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Integrated Report of KGHM Polska Miedź S.A.
and the KGHM Polska Miedź S.A. Group
for 2020

2.2 Financial results of reporting segments

in PLN millions, unless otherwise stated

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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 9,0
Silver (t) 1 322,9 1,8 27,6
TPM (koz t) 96,8 66,1 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 sales were increased by revenues from sales 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

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from 1 January 2019 to 31 December 2019
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: 17 683 3 084 2 002 7 448 (2 002) (5 492) 22 723
– inter-segment 315 19 – 5 147 – (5 481) –
– external 17 368 3 065 2 002 2 301 (2 002) (11) 22 723
Segment result – profit/(loss) for the period 1 264 (555) (556) (275) 556 987 1 421

Additional information on significant revenue/cost items of the segment
(Recognition)/reversal of impairment losses on non-current assets, including: (1 220) ( 409) ( 522) ( 242) 522 ( 49) (1 920)

(recognition)/reversal of impairment losses on investments in subsidiaries

 ( 357) 169 – ( 202) – 339 ( 51)
(recognition)/reversal of allowances for impairment of loans granted ( 460) – – – – 460 –
reversal of allowances for impairment of loans granted 113 – – – – ( 113) –
Share of losses of joint ventures accounted for using the equity method – ( 433) – – – ( 5) ( 438)
As at 31 December 2019
Assets, including: 35 990 10 689 9 156 5 386 (9 156) (12 656) 39 409
Segment assets 35 990 10 689 9 156 5 386 (9 156) (12 665) 39 400
Joint ventures accounted for using the equity method – – – – – 4 4
Assets unallocated to segments – – – – – 5 5
Liabilities, including: 16 100 16 849 12 801 2 552 (12 801) (16 294) 19 207
Segment liabilities 16 100 16 849 12 801 2 552 (12 801) (16 314) 19 187
Liabilities unallocated to segments – – – – – 20 20
Other information from 1 January 2019 to 31 December 2019
Cash expenditures on property, plant and equipment and intangible assets – cash flows 2 366 654 629 289 ( 629) ( 77) 3 232
Production and cost data from 1 January 2019 to 31 December 2019
Payable copper (kt) 565,6 76,5 59,5
Molybdenum (million pounds) – 0,8 11,2
Silver (t) 1 400,2 2,4 14,6
TPM (koz t) 103,7 85,2 31,2
(C1) cash cost of producing payable copper (USD/lb PLN/lb)** 1,74 6,69 1,74 6,69 1,41 5,42
Segment result – adjusted EBITDA 3 619 709 660 241 – – 5 229
EBITDA margin*** 20% 23% 33% 3% – – 21%
* 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 (21%), the consolidated revenues from sales were increased by revenues from sales of the segment Sierra Gorda S.C.M.[5 229 / (22 723 + 2 002) * 100].
**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.

Reconciliation of adjusted EBITDA

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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.

 

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from 1 January 2019 to 31 December 2019
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 1 264 (555) (275) 987 1 421 (556)
[-] Profit or loss on involvement in joint ventures – 14 – (5) 9 –
[-] Current and deferred income tax (663) (102) 10 54 (701) 156
[-] Depreciation/amortisation recognised
in profit or loss		 (1 220) (409) (242) (49) (1 920) (522)
[-] Finance income and (costs) (504) (961) (18) 955 (528) (841)
[-] Other operating income and (costs) 39 175 (64) 36 186 (9)
[-]

(Recognition)/reversal of impairment losses on non-current assets recognised in cost of sales, selling costs and administrative expenses

 (7) 19 (202) ( 8) (198) –
Segment result – adjusted EBITDA 3 619 709 241 4 4 573 660 5 229
* 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.

 

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 2020:

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2.1 Operating segments
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2.3 Revenues from contracts with customers of the Group – breakdown by products

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