Hindustan Zinc Q2 profit rises 34%
New Delhi: Buoyed by higher zinc and lead prices and an exceptional gain of Rs291 crore, Hindustan Zinc Ltd (HZL) on Monday reported a 33.8% year-on-year jump in net profit to Rs2,545 crore in the quarter ended September.
London Metal Exchange (LME) zinc prices were up 31% from the year-ago period to $2,963/tonne, while LME lead prices were up 25% during the same period to $2,334/tonne, the company said.
The exceptional gain pertains to reversal of provisions made for contribution to the District Mineral Foundation on the basis of a recent Supreme Court ruling, the Vedanta Group company said in a statement.
HZL said revenue rose 37.4% during the period to Rs5,232 crore. Earnings before interest, tax, depreciation and amortization (Ebitda), an indicator of operating profitability, jumped 45.6% to Rs3,024 crore.
The company said refined zinc-lead metal production rose 27% from the year-ago period to 230 kilo-tonnes, while zinc cost of production (before royalty) rose 22% to $984/tonne. “The y-o-y (year-on-year) increase was primarily on account of a 74% increase in the dollar price of imported coal, almost doubling of metcoke prices and higher mine development, partially offset by increase in volumes,” HZL added.
The company also reiterated its full year production guidance – zinc-lead metal at 950 kilo-tonnes and refined silver at over 500 tonnes – while adding that the cost of production is likely to remain elevated.
“Based on the significant increase in the commodity prices compared to last year, cost of production for financial year 2017-18 is likely to be in the range of $900-950 per tonne,” it said.
Projecting the total capital expenditure for the full year to be about $300-325 million, the company said it was on track to achieving mined metal production capacity of 1.2 million tonnes per annum (MTPA) by the financial year 2019-20.
“As our journey of 1.2 million tonnes of mined metal is coming closer, we are evaluating the next phase of our capacity expansion,” Agnivesh Agarwal, HZL’s chairman, said.