4 Segment information

The Management Board sets performance targets, approves and monitors the budgets prepared by the front office servicing units. These shall therefore perform in accordance with the strategy and targets. Since the Management Board steers the performance based on front office servicing unit, the presentation of operating segments has been changed since 2018. The operating segments are presented per front office servicing unit instead of strategic sector. The strategic sectors are the sectors in which FMO is active according to its strategic objectives. These have not changed and will be presented as such in FMO's Annual Report. In the first half year of 2019 there were no transactions between the operating segments.

FMO presents the results of its operating segments using a financial performance measure called underlying profit. Underlying profit excludes the currency effects of the results from equity investments, since all fair value changes including currency effects recorded in the profit and loss account. FMO therefore believes that the underlying profit is more relevant for understanding FMO's financial performance.

Underlying profit as presented below is an alternative performance measure and not a measure of financial performance under IFRS. A reconciliation of the underlying net profit to the net profit as reported under IFRS is made.

At June 30, 2019	Financial Institutions	Energy	Agribusiness, Food & Water	Private Equity	Partnership for impact	Other	Total

Interest income	71,092	62,544	35,369	2,440	18	17,229	188,692
Interst expenses	-18,648	-21,501	-9,255	-20,159	-289	-14,169	-84,021
Net fee and commission income	1,390	716	449	441	-	-588	2,408
Dividend income	-	-	-	11,537	-	-	11,537
Results from equity investments	-	-	-	-7,511	-		-7,511
Results from financial transactions	3,335	976	333	1,406	-	-571	5,479
Remuneration for services rendered	2,834	3,053	1,304	4,176	3,107	54	14,528
Other operating income	-	936	294	-	-	1,508	2,738
Total underlying income	60,003	46,724	28,494	-7,670	2,836	3,463	133,850

Operating expenses	-15,298	-12,706	-10,193	-13,949	-4,628	-2,968	-59,742
Total operating expenses	-15,298	-12,706	-10,193	-13,949	-4,628	-2,968	-59,742

Impairments on loans and guarantees	1,418	-15,625	1,723	-1,307	-19	-5	-13,815
Impairment on associates	-	-	-	-	-	-	-
Total impairments	1,418	-15,625	1,723	-1,307	-19	-5	-13,815

Profit before results from associates and taxation	46,123	18,393	20,024	-22,926	-1,811	490	60,293
Share in results from associates	-	-	-	2,023	-	-	2,023
Taxation	-6,823	-2,721	-2,962	3,928	268	-72	-8,382
Underlying net profit	39,300	15,672	17,062	-16,975	-1,543	418	53,934

Currency effect equity investments	-	-	-	4,010	-	-	4,010
Net profit under IFRS	39,300	15,672	17,062	-12,965	-1,543	418	57,944

Segment assets at June 30, 2019	Financial Institutions	Energy	Agribusiness, Food & Water	Private Equity	Partnership for impact	Other	Total

Loans to the private sector	1,970,171	1,759,092	909,332	46,350	18,983	64,072	4,768,000
Equity investments and investments in associates	-	-	-	1,921,135	-	-	1,921,135
Other assets	778,870	695,424	359,487	777,808	7,505	25,330	2,644,424
Total assets	2,749,041	2,454,516	1,268,819	2,745,293	26,488	89,402	9,333,559
Contingent liabilities – Effective guarantees issued	50,338	26,374	-	-	-	-	76,712
Assets under management (loans and equity investments) managed for the risk of the state	167,354	238,812	116,060	399,717	-	6,613	928,556

At June 30, 2018	Financial Institutions	Energy	Agribusiness, Food & Water	Private Equity	Partnership for impact	Other	Total

Interest income	66,452	55,880	31,002	2,573	301	7,149	163,357
Interst expenses	-22,049	-15,797	-6,091	-12,675	-176	-7,409	-64,197
Net fee and commission income	378	793	1,223	-522	-	-123	1,749
Dividend income	-	-	-	13,404	-	-	13,404
Results from equity investments	-	-	-	14,959	-		14,959
Results from financial transactions	-1,096	-2,642	-859	2,598	-	2,558	559
Remuneration for services rendered	2,498	3,759	1,412	4,127	2,437	46	14,279
Other operating income	-	-	-	-	-	726	726
Total underlying income	46,183	41,993	26,687	24,464	2,562	2,947	144,836

Operating expenses	-12,864	-11,291	-9,312	-12,120	-3,634	-2,793	-52,014
Total operating expenses	-12,864	-11,291	-9,312	-12,120	-3,634	-2,793	-52,014

Impairments on loans and guarantees	1,819	10,047	4,256	-957	39	-63	15,141
Impairment on associates	-	-	-	-	-	-	-
Total impairments	1,819	10,047	4,256	-957	39	-63	15,141

Profit before results from associates and taxation	35,138	40,749	21,631	11,387	-1,033	91	107,963
Share in results from associates	-	-	-	3,403	-	-	3,403
Taxation	-7,058	-8,185	-4,345	2,840	207	892	-15,649
Underlying net profit	28,080	32,564	17,286	17,630	-826	983	95,717

Currency effect equity investments	-	-	-	28,221	-	-	28,221
Net profit under IFRS	28,080	32,564	17,286	45,851	-826	983	123,938

Segment assets at June 30, 2018	Financial Institutions	Energy	Agribusiness, Food & Water	Private Equity	Partnership for impact	Other	Total

Loans to the private sector	1,803,815	1,538,664	816,922	42,269	16,923	49,261	4,267,854
Equity investments and investments in associates	-	-	-	1,758,706	-	-	1,758,706
Other assets	678,409	578,686	307,242	677,340	6,364	18,527	2,266,568
Total assets	2,482,224	2,117,350	1,124,164	2,478,315	23,287	67,788	8,293,128
Contingent liabilities – Effective guarantees issued	97,300	2,088	-	-	-	1,712	101,100
Assets under management (loans and equity investments) managed for the risk of the state	168,537	234,865	104,566	370,472	-	335	878,775