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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
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
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.
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
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
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.
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.