Home >companies >Hindustan Zinc’s Q2 net up 5% to Rs2,285.26 crore

New Delhi: Hindustan Zinc Ltd (HZL) on Monday reported a 5% growth in its net profit at 2,285.26 crore for the quarter ended 30 September 2015 helped by the volume growth and cost optimisation. The Anil Agarwal-led firm had clocked a net profit of 2,183.52 crore in the year-ago period, it said in a BSE filing. The total income of the firm rose by 6% to 4,033.30 crore in the July-September quarter this fiscal from 3,802.38 crore in the same quarter of 2014-15, it added.

Commenting on the performance, HZL chairman Agnivesh Agarwal said in a statement: “We achieved one of our best results by resiliently adhering to our strategy of volume growth, operational efficiency and cost discipline." In anticipation, shares of the company on Monday rose by 3.06% to settle at 158.40 apiece on the BSE. The results came after the close of market hours. HZL said its revenues registered a growth on the back of significant increase in volumes and rupee depreciation even as London Metal Exchange (LME) prices and zinc premiums declined.

“Net profit increased by 5% to 2,285 crore during the quarter as compared to a year ago on account of higher operating profit and increase in investment income, partly offset by higher tax rate," HZL added. Mined metal production rose 13% to 240 kilo tonne (KT) during the quarter compared to a year ago, primarily due to higher ore production across mines. On production cost, HZL said zinc cost of production per tonne before royalty decreased by 8% in rupee term and 15% in US dollar term to 50,236 ($771) as compared to 54,732 ($903) a year ago. “The decrease in cost was driven by higher volumes, reduced fuel prices and cost reduction initiatives, partly offset by regulatory levies and higher underground mine development," it added. HZL said as on 30 September 2015, its cash and cash equivalents stood at 34,568 crore, out of which 25,310 crore was invested in mutual funds, 5,530 crore in bonds and 3,505 crore in fixed deposits.

“The company follows a conservative investment policy and invests in high quality debt instruments," it added. Integrated zinc metal production during the second quarter increased by 22% y-o-y to 211 KT on account of enhanced smelter efficiency and conversion of WIP inventory. Integrated saleable lead and silver metal production was the highest ever during the quarter, up 53% y-o-y to 39 KT and up 64% y-o-y to 110 tonne, respectively.

“This substantial increase was driven primarily by higher mined metal, smelter efficiency and better grades. Silver production also benefited from higher ore grade and volume from Sindesar Khurd mine," HZL said. The government of India holds 29.5% stake in HZL, while rest is with Vedanta Ltd, earlier called Sesa Sterlite.

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