Vedanta Group firm Hindustan Zinc (HZL) today posted a 42.3 per cent jump in net profit to Rs 3,056.96 crore for the quarter ended March 31, 2017, on the back of higher production and sale of mined metal. The company had posted a net profit of Rs 2,147.22 crore in the year-ago quarter, HZL said in a filing to BSE. Its total income during the quarter was Rs 7,237.28 crore, a rise of 72.4 per cent over the year-ago period.
“Revenues during the quarter were Rs 6,699 crore, up 97 per cent Y-o-Y on account of strong zinc, lead and silver prices, higher production and sale of mined metal,” the company said in a statement. HZL Chairman Agnivesh Agarwal said the 2016-17 fiscal has been record breaking for Hindustan Zinc in many ways. The record performance of the company, supported by strong zinc prices, helped HZL generate unparallelled value for its stakeholders during the year, he added.
“The company returned Rs 27,157 crore…to shareholders in the 12 months ended March 31, 2017, a record in Indian corporate history. I am also pleased to see the company’s record contribution to the government treasury (including royalties, taxes and dividends) of Rs 17,760 crore,” the chairman said.
The company achieved highest-ever mined metal production during the quarter, up 13 per cent from previous quarter and 66 per cent Y-o-Y. The increase was on account of higher volumes from Rampura Agucha open cast mine, in line with the mine plan and as per the guidance of higher production in the second half of FY’17.
“Mined metal production during the full year period was at 907kt, up 2 per cent Y-o-Y in line with guidance. Production from underground mines ramped up significantly during the year to achieve a substantial 44 per cent Y-o-Y increase in ore production and 32 per cent Y-o-Y increase in mined metal production,” HZL said.
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“Integrated zinc metal production during the quarter was at 215 kt, up 5 per cent Q-o-Q and 40 per cent Y-o-Y. Integrated saleable lead metal production during the quarter was the highest ever at 45kt, up 15 per cent Q-o-Q and 18 per cent Y-o-Y,” it said. The increase was in line with availability of mined metal, supported by enhanced smelter efficiencies.
“Total integrated zinc-lead metal production was at an all-time high of 260kt. Integrated saleable silver production during the quarter was also a record at 139 MT, up 18 per cent quarter-on-quarter and 14 per cent Y-o-Y due to higher grades and volume from Sindesar Khurd mine,” it said.
When the mining expansion projects were announced in early 2013, share of mined metal from underground mines was 15 per cent, which increased to 52 per cent in FY’17 and is expected to reach 80 per cent in fiscal 2017-2018 before being 100 per cent in FY’19. This is a testimony to the company’s smooth transition from open cast mining to underground mining.
The mining projects should complete in FY’20 when the full capacity of 1.2 million tonnes of mined metal is expected to be in place. Both, the Rampura Agucha and Sindesar Khurd shafts are on track for completion in FY’19. The capex on the on-going mine expansion projects, fumer and smelter de-bottlenecking will be around USD 350-360 million in FY’18.
“In FY 2018, mined metal production is expected to be higher from FY 2017. Refined zinc-lead metal production will be around 950kt, which will be evenly spread through the year. Silver production will be over 500 MT,” the company said.