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 |