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Note 10 - Segment Reporting
 6 Months Ended
Jun. 30, 2021
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 10 – SEGMENT REPORTING

 

The Company operates in three main segments: Water, Ceramics and Plastics. With effect from January 1, 2020, the group structure was changed as shared group activities were transferred to an individual reporting unit separated from the business units. Costs and assets for these activities were therefore separated during 2020.

 

Segment information for the business areas is as follows:

 

   

For the Three Months Ended

    

For the Six Months Ended

  
   

June 30,

    

June 30,

  
   

2021

    

2020

    

2021

    

2020

  

Revenue

                                

Water

   $ 1,152,422     $ 2,395,458     $ 2,309,758     $ 10,307,261  

Ceramics

     2,102,693       1,614,135       4,033,757       4,063,731  

Plastics

     1,064,219       911,751       1,966,388       1,716,914  

Segment elimination

     (302,771

)

     (279,861

)

     (295,463

)

     (1,164,579

)

Total consolidated Revenue

     4,016,563       4,641,483       8,014,440       14,923,327  

 

For the three-month periods ended June 30, 2021 consolidated revenue declined by $624,920, corresponding to 13%, compared to the same period in 2020. Revenue from the Water segment declined by $1,243,036 as a result of the negative impact of the ongoing COVID-19 pandemic, which has caused a substantial decline in the demand and delivery of water treatment systems for the marine scrubber industry. Revenue from the Ceramics segment increased by $488,558 as a result of increased demand for our Diesel particulate filters and membranes used in various environmental solutions for the reduction of global CO2 emissions. Revenue in the Plastics segment increased by $152,468 due to the increase in sales activities which has brought in an increased number of new customers.

 

The consolidated revenue for the six months ended June 30, 2021 declined by $6,908,887 compared to the same period in 2020. The decline was primarily attributable to the Water segment, where revenue declined by $7,997,503. For Ceramics and Plastics, the revenue increased slightly for the six months ended June 30, 2021 compared to the same period in 2020, while revenue from Other increased significantly as this is mainly intercompany invoicing of management fees to the other segments as part of the new group structure that was implemented in 2020. For 2020 the related management fee was invoiced in the last quarter of 2020 and comparison is therefore not possible for Other revenue.

 

   

For the Three Months Ended

    

For the Six Months Ended

  
   

June 30,

    

June 30,

  
   

2021

    

2020

    

2021

    

2020

  

Income (Loss)

                                

Water

   $ (944,122

)

   $ (506,209

)

   $ (1,580,562

)

   $ 110,758  

Ceramics

     (1,457,862

)

     (874,606

)

     (1,882,398

)

     (975,701

)

Plastics

     (275,324

)

     (35,809

)

     (528,303

)

     (67,656

)

Other

     (420,800

)

     (1,147,187

)

     (1,566,274

)

     (1,327,713

)

Total consolidated Loss

     (3,098,108

)

     (2,563,811

)

     (5,557,537

)

     (2,260,312

)

 

Loss for the three-month periods ended June 30, 2021 was $(3,098,108) compared to $(2,563,811) for the corresponding period in 2020. The greater loss in the current year is mainly related to the Water segment due to the significant decline in revenue as noted above. Further, Water, Ceramics and Plastics have each been charged with intercompany management fees in the three-month period ended June 30, 2021 while the related management fee was invoiced in the last quarter of 2020 covering the full year. The loss for the three-month period ended June 30, 2021 is therefore not fully comparable with the corresponding loss for the three-month period ended June 30, 2020.

 

Income (Loss) for the six-month period ended June 30, 2021 was $(5,557,537) compared to $(2,260,312) for the corresponding period in 2020. The greater loss in the current year is mainly related to the Water segment due to the significant decline in revenue as noted above. Further, Water, Ceramics and Plastics have each been charged with intercompany management fees in the six-month period ended June 30, 2021 while the related management fee was invoiced in the last quarter of 2020 covering the full year. The loss for the six-month period ended June 30, 2021 is therefore not fully comparable with the corresponding loss for the six month periods ended June 30, 2020.

 

   

For the period ended

  

Total assets

 

June 30, 2021

    

December 31, 2020

  

Water

   $ 12,166,764     $ 14,033,107  

Ceramics

     15,747,698       16,734,371  

Plastics

     2,352,040       2,022,381  

Other

     21,137,930       9,420,278  

Total consolidated assets

   $ 51,404,432     $ 42,210,137  

 

Total segment assets have increased from $42,210,137 at June 30, 2020 to $51,404,432 at June 30, 2021. The increase is especially related to the increased cash and cash equivalents as a result of proceeds from the issuance of the Convertible Note in April 2021. Segment assets in Water have decreased especially due to a decline in account receivables and contract assets as a result of the significant decline in activity.