Hindustan Zinc Limited
Hindustan Zinc Limited
Results for the First Quarter Ended June 30, 2021
“PAT at INR1,983 Cr., up 46% Y-o-Y, Record-High first quarter refined metal & silver production”
Highlights for the quarter
· Mined metal production: 221kt
· Refined metal production: 236kt
· Saleable silver production: 161 tons
· Zinc COP: $1070 per ton
Udaipur, July 22, 2021: Hindustan Zinc Limited, the leading global integrated producer of zinc, lead and silver, reported its results for the first quarter ended June 30, 2021.
Commenting on the Q1 performance, Mr Arun Misra, CEO, said: “We delivered highest-ever Q1 ore, refined metal & silver production. After exiting at a run-rate of 1.2 mtpa in fiscal year 2021, we maintained the momentum of production in Q1 with Year-on-Year growth of 15% in ore, 17% in refined metal & 37% in silver inspite of the spurt in covid cases in the second wave of the pandemic. Besides good operational performance, I am happy to inform that Hindustan Zinc has received 'Most Sustainable Company in the Mining Industry – 2021' award from World Finance Sustainability Award 2021. Also, our Rampura Agucha mine has won CII's 'Best Application & Use of Renewable Energy' award in the 5th Edition CII National Energy Efficiency circle -2021”
Mr Vinaya Jain, Sr. VP & Head Finance, said: “We delivered our best ever Q1 Revenue, EBITDA and Profit after tax (PAT). Our strong balance sheet enables us to make proactive investments in operations and digitalization that will further enhance our mining output. We do recognize the headwinds from rising input commodity prices and are doubling our efforts to address them through long lasting structural cost initiatives. Additionally, we remain committed to our ESG goals and will continue to deploy necessary resources towards them. Sharp focus on cost leadership and profitability while building a sustainable business, will ensure long term value to all stakeholders.”
Financial Summary
INR. Crore or as stated
(1) Including other operating income
(2) Excluding Captive consumption of 1,611 MT in Q1 FY 2022 as compared with 1,202 MT in Q1 FY 2021 and 1,825 MT in Q4 FY2021.
(3) Excluding captive consumption of 8.9 MT in Q1 FY2022 as compared with6.2 MT in Q1 FY 2021 and 9.1 MT in Q4 FY2021.
(4) Silver occurs in Lead & Zinc ore and is recovered in the smelting and silver-refining processes.
Operational Performance
Integrated metal production was 236kt for the quarter, up 17% y-o-y in line with higher mined metal availability. Sequentially it was down 8% in-line with lower ore production due to lack of operator availability at the mines in view of second wave of COVID-19.
Integrated zinc production was 188kt, up 20% y-o-y and down 4% sequentially. Integrated lead production was 48kt, up 9% y-o-y and down 21% sequentially.
Integrated silver production was 161tons, up 37% from a year ago in line with higher lead production, partly offset by lower grades at Sindesar Khurd (SK) mine, while it was down 21% sequentially primarily in-line with lower lead production.
Financial Performance
Sequentially, revenue was down 5%, primarily driven by lower zinc, lead and silver volumes, lower metal premium, partly offset by higher zinc & lead LME prices and rupee depreciation. Zinc volume was down 5% and lead & silver volumes were both down 21% each. This was mainly due to lack of operator availability in view of second wave of covid-19. Zinc LME prices were sequentially up 6%, while lead prices were up 5%.
Sequentially there was an increase in coal and diesel prices, cement prices as well as higher power costs coupled with lower volumes leading to an upward pressure on COP which was only partly offset by higher sulphuric acid credits and lower met coal cost.
EBITDA for the quarter soared to INR 3,558 Crore, up 123% y-o-y and down 8% sequentially. Year-on-Year EBITDA was up on account of higher Zinc Lead LME and increase in Silver prices as well as higher metal premiums. Sequentially EBITDA was lower on account of lower revenue, and higher costs.
Net profit for the quarter was INR 1,983 Crore, up 46% y-o-y and down 20% sequentially. Increase was mainly driven by recovery in metal prices and higher volumes.
Outlook for FY22
Both mined metal and finished metal production in FY2022 is expected to be c.1025-1050 KT each.
FY2022 saleable silver production is projected at c.720 MT.
Zinc cost of production in FY2022 is expected to remain below $1000 per MT.
The project capex for the year is expected to be approximately US$100 million.
Projects Update
Digitalisation drive across all mines continued during the quarter. Initiatives such as setting up of digital control room with short interval control to Reducing stope cycle time, Online analyser for impurity tracking to maintain higher current efficiencies are underway.
Post integration, the shafts at Rampura Agucha mine and Sindesar Khurd mine are fully operational. Ventilation & cooling systems (chiller units) have been deployed to facilitate the same in a seamless manner. Moreover, increased usage of Advanced Process Control (APC) at both SK and RD Mills for purpose of grinding are used to improve recoveries.
Liquidity and investment
The Company’s net investments and cash & cash equivalents as at end of June 30, 2021 was Rs.17,249 Crore as compared to Rs.15,130 Crore at the end of the fourth quarter (Mar’21) and was invested in high quality debt instruments.
For further information please contact:
- Ms. Dipti Agrawal
Head - Corporate Communications
Hindustan Zinc Limited
- Ms. Shweta Arora
Head – Investor Relations
Hindustan Zinc Limited
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