Segment reporting by operating segments

The Management Board sets performance targets, approves and monitors the budgets prepared by servicing units. Since 2018, our Management Board steers on servicing units instead of strategic sectors, implying a change in segment reporting in comparison to prior years.

FMO's strategic sectors represent the economic sectors in which FMO operates. The three strategic sectors are Agribusiness Food & Water, Financial Institutions and Energy, which represent economic sectors. FMO's Management Board steers on the following six servicing units: Agribusiness, Food & Water, Financial Institutions and Energy, Private Equity, Partnership for impact and Other. In 2019, two transactions are identified which are reallocated to a different servicing unit.

FMO presents the results of the operating segments using a financial performance measure called underlying profit. Underlying profit excludes the EUR/USD currency effects related to the results from equity investments, since all fair value changes including currency effects are now recorded in the profit and loss account instead of shareholder's equity since the adoption of IFRS 9. In FMO's view the underlying profit is more relevant for understanding financial performance.

Underlying profit as presented below is an alternative performance measure. A reconciliation of the underlying net profit to the net profit as reported under the statement of profit and loss is performed in the table here below.

December 31, 2019

Financial Institutions

Energy

Agribusiness, Food & Water

Private Equity

Partnership for impact

Other

Total

        

Interest income

139,289

131,997

66,529

2,500

552

35,392

376,259

Interest expenses

-35,655

-40,961

-18,279

-39,410

-547

-26,189

-161,041

Net fee and commission income

2,339

-5,329

-1,042

768

-

-750

-4,014

Dividend income

-

-

-

29,645

-

-

29,645

Results from equity investments

-

-

-

48,402

-

 

48,402

Results from financial transactions

1,417

-8,793

-7,938

347

-

-5,033

-20,000

Remuneration for services rendered

6,493

5,406

2,850

8,470

6,643

199

30,061

Gains and losses due to derecognition

1,569

2,383

-37

-

-

1

3,916

Other operating income

2,159

-

-

-

-

-464

1,695

Total underlying income

117,611

84,703

42,083

50,722

6,648

3,156

304,923

        

Operating expenses

-33,265

-27,881

-22,958

-30,434

-9,180

-6,701

-130,419

Total operating expenses

-33,265

-27,881

-22,958

-30,434

-9,180

-6,701

-130,419

        

Impairments on loans and guarantees

-3,298

-43,191

-42,880

-2,163

-39

-357

-91,928

Total impairments

-3,298

-43,191

-42,880

-2,163

-39

-357

-91,928

        

Profit before results from associates and taxation

81,048

13,631

-23,755

18,125

-2,571

-3,902

82,576

Share in results from associates

-

-

-

11,077

-

-

11,077

Taxation

-15,954

-2,683

4,676

14,660

506

768

1,973

Underlying net profit

65,094

10,948

-19,079

43,862

-2,065

-3,134

95,626

        

Currency effect equity investments

-

-

-

24,786

-

-

24,786

Net profit under IFRS

65,094

10,948

-19,079

68,648

-2,065

-3,134

120,412

December 31, 2018

Financial Institutions

Energy

Agribusiness, Food & Water

Private Equity

Partnership for impact

Other

Total

        

Interest income

121,748

123,853

63,116

4,135

604

22,639

336,095

Interest expenses

-29,539

-31,116

-14,030

-30,896

-413

-20,212

-126,206

Net fee and commission income

719

-4,898

830

-258

-

-514

-4,121

Dividend income

-

-

-

28,287

-

-

28,287

Results from equity investments

-

-

-

-3,308

-

-

-3,308

Results from financial transactions

-5,187

-9,445

-1,798

5,085

-

-10,894

-22,239

Remuneration for services rendered

6,268

6,435

2,638

8,584

5,096

73

29,094

Gains and losses due to recognition

84

12,579

2,317

-

-

-

14,980

Other operating income

-

-

-

-

-

589

589

Total underlying income

94,093

97,408

53,073

11,629

5,287

-8,319

253,171

        

Operating expenses

-26,687

-22,626

-18,895

-24,574

-7,989

-5,984

-106,755

Total operating expenses

-26,687

-22,626

-18,895

-24,574

-7,989

-5,984

-106,755

        

Impairments on loans and guarantees

-3,645

-1,387

-16,790

-979

-27

-170

-22,998

Total impairments

-3,645

-1,387

-16,790

-979

-27

-170

-22,998

        

Profit before results from associates and taxation

63,761

73,395

17,388

-13,924

-2,729

-14,473

123,418

Share in results from associates

-

-

-

-1,696

-

-

-1,696

Taxation

-11,642

-13,401

-3,175

11,145

498

2,643

-13,932

Underlying net profit

52,119

59,994

14,213

-4,475

-2,231

-11,830

107,790

        

Currency effect equity investments

-

-

-

43,343

-

-

43,343

Net profit under IFRS

52,119

59,994

14,213

38,868

-2,231

-11,830

151,133

Segment assets December 31, 2019

Financial Institutions

Energy

Agribusiness, Food & Water

Private Equity

Partnership for impact

Other

Total

        

Loans to the private sector

2,177,296

1,785,504

951,245

38,383

19,495

58,699

5,030,622

Equity investments and investments in associates

-

-

-

2,165,432

-

-

2,165,432

Other assets

670,472

549,824

292,924

678,639

6,003

18,077

2,215,939

Total assets

2,847,768

2,335,328

1,244,169

2,882,454

25,498

76,776

9,411,993

Contingent liabilities – Effective guarantees issued

50,545

47,825

-

-

-

-

98,370

Assets under management (loans and equity investments) managed for the risk of the state

164,548

229,816

143,551

429,057

-

5,363

972,335

Segment assets December 31, 2018

Financial Institutions

Energy

Agribusiness, Food & Water

Private Equity

Partnership for impact

Other

Total

        

Loans to the private sector

2,017,816

1,750,085

885,171

46,993

18,992

51,764

4,770,821

Equity investments and investments in associates

-

-

-

1,797,519

-

-

1,797,519

Other assets

590,375

512,042

258,985

539,670

5,557

15,145

1,921,774

Total assets

2,608,191

2,262,127

1,144,156

2,384,182

24,549

66,909

8,490,114

Contingent liabilities – Effective guarantees issued

72,327

-

993

-

-

1,746

75,066

Assets under management (loans and equity investments) managed for the risk of the state

169,445

224,586

116,836

379,183

-

19

890,069