Strategic Report Strategic Report Strategic Report Financial Additional Overview Strategy Performance Governance Statements Information 5. Discontinued Operations In 2017 the Group classified Georgia Healthcare Group (“GHG”) as disposal group held for sale and its results of operations are reported under “discontinued operations” as a single amount in the consolidated income statement. Given the high probability of Investment Business distribution to its shareholders as at 31 March 2018 the Group classified the Investment Business as disposal group held for distribution and its results of operations were reported under “discontinued operations” as a single amount in the consolidated income statement. As a result, discontinued operations were further adjusted to reflect the whole Investment Business classification as disposal group held for distribution. On 29 May 2018 the Demerger became effective and the Investment Business was distributed to the shareholders of the Group. For details refer to Note 1 and Note 20. Below are presented income statement line items of the Group excluding intra-group elimination attributable to discontinued operations: Year ended Year ended Period ended 31 December 31 December 29 May 2018 2017 2016 Net insurance premiums earned 42,954 102,329 100,146 Net insurance claims incurred (24,945) (60,251) (63,402) Gross insurance profit 18,009 42,078 36,744 Healthcare and pharma revenue 326,655 691,971 362,586 Cost of healthcare and pharma services (225,159) (478,182) (227,329) Gross healthcare and pharma profit 101,496 213,789 135,257 Real estate revenue 47,787 121,862 101,480 Cost of real estate (38,708) (85,765) (81,098) Gross real estate profit 9,079 36,097 20,382 Utility and energy revenue 53,999 127,568 56,486 Cost of utility and energy (15,635) (39,198) (17,806) Gross utility and energy profit 38,364 88,370 38,680 Gross other profit 15,678 50,959 21,866 Revenue 182,626 431,293 252,929 Salaries and other employee benefits (54,711) (109,977) (56,028) Administrative expenses (38,109) (88,471) (45,645) Other operating expenses (3,828) (12,839) (2,826) Operating expenses (96,648) (211,287) (104,499) EBITDA 85,978 220,006 148,430 Profit from associates – 376 4,328 Net gains from disposal of Investment Businesses 90,653 – – Depreciation and amortisation (15,192) (54,030) (29,639) Net foreign currency gain (loss) 12,421 (10,844) (9,944) Interest income 8,854 15,032 5,985 Interest expense (34,624) (57,486) (28,985) Net operating income before non-recurring items and impairment 148,090 113,054 90,175 Impairment charge on insurance premiums receivable, accounts receivable, other assets and provisions (5,078) (7,590) (3,335) Net non-recurring items (31,690) (5,402) 33,829 Profit before income tax expense 111,322 100,062 120,669 Income tax (expense) benefit (1,186) (6,135) 12,212 Profit for the year 110,136 93,927 132,881 Annual Report 2018Bank of Georgia Group PLC 211