Hindustan Zinc on Friday posted net profit at Rs 1,964 crore during the first quarter of FY24, down 36.5 per cent as against Rs 3,092 crore in the corresponding quarter of FY23. The company said that the profit was impacted due to lower metal prices. It posted revenue from operations at Rs 7,111 crore, down 23 per cent in comparison to Rs 9,236 crore during Q1FY23. The drop in revenue was on account of lower zinc & lead LME, lower lead volumes and differential strategic hedging impact partly offset by higher zinc and silver volumes, improved silver prices and favourable exchange rates.
Hindustan Zinc’s total income for the quarter was at Rs 7,564 crore, down 22 per cent from Rs 9,697 crore during Q1FY23. However, the total expenses during the quarter in review was at Rs 4,954 crore, down 1.4 per cent against Rs 5,025 crore during the first quarter of FY23. EBITDA for the quarter was Rs 3,359 crore, down 36.4 per cent YoY, mainly on account of lower zinc and lead LME partly offset by lower costs and better silver prices.
While the zinc, lead and silver business vertical posted revenue at Rs 7,062 crore, wind energy vertical recorded a revenue of Rs 49 crore during the quarter.
Hindustan Zinc’s quarter performance across segments
Hindustan Zinc posted the highest ever quarter mined metal and silver production and maintained a consistent run-rate of refined metal production. The mined metal production for the first quarter stood at 257 kt, up 2.1 per cent on-year on account of higher ore production largely at Rampura Agucha and Kayad mines supported by improved mined metal grades and better mill recovery. “Hindustan Zinc has once again demonstrated its ability to deliver in a highly volatile external environment by accomplishing highest ever first quarter mined metal and silver production and maintaining a consistent run-rate of refined metal production,” said Arun Misra, CEO, Hindustan Zinc. He added that the strategic priorities of the company is to maximise shareholders return, and delivering as per commitment is an accurate reflection of the same. “We strongly believe that in a cyclical commodity business, protecting margins is fundamental, hence our strong focus lies on optimising cost and enhancing volumes,” said Arun Misra.
Meanwhile, the company posted refined metal production at 260 kt for the quarter. Integrated zinc production was 209 kt, up 1.4 per cent on-year. Integrated lead production for the quarter was down 5.7 per cent on-year. Saleable silver production for the quarter was 179 MT, up 1.2 per cent YoY.
As on June 30, 2023, the company’s consolidated gross investments and cash & cash equivalents were Rs 9,709 crore as compared to Rs 10,061 crore at the end of March 2023 which was invested in high quality debt instruments. Total borrowings outstanding as on Jun 2023 was Rs 9,330 crore.
Outlook for FY24
Hindustan Zinc, in its earnings report, said that both mined metal and refined metal production in FY24 is expected to be higher than last year. “Mined metal is expected to be between 1,075-1,100 kt and refined metal production in the range of 1,050-1,075 kt. FY24 saleable silver production is projected to be between 725-750 MT,” the company said. It further added that zinc cost of production in FY24 is expected to be in between $1,125-1,175 per MT and the project capex for the year is expected to be in the range of $ 175-200 million.