Mr. Agnivesh Agarwal (Chairman, Hindustan Zinc) –
“Hindustan Zinc is currently the world’s largest integrated
Zinc-Lead producer and among the lowest cost producers of Zinc-Lead
in the world. We are consistently evaluating opportunities for
further growth, on the back of our large reserves & resources
base, strong liquidity position & cash flow generation, and low
cost operations.”
Hindustan Zinc Limited (“HZL” or the “Company”) today announced
its results for the second quarter (“Q2”) and half year (“H1”)
ended 30 September 2011.
Unaudited Financial Summary
(In Rs Crore, except as stated)
Quarter Ended Half
Year Ended 30 September Change 30 September Change
2011 2010 %
2011
2010 %
Net Sales/Income from operations
Refined Zinc & concentrate
2,034 1,786 14 %
4,140
3,397 22 % Refined Lead & concentrate
174 172 1 %
418 316 32 % Refined Silver
239 108 121 %
467
209 123 % Payable Silver in concentrate
8 12 -33 %
99
11 800 % Others
138 85 62 %
291 181 61 %
Total
2,593 2,163 20 %
5,415 4,114 32 %
Cash
Profit (PBDT) 1,816 1,289 41 %
3,752 2,462 52 %
Profit After Taxes 1,345 949 42 %
2,840
1,840 54 %
Earnings Per Share (Rs.) 3.18 2.25
42 %
6.72 4.35 54 %
Production - Mined Metal
(Tonnes) Zinc & Lead
209,676 204,836 2 %
398,079 386,766 3 %
Production - Refined Metal
(Tonnes) Zinc
184,816 176,239 5 %
377,796 340,758
11 % Lead (1)
17,005 16,167 5 %
33,196 31,477 5 %
Silver (in kg) (2)
49,274 43,953 12 %
96,056 87,262 10 %
(1) Includes captive consumption of 1,348
tonnes and 2,739 tonnes in Q2 FY2012 and H1 FY2012, as compared
with 1,646 tonnes and 2,812 tonnes in corresponding prior periods,
respectively.
(2) Includes captive consumption of 7,193
kg and 14,389 kg in Q2 FY2012 and H1 FY2012, as compared with 8,612
kg and 14,745 kg in corresponding prior periods, respectively.
Operational Performance
Mined metal production in Q2 was 209,676 tonnes, up 2% as
compared with the corresponding prior quarter.
Refined Zinc production in Q2 was 184,816 tonnes, up 5% as
compared with the corresponding prior quarter, primarily on account
of improved operational performance at our hydro smelters.
Refined Lead production in Q2 was 17,005 tonnes, up 5% as
compared with the corresponding prior quarter. This was primarily
due to volume contribution from the new 100kt Dariba Lead smelter
which was commissioned and capitalized during the quarter.
Refined Silver production in Q2 was 49,274 kg, up 12% as
compared with the corresponding prior quarter. The increase in
production was mainly attributable to higher silver content in the
mined ore and improved plant efficiencies.
Financial Performance
Revenues and net profits for Q2 were Rs. 2,593 Crore and Rs.
1,345 Crore respectively, an increase of 20% and 42%, compared with
the corresponding prior quarter. The increase was primarily on
account of increased volumes and improved Zinc-Lead LME and Silver
prices.
The Zinc metal cost, without royalty, during the quarter was Rs.
38,800 per MT ($847), marginally higher compared with the
corresponding prior quarter. The positive impact of operational
efficiencies was more than offset by the impact of increase in
commodity prices.
During Q2, average Zinc and Lead LME prices were $2,224 per
tonne and $2,459 per tonne respectively, compared with $2,013 per
tonne and $2,032 per tonne, in the corresponding prior quarter.
The average Silver Cash Settlement Price per London Bullion
Market Association increased to $38.80/oz in Q2 FY2012 from
$18.97/oz in the corresponding prior quarter.
Interim Dividend
HZL’s Board of Directors has recommended an interim dividend of
75% i.e. Rs. 1.50 per share on equity share of Rs 2.00 each. This
is the highest ever dividend proposed by the company. The record
date for the payment of interim dividend is 28th October 2011.
Exploration
We continue to maintain our focus on mine exploration, which
will be the key driver of our future growth. In the last 7 years,
exploration activities have added 167 mt, net of depletions, to our
reserve & resource base. We are currently exploring over 6,200
sq km area in 10 ‘Reconnaissance Permits’ (RPs). Our total reserves
& resources base as of 31st March 2011 is 313.2 mt containing
34.7 mt of Zinc-Lead metal and 885 million ounces of Silver,
ensuring long mine life of 25+ years.
Expansion Projects
Ramp-up of the Sindesar Khurd mine is on track to achieve its
targeted 2.0mtpa capacity by the end of the year. The 100ktpa
Dariba Lead smelter was commissioned during the quarter, taking the
total refining capacity for Lead to 185ktpa. The new Silver
refinery of 350tpa is scheduled to be commissioned in Q3 FY2012.
The mining work at underground Kayar mine has commenced and we
expect it to start first ore production in 2013-14.
We have commissioned 105MW of the 150MW expansion in wind power
generation capacity announced in January 2011. The balance capacity
is expected to be commissioned in Q3 FY2012. Post the expansion,
the Company’s wind power generation capacity will increase to
273MW
Liquidity and investment
Company follows conservative Investment Policy and invests in
high quality Debt instruments in Mutual Fund and Fixed Deposit with
Bank. As on 30 September 2011, the Company had cash and cash
equivalents of Rs. 16,229 Crore, out of which Rs. 10,324 Crore was
invested in debt mutual funds and Rs. 5,905 Crore were in fixed
deposits with Banks.
About Hindustan Zinc
HZL is the world’s largest integrated producer of Zinc-Lead. It
has a metal production capacity of 1,064,000 tonnes per annum with
its smelter operations situated in Chanderiya, Debari, Dariba and
Visakhapatnam. HZL has Lead-Zinc mines in Rampura Agucha, Sindesar
Khurd, Rajpura Dariba and Zawar. HZL has over 6,500 employees. The
Company is a subsidiary of the NYSE listed, Sterlite Industries
(India) Limited (NYSE: SLT) and London listed FTSE 100 diversified
metals and mining major, Vedanta Resources plc.
Disclaimer
This press release contains “forward-looking statements” – that
is, statements related to future, not past, events. In this
context, forward-looking statements often address our expected
future business and financial performance, and often contain words
such as “expects,” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “should” or “will.” Forward–looking statements by their
nature address matters that are, to different degrees, uncertain.
For us, uncertainties arise from the behavior of financial and
metals markets including the London Metal Exchange, fluctuations in
interest and or exchange rates and metal prices; from future
integration of acquired businesses; and from numerous other matters
of national, regional and global scale, including those of a
political, economic, business, competitive or regulatory nature.
These uncertainties may cause our actual future results to be
materially different that those expressed in our forward-looking
statements. We do not undertake to update our forward-looking
statements.
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