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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, used for the verification, have been partially adjusted in 2019. That led to lower volumes of verified CO2 equivalents than expected. In 2019, based on the new calculation scheme, 39 269 tons of CO2 equivalents were verified; whilst in 2020 34 867 tons of CO2 equivalents were produced, but are not yet verified.

Operating segments – for the year ending on 31 December 2020
in thousand EUR   Sustainable
Forest
Management
Brazil
  Sustainable
Forest
Management
Gabon
  Trading
  Carbon
& Energy
  Other
1
  Total
Revenues
 Third parties   12 037   28 899   2 496   65   0   43 497
 Intersegment   787   29       –815  
 Associates and related parties   607   2 082         2 689
Total revenues   13 431   31 009   2 496   65   –815   46 186
 Gain from changes in fair value from  biological assets   927           927
 Profit/(loss) on sale of PP&E   17   –78         –61
 Share of profit/(loss) of associates   385   –739         –354
Earnings before interest, tax, depreciation and amortization (EBITDA)   4 231   4 220   –422   6   –2 266   5 769
 Depreciation and amortization   –774   –3 062       –86   –3 922
 Impairment charges/reversals   40           40
Profit/(loss) from operating activities (EBIT)   3 497   1 158   –422   6   –2 352   1 887
 Financial income                       191
 Financial expenses                       –3 148
Earnings before tax (EBT)                       –1 070
 Income taxes   –770   –357   –8     24   –1 111
                         
Segment assets   56 213   51 238   1 989   663   –659   109 443
 Investments in associates   980   2 360         3 340
 Capital expenditures   353   3 636       5   3 994
Segment liabilities   38 189   45 130   810   136   –14 130   70 134
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 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 PP&E   91   404         495
 Share of profit/(loss) 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   –649           –649
Profit/(loss) from operating activities (EBIT)   15 266   1 680   99   7   –3 095   13 956
 Financial income                       640
 Financial expenses                       –2 985
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.
Geographic information
in thousand EUR       2020       2019
Revenues
Europe   25 458   55.1%   24 559   55.3%
Latin America   3 596   7.8%   2 885   6.5%
Africa   6 770   14.7%   7 201   16.2%
Asia   6 214   13.5%   6 448   14.5%
Australia   197   0.4%   263   0.6%
North America   3 951   8.5%   3 024   6.9%
Total revenues   46 186   100.0%   44 380   100.0%
 
Location of non-current assets
Switzerland   486   0.6%   123   0.1%
European Union   3   0.0%   3   0.0%
Latin America   50 225   61.1%   71 109   71.6%
Africa   31 443   38.3%   28 119   28.3%
Total non-current assets   82 157   100.0%   99 354   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.