Hindustan Zinc Q2 Results: Net profit drops 35% to ₹1,729 crore; revenue down 18% YoY
- Hindustan Zinc's Q2 revenue from operations in Q2FY24 declined 18.5% to ₹6,792 crore from ₹8,336 crore, YoY.
Hindustan Zinc Ltd, a Vedanta Group company, on Friday reported a net profit of ₹1,729 crore for the second quarter of FY24, witnessing a drop of 35.5% from ₹2,680 crore in the year-ago period.
The company’s revenue from operations in Q2FY24 declined 18.5% to ₹6,792 crore from ₹8,336 crore, YoY.
At the operational front, earnings before interest, taxes, depreciation and amortization (EBITDA) during the September quarter decreased 29% to ₹3,139 crore from ₹4,407 crore in the corresponding quarter of last year.
EBITDA margin compressed by 670 basis points (bps) to 46.2% from 52.9%, YoY.
Zinc cost of production before royalty (COP) for the quarter was $1,137 ( ₹93,981) per MT, lower by 9.7% YoY (6.3% lower in INR terms) and lower by 4.8% sequentially (4.2% lower in INR terms).
“Driven by our cost optimisation efforts, we have successfully achieved third consecutive quarter of sustained cost improvement and the lowest cost in last six quarters,” said Sandeep Modi, CFO, Hindustan Zinc.
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Operational Performance
Mined metal production for the quarter was 252 kt, down 1.4% YoY and 2.0% sequentially mainly due to lower ore production at Rampura Agucha and Kayad mine partly offset by better overall metal grades.
Refined metal production in Q2FY24 declined 1.8% YoY to 241 kt on account of scheduled maintenance activity.
Integrated zinc production was down 2.3% YoY at 185 kt, while saleable silver production fell 6.8% YoY to 181 MT, due to accumulation of WIP in Q2FY24.
“We are well positioned to execute our strategic priorities in FY24 revolving around cost optimisation, digital advancement enhancing our competitive edge, healthy cash flows and robust balance sheet thereby generating long-term sustainable value for shareholders,” Modi added.
Guidance for FY24
The company expects mined metal production to be between 1,075-1,100 kt and refined metal production in the range of 1,050-1,075 kt. Saleable silver production is projected to be between 725-750 MT.
Zinc cost of production in FY24 is expected to be in between $1,125-1,175 per MT. Project capex for the year is expected to be in the range of $175-200 million.
The company’s board has approved pledging of 26% equity held by Hindustan Zinc in Serentica Renewables India 4 (SRIPL 4) in favour of the lenders.
As a part of achieving goal of 50% Green House Gases (GHG) emission reduction by 2030, Hindustan Zinc had already entered into power delivery agreement with SRIPL 4, which is a subsidiary of SRIPL (Serentica Renewables India) under captive scheme for delivering round the clock renewable power.
For financial closure of the project, pledge of 100% equity shares of the SRIPL 4 has to be provided as security to the external commercial borrowing (ECB) lenders of SRIPL 4.
At 2:40 pm, Hindustan Zinc share price was trading 3.74% lower at ₹302.55 apiece on the BSE.
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