2.2 Financial results of reporting segments
in PLN millions, unless otherwise stated
| from 1 January 2021 to 31 December 2021 | |||||||
|---|---|---|---|---|---|---|---|
| KGHM Polska Miedź S.A. | KGHM INTERNATIONAL LTD. | Sierra Gorda S.C.M.* |
Other segments |
Reconciliation items to consolidated data |
Consolidated financial statements |
||
| Elimination of data of the segment Sierra Gorda S.C.M |
Consolidation adjustments**** |
||||||
| Note 2.3 Revenues from contracts with customers, of which: | 24 618 | 3 125 | 4 585 | 10 329 | (4 585) | (8 269) | 29 803 |
| – inter-segment | 408 | – | – | 7 861 | – | (8 269) | – |
| – external | 24 210 | 3 125 | 4 585 | 2 468 | (4 585) | – | 29 803 |
| Segment result – profit/(loss) for the period | 5 169 | 2 632 | 3 178 | (140) | (3 178) | (1 506) | 6 155 |
|
Additional information on significant revenue/cost items of the segment |
|||||||
| Depreciation/amortisation recognised in profit or loss | (1 363) | (516) | (777) | (258) | 777 | 14 | (2 123) |
| (Recognition)/reversal of impairment losses on non-current assets, including: | 1 742 | 2 200 | 2 639 | (216) | (2 639) | (1 680) | 2 046 |
| (recognition)/reversal of impairment losses on investments in subsidiaries | 1 010 | – | – | (86) | – | (924) | – |
| (recognition)/reversal of allowances for impairment of loans granted | 752 | 2 380 | – | – | – | (752) | 2 380 |
| As at 31 December 2021 | |||||||
| Assets, including: | 43 458 | 13 646 | 12 232 | 6 066 | (12 232) | (15 143) | 48 027 |
| Segment assets | 43 458 | 13 646 | 12 232 | 6 066 | (12 232) | (15 172) | 47 998 |
| Assets unallocated to segments | – | – | – | – | – | 29 | 29 |
| Liabilities, including: | 17 618 | 18 185 | 12 844 | 3 339 | (12 844) | (18 253) | 20 889 |
| Segment liabilities | 17 618 | 18 185 | 12 844 | 3 339 | (12 844) | (18 299) | 20 843 |
| Liabilities unallocated to segments | – | – | – | – | – | 46 | 46 |
| Other information |
from 1 January 2021 to 31 December 2021 |
||||||
| Cash expenditures on property, plant and equipment and intangible assets – cash flows | 2 407 | 1 014 | 605 | 490 | (605) | (21) | 3 890 |
| Production and cost data | from 1 January 2021 to 31 December 2021 | ||||||
| Payable copper (kt) | 577,6 | 71,7 | 104,4 | ||||
| Molybdenum (million pounds) | – | 0,2 | 8,2 | ||||
| Silver (t) | 1 332,2 | 2,0 | 31,9 | ||||
| TPM (koz t) | 81,3 | 51,3 | 30,9 | ||||
| (C1) cash cost of producing payable copper (USD/lb PLN/lb)** | 2,26 8,73 | 2,01 7,78 | 0,78 3,01 | ||||
| Segment result – adjusted EBITDA | 5 474 | 1 340 | 3 167 | 346 | – | – | 10 327 |
| EBITDA margin*** | 22% | 43% | 6% | 3% | – | – |
30% |
* 55% of the Group’s share in Sierra Gorda S.C.M.’s financial and production data.
** Unit cash cost of payable copper production, reflecting ore mining and processing costs, transport costs, the minerals extraction tax, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less by-product value. C1 cost is in regard to payable copper in own concentrate in the case of the segment KGHM Polska Miedź S.A. and payable copper in end products of individual mines of the segment KGHM International Ltd. and the segment Sierra Gorda S.C.M. C1 cost in PLN/lb was calculated using the average exchange rate by the NBP (arithmetical average of daily quotations per the NBP’s tables).
*** Adjusted EBITDA to revenues from sales. For the purposes of calculating the Group’s EBITDA margin (30%), the consolidated revenues from contracts with customers were increased by revenues from contracts with customers of the segment Sierra Gorda S.C.M. [10 327 / (29 803 + 4 585) * 100]
**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.
** Unit cash cost of payable copper production, reflecting ore mining and processing costs, transport costs, the minerals extraction tax, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less by-product value. C1 cost is in regard to payable copper in own concentrate in the case of the segment KGHM Polska Miedź S.A. and payable copper in end products of individual mines of the segment KGHM International Ltd. and the segment Sierra Gorda S.C.M. C1 cost in PLN/lb was calculated using the average exchange rate by the NBP (arithmetical average of daily quotations per the NBP’s tables).
*** Adjusted EBITDA to revenues from sales. For the purposes of calculating the Group’s EBITDA margin (30%), the consolidated revenues from contracts with customers were increased by revenues from contracts with customers of the segment Sierra Gorda S.C.M. [10 327 / (29 803 + 4 585) * 100]
**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.
Financial results of reporting segments for the comparable period
| from 1 January 2020 to 31 December 2020 | |||||||
| KGHM Polska Miedź S.A. | KGHM INTERNATIONAL LTD. | Sierra Gorda S.C.M.* |
Other segments |
Reconciliation items to consolidated data |
Consolidated financial statements |
||
| Elimination of data of the segment Sierra Gorda S.C.M |
Consolidation adjustments**** |
||||||
| Note 2.3 Revenues from contracts with customers, of which: | 19 326 | 2 703 | 2 599 | 7 881 | (2 599) | (6 278) | 23 632 |
| – inter-segment | 313 | 20 | – | 5 955 | – | (6 288) | – |
| – external | 19 013 | 2 683 | 2 599 | 1 926 | (2 599) | 10 | 23 632 |
| Segment result – profit/(loss) for the period | 1 779 | (691) | (125) | (37) | 125 | 746 | 1 797 |
|
Additional information on significant revenue/cost items of the segment |
|||||||
| Depreciation/amortisation recognised in profit or loss | (1 293) | (456) | (804) | (241) | 804 | 27 | (1 963) |
| (Recognition)/reversal of impairment losses on non-current assets, including: | (192) | 66 | – | (162) | – | 125 | (163) |
| (recognition)/reversal of impairment losses on investments in subsidiaries | (141) | – | – | – | – | 141 | – |
| (recognition)/reversal of allowances for impairment of loans granted | (18) | 74 | – | – | – | 18 | 74 |
| Share of losses of joint ventures accounted for using the equity method | – | (204) | – | – | – | – | (204) |
| As at 31 December 2020 | |||||||
| Assets, including: | 39 342 | 10 811 | 9 701 | 5 636 | (9 701) | (13 009) | 42 780 |
|
Segment assets |
39 342 | 10 811 | 9 701 | 5 636 | (9 701) | (13 017) | 42 772 |
| Joint ventures accounted for using the equity method | – | – | – | – | – | – | – |
| Assets unallocated to segments | – | – | – | – | – | 8 | 8 |
| Liabilities, including: | 18 616 | 17 569 | 13 232 | 2 778 | (13 232) | (17 264) | 21 699 |
| Segment liabilities | 18 616 | 17 569 | 13 232 | 2 778 | (13 232) | (17 290) | 21 673 |
| Liabilities unallocated to segments | – | – | – | – | – | 26 | 26 |
| Other information | from 1 January 2020 to 31 December 2020 | ||||||
| Cash expenditures on property, plant and equipment and intangible assets – cash flows | 2 432 | 597 | 544 | 351 | (544) | 78 | 3 458 |
| Production and cost data | from 1 January 2020 to 31 December 2020 | ||||||
| Payable copper (kt) | 560.4 | 66.9 | 81.8 | ||||
| Molybdenum (million pounds) | – | 0.4 | 9 | ||||
| Silver (t) |
1 322.9 |
1.8 | 27.6 | ||||
| TPM (koz t) | 96.8 | 66.0 | 31.4 | ||||
| (C1) cash cost of producing payable copper (USD/lb PLN/lb)** | 1.62 6.30 | 1.91 7.43 |
1.19 4.66 | ||||
| Segment result – adjusted EBITDA | 4 458 | 608 | 1 346 | 211 | – | – | 6 623 |
| EBITDA margin*** | 23% | 22% | 52% | 3% | – | – | 25% |
* 55% of the Group’s share in Sierra Gorda S.C.M.’s financial and production data.
** Unit cash cost of payable copper production, reflecting ore mining and processing costs, transport costs, the minerals extraction tax, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less by-product value. C1 cost is in regard to payable copper in own concentrate in the case of the segment KGHM Polska Miedź S.A. and payable copper in end products of individual mines of the segment KGHM International Ltd. and the segment Sierra Gorda S.C.M. C1 cost in PLN/lb was calculated using the average exchange rate by the NBP (arithmetical average of daily quotations per the NBP’s tables).
*** Adjusted EBITDA to revenues from sales. For the purposes of calculating the Group’s EBITDA margin (25%), the consolidated revenues from contracts with customers were increased by revenues from contracts with customers of the segment Sierra Gorda S.C.M. [6 623 / (23 632 + 2 599) * 100]
**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.
** Unit cash cost of payable copper production, reflecting ore mining and processing costs, transport costs, the minerals extraction tax, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less by-product value. C1 cost is in regard to payable copper in own concentrate in the case of the segment KGHM Polska Miedź S.A. and payable copper in end products of individual mines of the segment KGHM International Ltd. and the segment Sierra Gorda S.C.M. C1 cost in PLN/lb was calculated using the average exchange rate by the NBP (arithmetical average of daily quotations per the NBP’s tables).
*** Adjusted EBITDA to revenues from sales. For the purposes of calculating the Group’s EBITDA margin (25%), the consolidated revenues from contracts with customers were increased by revenues from contracts with customers of the segment Sierra Gorda S.C.M. [6 623 / (23 632 + 2 599) * 100]
**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.
Financial results of reporting segments for the comparable period
| from 1 January 2020 to 31 December 2020 | |||||||
| KGHM Polska Miedź S.A. | KGHM INTERNATIONAL LTD. | Sierra Gorda S.C.M.* |
Other segments |
Reconciliation items to consolidated data |
Consolidated financial statements |
||
| Elimination of data of the segment Sierra Gorda S.C.M |
Consolidation adjustments**** |
||||||
| Note 2.3 Revenues from contracts with customers, of which: | 19 326 | 2 703 | 2 599 | 7 881 | (2 599) | (6 278) | 23 632 |
| – inter-segment | 313 | 20 | – | 5 955 | – | (6 288) | – |
| – external | 19 013 | 2 683 | 2 599 | 1 926 | (2 599) | 10 | 23 632 |
| Segment result – profit/(loss) for the period | 1 779 | (691) | (125) | (37) | 125 | 746 | 1 797 |
|
Additional information on significant revenue/cost items of the segment |
|||||||
| Depreciation/amortisation recognised in profit or loss | (1 293) | (456) | (804) | (241) | 804 | 27 | (1 963) |
| (Recognition)/reversal of impairment losses on non-current assets, including: | (192) | 66 | – | (162) | – | 125 | (163) |
| (recognition)/reversal of impairment losses on investments in subsidiaries | (141) | – | – | – | – | 141 | – |
| (recognition)/reversal of allowances for impairment of loans granted | (18) | 74 | – | – | – | 18 | 74 |
| Share of losses of joint ventures accounted for using the equity method | – | (204) | – | – | – | – | (204) |
| As at 31 December 2020 | |||||||
| Assets, including: | 39 342 | 10 811 | 9 701 | 5 636 | (9 701) | (13 009) | 42 780 |
|
Segment assets |
39 342 | 10 811 | 9 701 | 5 636 | (9 701) | (13 017) | 42 772 |
| Joint ventures accounted for using the equity method | – | – | – | – | – | – | – |
| Assets unallocated to segments | – | – | – | – | – | 8 | 8 |
| Liabilities, including: | 18 616 | 17 569 | 13 232 | 2 778 | (13 232) | (17 264) | 21 699 |
| Segment liabilities | 18 616 | 17 569 | 13 232 | 2 778 | (13 232) | (17 290) | 21 673 |
| Liabilities unallocated to segments | – | – | – | – | – | 26 | 26 |
| Other information | from 1 January 2020 to 31 December 2020 | ||||||
| Cash expenditures on property, plant and equipment and intangible assets – cash flows | 2 432 | 597 | 544 | 351 | (544) | 78 | 3 458 |
| Production and cost data | from 1 January 2020 to 31 December 2020 | ||||||
| Payable copper (kt) | 560.4 | 66.9 | 81.8 | ||||
| Molybdenum (million pounds) | – | 0.4 | 9 | ||||
| Silver (t) |
1 322.9 |
1.8 | 27.6 | ||||
| TPM (koz t) | 96.8 | 66.0 | 31.4 | ||||
| (C1) cash cost of producing payable copper (USD/lb PLN/lb)** | 1.62 6.30 | 1.91 7.43 |
1.19 4.66 | ||||
| Segment result – adjusted EBITDA | 4 458 | 608 | 1 346 | 211 | – | – | 6 623 |
| EBITDA margin*** | 23% | 22% | 52% | 3% | – | – | 25% |
* 55% of the Group’s share in Sierra Gorda S.C.M.’s financial and production data.
** Unit cash cost of payable copper production, reflecting ore mining and processing costs, transport costs, the minerals extraction tax, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less by-product value. C1 cost is in regard to payable copper in own concentrate in the case of the segment KGHM Polska Miedź S.A. and payable copper in end products of individual mines of the segment KGHM International Ltd. and the segment Sierra Gorda S.C.M. C1 cost in PLN/lb was calculated using the average exchange rate by the NBP (arithmetical average of daily quotations per the NBP’s tables).
*** Adjusted EBITDA to revenues from sales. For the purposes of calculating the Group’s EBITDA margin (25%), the consolidated revenues from contracts with customers were increased by revenues from contracts with customers of the segment Sierra Gorda S.C.M. [6 623 / (23 632 + 2 599) * 100]
**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.
** Unit cash cost of payable copper production, reflecting ore mining and processing costs, transport costs, the minerals extraction tax, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less by-product value. C1 cost is in regard to payable copper in own concentrate in the case of the segment KGHM Polska Miedź S.A. and payable copper in end products of individual mines of the segment KGHM International Ltd. and the segment Sierra Gorda S.C.M. C1 cost in PLN/lb was calculated using the average exchange rate by the NBP (arithmetical average of daily quotations per the NBP’s tables).
*** Adjusted EBITDA to revenues from sales. For the purposes of calculating the Group’s EBITDA margin (25%), the consolidated revenues from contracts with customers were increased by revenues from contracts with customers of the segment Sierra Gorda S.C.M. [6 623 / (23 632 + 2 599) * 100]
**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.
Reconciliation of adjusted EBITDA
| from 1 January 2021 to 31 December 2021 | |||||||
|---|---|---|---|---|---|---|---|
| KGHM Polska Miedź S.A. | KGHM INTERNATIONAL LTD. | Other segments |
Consolidation adjustments* |
Consolidated financial statements |
Sierra Gorda S.C.M. ** | Adjusted EBITDA (segments, total) |
|
| 1 | 2 | 3 | 4 |
5 (1+2+3+4) |
6 |
7 (5+6-4) |
|
| Profit/(Loss) for the period | 5 169 | 2 632 | (140) | (1 506) | 6 155 | 3 178 | |
| [-] Profit or loss on involvement in joint ventures | – | 2 874 | – | – | 2 874 | – | |
| [-] Current and deferred income tax | (1 547) | 1 | (63) | (60) | (1 669) | (1 059) | |
| [-] Depreciation/amortisation recognised in profit or loss |
(1 363) | (516) | (258) | 14 | (2 123) | (777) | |
| [-] Finance income and (costs) | (476) | (974) | (19) | 998 | (471) | (787) | |
| [-] Other operating income and (costs) | 3 088 | 69 | (19) | (2 427) | 711 | (5) | |
| [-]
Recognition)/reversal of impairment losses on non-current assets recognised in cost of sales, selling costs and administrative expenses |
(7) | (162) | (127) | (3) | (299) | 2 639 | |
| Segment result – adjusted EBITDA | 5 474 | 1 340 | 346 | (28) | 7 132 | 3 167 | 10 327 |
* Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.
** 55% share of the Group in the financial data of Sierra Gorda S.C.M.
** 55% share of the Group in the financial data of Sierra Gorda S.C.M.
| from 1 January 2020 to 31 December 2020 | |||||||
|---|---|---|---|---|---|---|---|
| KGHM Polska Miedź S.A. | KGHM INTERNATIONAL LTD. | Other segments |
Consolidation adjustments* |
Consolidated financial statements |
Sierra Gorda S.C.M. ** | Adjusted EBITDA (segments, total) |
|
| 1 | 2 | 3 | 4 |
5 (1+2+3+4) |
6 |
7 (5+6-4) |
|
| Profit/(Loss) for the period | 1 779 | (691) | (37) | 746 | 1 797 | (125) | |
| [-] Profit or loss on involvement in joint ventures | – | 247 | – | – | 247 | – | |
| [-] Current and deferred income tax | (988) | (1) | (21) | 51 | (959) | 207 | |
| [-] Depreciation/amortisation recognised in profit or loss |
(1 293) | (456) | (241) | 27 | (1 963) | (804) | |
| [-] Finance income and (costs) | – | (1 027) | (20) | 1 019 | (28) | (843) | |
| [-] Other operating income and (costs) | (398) | (54) | 100 | (272) | (624) | (31) | |
| [-](Recognition)/reversal of impairment losses on non-current assets recognised in cost of sales, selling costs and administrative expenses | – | (8) | (66) | (89) | (163) | – | |
| Segment result – adjusted EBITDA | 4 458 | 608 | 211 | 10 | 5 287 | 1 346 | 6 623 |
* Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.
**55% share of the Group in the financial data of Sierra Gorda S.C.M.
**55% share of the Group in the financial data of Sierra Gorda S.C.M.
A detailed description of the results of individual segments is presented in the following sections of the Management Board’s report on the activities of KGHM Polska Miedź S.A. and of the KGHM Polska Miedź S.A. Group in 2021:
- the segment KGHM Polska Miedź S.A. – in section 7,
- the segment KGHM INTERNATIONAL LTD. – in section 8,
- the segment Sierra Gorda S.C.M. – in section 9.