868 tons – instead of the expected 54 664 tons. In 2019, based on the new calculation scheme, 34 651 tons of CO2 equivalents were produced, but are not yet verified.
Operating segments – for the year ending on 31 December 2019
| in thousand EUR | Sustainable Forest Management Brazil |
Sustainable Forest Management Gabon |
Trading |
Carbon & Energy |
Other 1 |
Total |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | ||||||||||||
| Third parties | 12 476 | 27 034 | 3 935 | 73 | – | 43 518 | ||||||
| Intersegment | 74 | 43 | – | – | –117 | – | ||||||
| Associates and related parties | 862 | – | – | – | – | 862 | ||||||
| Total revenues | 13 412 | 27 077 | 3 935 | 73 | –117 | 44 380 | ||||||
| Initial recognition of fair value from biological assets | 13 455 | – | – | – | – | 13 455 | ||||||
| Profit/(loss) on sale of fixed assets and affiliates | 91 | 404 | – | – | – | 495 | ||||||
| Share of profit of associates | 438 | – | – | – | – | 438 | ||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 16 407 | 4 998 | 99 | 7 | –3 061 | 18 450 | ||||||
| Depreciation and amortization | –494 | –3 319 | – | – | –33 | –3 845 | ||||||
| Impairment charges/reversals | –649 | – | – | – | – | –649 | ||||||
| Profit/(loss) from operating activities (EBIT) | 15 266 | 1 680 | 99 | 7 | –3 095 | 13 956 | ||||||
| Financial income and expenses | –672 | –1 943 | –9 | – | 279 | –2 345 | ||||||
| Earnings before tax (EBT) | – | 11 611 | ||||||||||
| Income taxes | –1 619 | –1 976 | 49 | – | –92 | –3 638 | ||||||
| Segment assets | 78 864 | 49 995 | 2 091 | 555 | –429 | 131 076 | ||||||
| Investments in associates | 1 066 | – | – | – | – | 1 066 | ||||||
| Capital expenditures | 695 | 4 979 | – | – | 6 | 5 680 | ||||||
| Segment liabilities | 64 278 | 42 654 | 1 137 | 129 | –32 227 | 75 972 | ||||||
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1 The eliminations and adjustments consist of the intersegment eliminations and the results from Precious Woods Holding Ltd, the Luxembourg entities and Precious Woods Management Ltd, which are not allocated to a specific segment.
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Operating segments – for the year ending on 31 December 2018
| in thousand EUR | Sustainable Forest Management Brazil |
Sustainable Forest Management Gabon |
Trading |
Carbon & Energy |
Other 1 |
Total |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | ||||||||||||
| Third parties | 11 631 | 29 293 | 4 664 | – | – | 45 588 | ||||||
| Intersegment | 602 | – | – | – | –602 | – | ||||||
| Associates and related parties | 761 | – | – | – | – | 761 | ||||||
| Total revenues | 12 994 | 29 293 | 4 664 | – | –602 | 46 349 | ||||||
| Profit/(loss) on sale of fixed assets and affiliates | 23 | – | – | – | 1 | 24 | ||||||
| Share of profit of associates | 270 | – | – | – | – | 270 | ||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 1 608 | 5 526 | 433 | –0 | –2 456 | 5 111 | ||||||
| Depreciation and amortization | –417 | –3 000 | – | – | –18 | –3 435 | ||||||
| Impairment charges | 19 | – | – | – | – | 19 | ||||||
| Profit/(loss) from operating activities (EBIT) | 1 209 | 2 526 | 433 | –0 | –2 473 | 1 695 | ||||||
| Financial income and expenses | –901 | –1 670 | 272 | – | –452 | –2 751 | ||||||
| Earnings before tax (EBT) | – | –1 056 | ||||||||||
| Income taxes | –310 | –332 | –50 | – | 31 | –661 | ||||||
| Segment assets | 21 736 | 48 052 | 2 887 | 479 | 281 | 73 434 | ||||||
| Investments in associates | 799 | – | – | – | – | 799 | ||||||
| Capital expenditures | 980 | 4 019 | – | – | 18 | 5 017 | ||||||
| Segment liabilities | 51 664 | 37 515 | 1 282 | 224 | –33 105 | 57 580 | ||||||
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1 The eliminations and adjustments consist of the intersegment eliminations and the results from Precious Woods Holding Ltd, the Luxembourg entities and Precious Woods Management Ltd, which are not allocated to a specific segment.
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Geographic information
| in thousand EUR | 2019 | 2018 | ||||||
|---|---|---|---|---|---|---|---|---|
| Revenues | ||||||||
| Europe | 24 559 | 55.4% | 28 386 | 61.1% | ||||
| Latin America | 2 885 | 6.5% | 1 666 | 3.6% | ||||
| Africa | 7 201 | 16.2% | 6 970 | 15.0% | ||||
| Asia | 6 448 | 14.5% | 8 352 | 18.0% | ||||
| Australia | 263 | 0.6% | 45 | 0.1% | ||||
| North America | 3 024 | 6.8% | 930 | 2.0% | ||||
| Total revenues | 44 380 | 100.0% | 46 349 | 100.0% | ||||
| Location of non-current assets | ||||||||
| Switzerland | 123 | 0.1% | 77 | 0.2% | ||||
| European Union | 3 | 0.0% | 3 | 0.0% | ||||
| Latin America | 71 109 | 71.6% | 14 344 | 35.4% | ||||
| Africa | 28 119 | 28.3% | 26 070 | 64.4% | ||||
| Total non-current assets | 99 354 | 100.0% | 40 494 | 100.0% | ||||
Accounting policies
Operating segments are reported in the manner consistent with the internal reporting to the chief operating decision maker, which is the Group Management of Precious Woods. Group Management is responsible for allocating resources and assessing the performance of the operating segments.