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INTEGRATED REPORT 2016

Segment information

The Group evaluates performance and makes investment and strategic decisions based on a review of the profitability of the Group as a whole, and based on operating segments. The company's operating segment has been determined based on reports reviewed by CEO, assessed to be Сompany's chief operating decision maker (“CODM”), that are used to make strategic decisions.

It was determined, that the Group has one operating segment – the extraction, production and sales of potash fertilizers.

The financial information reported on operating segments is based on the management accounts which are based on IFRS. The CODM performs an analysis of the operating results based on the measurements of:

  • revenues;
  • revenues net of freight, railway tariff and transshipment costs;
  • operating profit;
  • tonnes of potash sold, in thousands;
  • cash cost (“CC”) per unit sold (cost of sales adjusted for depreciation and amortisation); and
  • cash capital expenditures net of VAT (“Cash CAPEX”).
  • Business segment assets and liabilities are not reviewed by the CODM and therefore are not disclosed in these consolidated financial statements.

    a) The following is an analysis of the Group's revenue and results from continuing operations for reportable segment:

      Note 2016 2015
    Revenues 21 2,278,249 3,123,302
    Revenues net of freight, railway tariff and transshipment costs 21, 23 1,850,970 2,645,414
    Operating profit   988,570 1,725,241
    Tonnes of potash sold in thousands   10,952 11,205
    CC per unit sold (US dollar per tonne)   35 33
    Cash CAPEX   323,130 342,630

    The measurement of CC per tonne of potash sold reconciles to the IFRS reported figures on a consolidated basis as follows:

      Note 2016 2015
    Cost of sales 22 549,766 568,758
    Adjusted for:      
    Depreciation and amortisation 22 (171,395) (195,268)
    CC   378,371 373,490
    Tonnes of potash sold, in thousands   10,952 11,205
    CC per tonne of potash sold (US dollar per tonne)   35 33

    b) Geographical information

    The analysis of Group sales by region was:

    2016 2015
    Russia 350,800 406,378
    China, India, South East Asia 952,949 1,388,746
    Latin America, USA 632,751 860,819
    Europe, other countries 341,749 467,359
    Total revenue 2,278,249 3,123,302

    The sales are allocated by region based on the destination country.

    c) Major customers

    The Group had no external customers which represented more than 10% of the Group’s revenues in the years ended 31 December 2016 and 2015.

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