6. Segment information
Back to the listThe Group has two reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products, and are managed separately because they require different technology and marketing strategies. The following summary describes the operations in each of the Group’s reportable segments:
- Phosphate-based products segment includes mainly production and distribution of ammophos, diammoniumphosphate and other phosphate based and complex (NPK) fertilisers on the factories located in Cherepovets, Balakovo and Volkhov, and production and distribution of apatite concentrate extracted from the apatitenepheline ore, which is mined and processed in Kirovsk;
- Nitrogen-based products segment includes mainly production and distribution of ammonia, ammonium nitrate and urea on the factory located in Cherepovets.
Certain assets, revenue and expenses are not allocated to any particular segment and are, therefore, included in the “other operations” line. None of these operations meet any of the quantitative thresholds for determining reportable segments. Information regarding the results of each reportable segment is included below. Performance is measured based on gross profit, as included in internal management reports that are reviewed by the Group’s CEO.
Business segment information of the Group as at 31 December 2012 and for the year ended is as follows:
| RUB million | Phosphate-based products | Nitrogen-based products | Other operations | Inter-segment elimination | Total |
|---|---|---|---|---|---|
| Segment revenue and profitability | |||||
| Segment external revenues, | 91,233 | 13,048 | 1,022 | — | 105,303 |
| thereof: | |||||
| Export | 60,759 | 11,404 | — | — | 72,163 |
| Domestic | 30,474 | 1,644 | 1,022 | — | 33,140 |
| Inter-segment revenues | — | 3,175 | — | (3,175) | — |
| Cost of goods sold | (55,276) | (7,632) | (1,687) | 3,175 | (61,420) |
| Gross segment profit/(loss) | 35,957 | 8,591 | (665) | — | 43,883 |
| Certain items of profit and loss | |||||
| Amortisation and depreciation | (5,089) | (688) | (135) | — | (5,912) |
| Total non-current segment assets | 45,200 | 13,309 | 2,657 | — | 61,166 |
| Additions to non-current assets | 9,855 | 3,700 | 64 | — | 13,619 |
Business segment information of the Group as at 31 December 2011 and for the year ended is as follows:
| RUB million | Phosphate-based products | Nitrogen-based products | Other operations | Inter-segment elimination | Total |
|---|---|---|---|---|---|
| Segment revenue and profitability | |||||
| Segment external revenues, | 88,982 | 10,727 | 809 | — | 100,518 |
| thereof: | |||||
| Export | 60,837 | 9,426 | — | — | 70,263 |
| Domestic | 28,145 | 1,301 | 809 | — | 30,255 |
| Inter-segment revenues | — | 3,629 | — | (3,629) | — |
| Cost of goods sold | (50,631) | (7,495) | (2,042) | 3,629 | (56,539) |
| Gross segment profit/(loss) | 38,351 | 6,861 | (1,233) | — | 43,979 |
| Certain items of profit and loss | |||||
| Amortisation and depreciation | (4,887) | (413) | (109) | — | (5,409) |
| Total non-current segment assets | 40,310 | 10,296 | 1,948 | — | 52,554 |
| Additions to non-current assets | 8,314 | 6,561 | 368 | — | 15,243 |
The analysis of export revenue by regions is as follows:
| 2012 RUB Million |
2011 RUB Million |
|
|---|---|---|
| North and South America | 24,380 | 28,287 |
| Europe | 16,822 | 16,197 |
| Asia | 9,051 | 6,396 |
| India | 7,454 | 12,029 |
| Africa | 7,579 | 3,016 |
| CIS | 6,877 | 4,338 |
| 72,163 | 70,263 |
The Group distributes its products globally through large independent traders and distributors. The sales volume may vary from one trader to another. In 2012, revenue from sales of phosphate-based products to one single trader amounted to approximately 10% (RUB 10,857 million) of the Group’s total revenue. In 2011, revenue to another single trader amounted to approximately 28% (RUB 27,725 million) of the Group’s total revenue.
| 2012 RUB Million |
2011 RUB Million |
|
|---|---|---|
| Total segment revenues | 105,303 | 100,518 |
| Consolidated revenues | 105,303 | 100,518 |
| 2012 RUB Million |
2011 RUB Million |
|
| Total segmental profit | 43,883 | 43,979 |
| Difference in depreciation and amortisation | (338) | (77) |
| Difference in timing of expenses recognition | 191 | (168) |
| Reallocation of administrative expenses | (145) | (89) |
| Reallocation of selling expenses | (160) | (184) |
| Reallocation of other income | 887 | 297 |
| Reallocation of capitalized expenses | 387 | — |
| Elimination of unrealized profit | (224) | (8) |
| Recognition of finance lease | 794 | 350 |
| Other adjustments | (108) | 222 |
| Consolidated gross profit | 45,167 | 44,322 |
| Total non-current segment assets | 61,166 | 52,554 |
| Difference in the carrying value of the tangible assets | 5,915 | 5,502 |
| Consolidated non-current assets | 67,081 | 57,756 |