HZL: Net Profit up 6%; Lead-Silver deliver strong gains
The company expects global demand of zinc to increase @ 3-4% per annum. The Indian metal demand is expected to grow more, @ 8-10% per annum.
Results for the First Quarter Ended 30 June 2012
Highlights of the Quarter
– Net profit up 6% to Rs. 1,581 Crore – Refined Lead up 91% from a year ago – Silver production up 75% from a year ago – Cash and cash equivalents of Rs. 19,404 Crore, as at 30 June 2012
Hindustan Zinc Limited (HZL) today announced results for the first quarter (“Q1”) ended 30 June 2012.
Mined metal production during the quarter was in line with current year’s mine plan at 187,000 tonnes, compared to 188,000 tonnes in the corresponding prior quarter. Mined metal output at Sindesar Khurd mine increased by around 60% from a year ago, offsetting lower output from Rampura Agucha mine.
In line with the mine plan and as announced earlier, production in H1 FY2013 is expected to be marginally lower than H1 FY2012, but will be more than made up in H2 FY2013.
Refined Lead production and refined Silver production in Q1 FY2013 increased by 91% and 75% from a year ago, to 31,000 tonnes and 82 tonnes respectively.
The increase was primarily due to ramp-up of SK mine and stabilization of the new Lead & Silver refining capacities. Refined Zinc production was 161,000 tonnes, in line with the anticipated mine production and our guidance.
“To guard against the market fundamentals, the company is implementing a multi-pronged strategy of increasing zinc production and upping lead and consequently silver production. This will help in cost optimization, and healthy operating margins for the company” said Akhilesh Joshi, CEO Hindustan Zinc
He also said that “The company expects global demand of zinc to increase @ 3-4% per annum. The Indian metal demand is expected to grow more, @ 8-10% per annum. India would continue to consume more metal in the light of the fact that per capita consumption of Zinc in the country is amongst the lowest in the world”
Revenues for Q1 FY2013 were Rs. 2,713 Crore, down 4% compared to the corresponding prior quarter. During the quarter, the positive impact of higher Lead-Silver volumes and Rupee depreciation was offset by lower Zinc volume, LME prices of Zinc & Lead and LBMA price of Silver.
Net profit for the quarter was up 6% at Rs. 1,581 Crore, compared to the corresponding prior quarter.
The Zinc COP, excluding royalty, during the quarter was Rs. 45,759 per MT ($844), compared to Rs. 39,117 ($874) in the corresponding prior quarter. The increase was due to higher prices of consumables due to Rupee depreciation and lower metal production.
During the first quarter of FY 2013 we continued to invest in our mining assets achieving significant progress in the underground mine development at Rampura Agucha and are progressing well in Kayar mine development. We expect developmental ore from RA underground mine and Kayar mine in the second half of FY2013. Commercial production from both these mines will start next year. We are in the final stages of developing technical feasibility of our next phase of expansions.
Liquidity and Investments
As at 30 June 2012, the Company had cash and cash equivalents of Rs. 19,404 Crore. This includes Rs. 10,540 Crore in debt mutual funds, Rs. 1,540 in bonds and Rs. 7,310 Crore in fixed deposits with banks. The Company follows a conservative investment policy and invests in high quality debt instruments. All mutual fund investments are based on advice from CRISIL.
via Press Release