8. Business segments
Accounting policies
For management purposes, the LOTOS Group is divided into business units which correspond to the business segments, whereas for financial reporting
purposes the Group’s operating activity comprises two main reportable operating segments:
- Exploration & Production segment – comprising activities related to the acquisition of crude oil and natural gas reserves, and crude oil and natural gas production,
- Refining & Marketing segment – comprising the production and processing of refined petroleum products and their wholesale and retail sale, as well as auxiliary, transport and service activities.
The reportable operating segments are identified at the Group level. The Parent is included in the Refining & Marketing segment.
Segment performance is assessed on the basis of revenue, EBIT and EBITDA.
EBIT is operating profit/(loss)
and EBITDA is operating profit/(loss) before depreciation and amortisation.
The results, assets and liabilities of individual segments are measured using the same accounting policies as those applied in the preparation of these consolidated financial statements. Segments’ revenue and results were determined before intersegment consolidation adjustments.
| Exploration & Production | Refining & Marketing | Consolidation adjustments | Consolidated | |||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Revenue:: | 1,858.9 | 1,111.5 | 31,850.5 | 20,319.5 | (585.8) | (522.4) | 33,123.6 | 20,908.6 |
| Intersegment sales | 533.0 | 464.1 | 52.8 | 58.3 | (585.8) | (522.4) | – | – |
| External sales | 1.325,9 | 647,4 | 31.797,7 | 20.261,2 | – | – | 33,123.6 | 20,908.6 |
| Operating profit/(loss) (EBIT) | 1,210.7 | (764.2) | 3,278.0 | (615.1) | (10.8) | (17.5) | 4,477.9 | (1,396.8) |
| of which (impairment losses)/reversal of impairment losses on property, plant and equipment and intangible assets | 254.6 | (895.2) | (129.7) | (9.6) | – | – | 124.9 | (904.8) |
| Finance income | 261.9 | 125.8 | ||||||
| Finance cost | (288.7) | (370.5) | ||||||
| (Impairment losses)/reversal of impairment losses on financial instruments | 0.8 | (9.4) | ||||||
| Share in net profit/(loss) of equity- accounted joint ventures | 4.6 | (1.9) | ||||||
| Profit/(loss) before tax | 4,456.5 | (1,652.8) | ||||||
| Depreciation and amortisation | 264.9 | 322.0 | 784.1 | 767.9 | – | – | 1,049.0 | 1,089.9 |
| Operating profit/(loss) before depreciation and amortisation (EBITDA) | 1,475.6 | (442.2) | 4,062.1 | 152.8 | (10.8) | (17.5) | 5,526.9 | (306.9) |
| Exploration & Production | Refining & Marketing | Consolidation adjustments | Consolidated | |||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Total assets as at the reporting date | 5,763.3 | 4,307.7 | 22,641.6 | 20,013.2 | (2,440.1) | (2,464.5) | 25,964.8 | 21,856.4 |
| Increase in non-current assets (1) | 710.1 | 384.8 | 819.6 | 631.5 | – | – | 1,529.7 | 1,016.3 |
| Geographical breakdown of non-current assets (2) | Dec 31 2021 | Dec 31 2020 |
|---|---|---|
| Poland | 11,542.7 | 11,493.8 |
| Norway | 1,900.9 | 1,320.9 |
| Lithuania | 50.6 | 50.1 |
| Total | 13,494.2 | 12,864.8 |