Mumbai. Hindustan Zinc Limited today announced its results for the first quarter ended June 30, 2014. Chairman of Hindustan zinc Agnivesh Agarwal says, Zinc prices are looking up as market sentiments are improving and metal balance remains favourable.
Our expansion projects will enhance our market leadership and we are aggressively accelerating our mine development efforts to increase future production.”
Operational Performance
Mined metal production was 163,131 MT in Q1, as compared with 237,825 MT a year ago. The decrease is in-line with our mine plan, which involves lower mined metal production on a year-on-year basis in the first half of the year where we excavate more waste than ore. With higher production planned in second half, the transition to underground mining is progressing well.
Integrated refined metal production of zinc-lead during the quarter was lower by ~20% compared to a year ago, in-line with mined metal production.
The zinc metal cost of production before royalty during the quarter was Rs. 60,093 ($1,005), which is 29% higher in Rupee and 20% higher in USD term from a year ago. The lower production volumes significantly impacted costs, accentuated by rupee depreciation, planned plant shutdowns and higher mine development.
Financial Performance
Revenues were up 1% to Rs. 2,963 crore in Q1 FY 2015 as compared with the corresponding prior period. The increase was driven by higher zinc LME price & premium and rupee depreciation, offset by lower volumes.
EBITDA decreased by 10% to Rs. 1,352 crore in Q1 FY 2015 due to lower production volumes and higher production cost.
Net profit decreased by 3% to Rs. 1,618 crore in Q1 FY 2015. The impact of lower EBITDA was partly offset by strong other income during the quarter.
Expansion Projects
During the quarter, total mine development increased by 15%. Rampura Agucha and Sindesar Khurd shaft projects are progressing well. India’s first paste-fill plant is under commissioning at Rampura Agucha mine. Mine design and planning for further deepening of the pit at Rampura Agucha is under progress to explore extension of mine life.
Liquidity and investment
As on June 30, 2014, the Company had cash and cash equivalents of Rs. 26,272 crore, out of which Rs. 22,172 crore was invested in mutual funds, Rs. 2,049 crore in bonds and Rs 2,000 crore were in fixed deposits with banks. The Company follows a conservative investment policy and invests in high quality debt instruments.
About Hindustan Zinc
Hindustan Zinc (NSE & BSE: HINDZINC) is the one of the largest integrated producers of zinc-lead with a capacity of 1.0 million MT per annum and a leading producer of silver. The Company is headquartered in Udaipur, Rajasthan in India and has zinc-lead mines at Rampura Agucha, Sindesar Khurd, Rajpura Dariba, Zawar and Kayad; primary smelter operations at Chanderiya, Dariba and Debari, all in the state of Rajasthan; and finished product facilities in the state of Uttarakhand.
Hindustan Zinc has a world-class resource base with total reserve & resource of 348.3 million MT and average zinc-lead reserve grade of 12.0%. The Company has a track record of consistently growing its reserve & resource base since 2003 and currently has a mine life of over 25 years.
The Company is self-sufficient in power with an installed base of 474 MW coal-based captive power plants. Additionally, it has green power capacity of 309 MW including 274 MW of wind power and 35 MW of waste heat power. The Company has an operating workforce of over 15,000 including contract workforce.
Hindustan Zinc is a subsidiary of the BSE and NSE listed Sesa Sterlite Limited (ADRs listed on the NYSE), a part of London listed diversified metals and mining major, Vedanta Resources plc.