Hindustan Zinc Delivers Highest ever Record Profits

Hindustan Zinc Delivers Highest ever Record Profits

“Highest ever Production and Profits delivered;

Net profit up 25%; Highest ever dividend

- HZL Q4 PAT up 53% to Rs. 2166 Crore.

- HZL Annual PAT up 25% to Rs. 6899 Crore.

- HZL Q4 PAT up to Rs. 2165.81 Crore from Rs. 1412.84 crore in corresponding Quarter.

- HZL Annual Profit Rs. 6,899.48 crore, up from Rs. 5526.04 crore of last year.

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Hindustan Zinc Delivers Highest ever Record Profits

Highest ever Production and Profits delivered;

Net profit up 25%; Highest ever dividend

– HZL Q4 PAT up 53% to Rs. 2166 Crore.

– HZL Annual PAT up 25% to Rs. 6899 Crore.

– HZL Q4 PAT up to Rs. 2165.81 Crore from Rs. 1412.84 crore in corresponding Quarter.

– HZL Annual Profit Rs. 6,899.48 crore, up from Rs. 5526.04 crore of last year.

– HZL Q4 Income from operations Rs. 3908.65 crore from 3135.00 crore in corresponding Quarter.

– HZL Annual Income from operations Rs. 12,699.84 crore from Rs. 11,405.31 crore in corresponding year.

– HZL Record Silver Production – up by 20% and 36% in Q4 and FY 2013.

– HZL Final Dividend of 75%, taking total dividend for the year to 155%, the highest ever.

– HZL total R&R of 348.3 million tonnes on Gross Addition of 24.6 million MT against depletion of 8.6 Million MT.

– HZL has as on 31 March 2013, cash and cash equivalents of Rs. 21,479 Crore Mumbai: Hindustan Zinc Limited (“HZL” or the “Company”) today announced its unaudited results for the fourth quarter (“Q4”) and Full Year ended 31 March 2013 (“FY 2013”).

Mr. Agnivesh Agarwal (Chairman, Hindustan Zinc) – “Our record performance has set the tone for future. We are now focusing on our next phase of growth, which will reinforce our global leadership and maintain our low-cost positioning.”

Operational Performance

(1) Including Zinc MIC sale of 61kt and 61kt in Q4 and full-year, as compared with nil in corresponding prior periods, respectively.

(2) Including captive consumption of 1,777 tonnes and 6,500 tonnes in Q4 and full-year, as compared with 2,156 tonnes and 6,625 tonnes in corresponding prior periods, respectively.

(3) Including captive consumption of 9,226 Kgs and 33,832 Kgs in Q4 and full-year, as compared with 11,345 Kgs and 34,917 Kgs in corresponding prior periods, respectively.

Mined metal production was 260kt in Q4 and 870kt in FY 2012-13, as compared with 223kt and 830kt in the corresponding prior periods. This was in line with our mine plan.

In line with the mined metal production trend during the year, integrated production of refined Zinc was up 8% sequentially to 181kt in Q4. However, integrated production of refined Zinc was down 4% in Q4 and 12% in FY 2012-13 from a year ago. The y-o-y decline in Zinc metal production was mainly on account of lower MIC production in the first half in comparison to that in second half. The surplus MIC was sold during the quarter.

Integrated production of refined Lead was 32kt in Q4 and 107kt in the full year, up 2% and 20% respectively from corresponding prior periods. Integrated refined Silver production was 100 tonnes in Q4 and 322 tonnes in the full year, up 20% and 36% respectively, driven by higher contribution from SK mine and Dariba Lead smelter.


Financial Performance

Revenues for Q4 FY 2012 were up 24% to Rs. 3850 Crore, compared with the corresponding prior quarter. The increase was driven by higher sales volume including Zinc MIC sales of 61kt and INR depreciation. Net profit for the quarter was up by 53%to Rs. 2,166 Crore driven by higher sales.

Revenues for FY 2013 were Rs. 12,526 Crore, an increase of 11%, compared to last year’s performance. The increase was primarily on account of increased Silver sales and INR depreciation, partially offset by lower metal prices and Zinc volume. The Company achieved record net profits of Rs. 6,899 Crore in FY 2013, up 25%, benefiting from higher sales and other income, partially offset by higher operating costs.

The Zinc metal cost, without royalty, during the quarter was Rs. 44,900 per MT ($829), 8% higher in INR and flat in USD terms from a year ago. The cost for FY 2013 was higher by 14% in INR and flat in USD term at Rs. 45,500 per MT ($835), compared with the previous year. The increase was due to higher strip ratio at Rampura Agucha and lower acid credits, partially offset by lower power costs.


Dividend

HZL’s Board of Directors has recommended a final dividend of 75% i.e. Rs. 1.50 per share on equity share of Rs 2.00 each. The total dividend for FY 2013 is 155% i.e. Rs. 3.10, against FY 2012 dividend of 120% and is the highest ever dividend proposed by the company. The FY 2013 payout ratio is 22% as compared to 21% in FY 2012, inclusive of dividend distribution tax.


Expansion projects

During the year, we announced our next phase of growth plan, which will increase our mined metal production capacity to 1.2 mtpa. Rampura Agucha underground mine and Kayad mine produced development ore in the second half of FY 2013 and will start commercial production in FY 2014.


Reserves and Resources

In FY 2013, there was a gross addition of 24.6 million tonnes to reserves and resources, prior to a depletion of 8.6 million tonnes. Total reserves and resources at 31 March 2013 were 348.3 million tonnes containing 35.1 million tonnes of zinc-lead metal and 910 million ounces of silver. Our mine life continues to be 25+ years.


Outlook

Mined metal production in FY 2014 is projected to increase by 15% to 1.0 mtpa. Integrated saleable Silver production from is projected to be about 360 tonnes in FY 2014.


Liquidity and Investment

The Company follows conservative Investment Policy and invests in high quality Debt instruments in Mutual Fund and Fixed Deposit with Bank. As on 31 March 2013, the Company had cash and cash equivalents of Rs. 21,479 Crore, out of which Rs. 12,276 Crore was invested in debt mutual funds, Rs. 2,151 Crore in bonds, Rs 6,893 Crore were in fixed deposits with Banks and Rs 159 Crore in others.

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