The following release was issued today by Vedanta Limited's
subsidiary Hindustan Zinc Limited
"Production grows as expansion projects approach
completion"
Highlights for the quarter
- Refined metal production at 219kt, up 3% y-o-y
- Silver production at 159 MT, up
15% y-o-y
- Mined metal production at 213kt, up 1% y-o-y
MUMBAI, India, July 19, 2019 /PRNewswire/ -- Hindustan Zinc
Limited, the leading global integrated producer of zinc, lead and
silver, reported its results for the first quarter ended
June 30, 2019.
Commenting on the Q1 performance, Ms Kiran Agarwal, Chairman, said, "Our
expansion projects are on track and as they near completion, our
position as an industry leader with large sustainable operations
gets strengthened. We are one of the lowest cost producers with
world-class assets which can deliver high returns to all our
stakeholders in any market environment."
Mr Sunil Duggal,
CEO, said, "We expect production volume to trend up in
the coming quarters and along with internal efficiencies,
technology and digitisation initiatives, costs to progressively
reduce. As we approach the conclusion of 1.2 mtpa expansion, the
journey towards 1.35 mtpa has been initiated. For this, we have
ramped up our exploration to leverage the potential of existing
deposits and new ore bodies to secure our future."
Mr Swayam Saurabh, acting
CFO, said, "We are investing to make our operations
future ready through digital transformation and environment
friendly & cost effective technologies to increase ore-to-metal
ratio. Our balance sheet remains one of the strongest in
India with zero debt and we have
operational discipline to achieve strong cash conversion,
generating about $1 bn in free cash
flow."
Financial Summary
Rs. Crore or as stated
Particulars
|
Q1
|
Q4
|
2020
|
2019
|
Change
|
2019
|
Change
|
Sales1
|
|
|
|
|
|
Zinc
|
3,510
|
3,814
|
-8%
|
3,689
|
-5%
|
Lead
|
684
|
729
|
-6%
|
809
|
-15%
|
Silver
|
576
|
547
|
5%
|
745
|
-23%
|
Others
|
217
|
220
|
-1%
|
248
|
-13%
|
Total
|
4,987
|
5,310
|
-6%
|
5,491
|
-9%
|
EBITDA
|
2,480
|
2,784
|
-11%
|
2,797
|
-11%
|
Profit After
Taxes
|
1,765
|
1,918
|
-8%
|
2,012
|
-12%
|
Earnings per
Share
|
4.18
|
4.54
|
-8%
|
4.76
|
-12%
|
(Rs., not
annualised)
|
|
|
|
|
|
Mined Metal
Production ('000 MT)
|
213
|
212
|
1%
|
245
|
-13%
|
Refined Metal
Production ('000 MT)
|
|
|
|
|
|
Total Refined
Metal
|
|
|
|
|
|
Zinc
|
172
|
172
|
0%
|
175
|
-2%
|
Saleable
Lead2
|
48
|
42
|
13%
|
53
|
-10%
|
Zinc &
Lead
|
219
|
214
|
3%
|
227
|
-4%
|
Saleable
Silver3,4 (in MT)
|
159
|
138
|
15%
|
191
|
-17%
|
Wind Power (in
million units)
|
134
|
139
|
-4%
|
77
|
74%
|
Zinc CoP without
Royalty (Rs. / MT) 4
|
74,219
|
69,907
|
6%
|
69,545
|
7%
|
Zinc CoP without
Royalty ( $ / MT) 4
|
1067
|
1043
|
2%
|
987
|
8%
|
Zinc LME ($ /
MT)
|
2,763
|
3,112
|
-11%
|
2,702
|
2%
|
Lead LME ($ /
MT)
|
1,885
|
2,388
|
-21%
|
2,036
|
-7%
|
Silver LBMA ($ /
oz.)
|
14.9
|
16.5
|
-10%
|
15.6
|
-5%
|
USD-INR
(average)
|
69.58
|
67.04
|
4%
|
70.49
|
-1%
|
(1) Including other operating income
(2) Excluding Captive consumption of
1,822 MT in Q1 FY 2020 as compared
with 1,778 MT in Q1 FY 2019 and 1,403
MT in Q4 FY2019.
(3) Excluding captive consumption of 9.4 MT in
Q1 FY2020 as compared with 9.4 MT in Q1 FY 2019 and 7.5 MT in Q4
FY2019.
(4) Silver occurs in Lead & Zinc ore and is
recovered in the smelting and silver-refining processes.
Operational Performance
Mined metal production was 213kt, up 1% from a year ago, on the
back of 10% higher ore production offset by lower grades. The
sequential decline in mined metal production was due to lower ore
treatment.
Integrated metal production was 219kt, up 3% from a year ago.
Integrated zinc production was 172kt, flat y-o-y in line with mined
metal production. Integrated lead production jumped by 13% y-o-y to
48kt. Integrated silver production was 159
MT, up 15% y-o-y on account of higher lead production.
Sequentially, integrated metal production was down 4% on account of
lower mined metal and annual maintenance shutdown at smelters,
partly offset by WIP conversion.
Financial Performance
Revenue from operations during the quarter was Rs. 4,987 Crore, a decrease of 6% y-o-y primarily due
to an average 13% decline in LME prices, partly offset by higher
lead & silver volumes and rupee depreciation. Lower metal
volumes and weak lead & silver prices along with rupee
appreciation led to a sequential decline in revenue.
Zinc cost of production before royalty (COP) during the quarter
was $ 1067 (Rs. 74,219) per MT,
higher by 8% (7% in Rs) from previous quarter and higher by 2%
y-o-y (6% in Rs). The COP during the quarter was impacted by higher
power cost on account of lower generation due to water scarcity,
more than offsetting the decline in coal price. Other reasons for
the year-over-year increase were lower ore grades, higher mine
development and higher prices for input commodities like cement,
partly offset by higher metal volume and lower diesel prices. The
sequential increase in COP was mainly on account of higher power
cost, lower volume and lower grades.
EBITDA for the quarter was Rs. 2,480
Crore, down 11% y-o-y due primarily to lower metal prices,
as higher volume and lower manpower cost offset increase in power
and other expenses. EBITDA declined sequentially by 11% on account
of lower volume and higher power cost.
The resultant Net Profit for the quarter was Rs. 1,765 Crore, down 8% y-o-y and down 12%
sequentially primarily due to lower EBITDA, partly offset by lower
tax rate. Additionally, Net Profit benefited from higher investment
income from a year ago on account of mark-to-market gain on
investment portfolio.
Expansion Projects
Update on ongoing expansion projects during the quarter
Capital mine development increased by 8% y-o-y to 11.3 km during
the quarter.
At Sindesar Khurd, shaft is fully commissioned and integrated
with mine. The second paste fill plant was commissioned in June,
liberating the mine to operate at full production capacity.
At Rampura Agucha, shaft project is in advanced stage and
expected to be completed in Q3 FY2020.
At Zawar, India's first ever
dry tail stacking plant will be commissioned in the current
quarter, significantly reducing water consumption & land
requirement and addressing tailing dam risk. Additionally, the two
paste fill plants are on track to be commissioned in Q3 FY2020,
enabling mining of left out high grade ore in old pillars.
At Rajpura Dariba, the existing production shaft capacity is
being upgraded from 0.7 to 1.3 mtpa to debottleneck the mine and is
expected to be completed in Q4 FY2020. Further, a
pre-feasibility study has been conducted to pump ore from
underground to the mill to boost ore raising capacity.
Smelter debottlenecking to 1.2 mtpa is in progress, of which
expansion to 1.13 mtpa will be completed in the current quarter.
The commissioning of Fumer has already commenced.
Next phase of mine expansion from 1.20 to 1.35 mtpa
Detailed exercise to evaluate growth potential in grade
improvement, increased tonnage, improved recoveries and increased
reserves has commenced. This study will be followed by detailed
scoping and feasibility by the Project Management Office (PMO)
partner. We expect to have these studies and scoping to complete by
Q4 FY2020.
In the meantime, following activities have commenced and are
expected to be completed in the current quarter:
- Feasibility study on Bamnia Kalan
- Engineering for Rampura Agucha Galena zone and Sindesar Khurd
Deep development and exploration
- Finalisation of PMO
In addition, engineering for water sustainability projects for
Dariba and Zawar operations is under progress.
Liquidity and investment
As on June 30, 2019, the Company's
cash and cash equivalents was Rs. 18,258 as compared to Rs.
16,952 Crore (net) at the end of FY
2019 and was invested in high quality debt instruments. The
portfolio continues to be rated "Tier –1" implying Highest Safety
by CRISIL. During Q1 FY2020, the Company repaid Rs. 2,000 Crore of short term commercial paper and
there is no borrowing outstanding as on June
30, 2019.
Earnings Call on Friday, July 19,
2019 at 4:00 pm (IST)
The Company will hold an earnings conference call on
Friday, July 19, 2019 at 4:00 pm IST, where senior management will discuss
the Company's results and performance.
Conference Dial In Information:
Universal
Access
+91-22-6280-1340 / +91-22-7115-8241
Local Access (Available all over India) +91-70456-71221
Playback Dial In
Numbers +91-22-71945757
July 19 – July 26,
2019 Playback
Code: 60684
For further information, please contact:
Preeti Dubey, CFA
Investor Relations
hzl.ir@vedanta.co.in
Tel: +91-98339-97517
About Hindustan Zinc
Hindustan Zinc (NSE & BSE: HINDZINC) is the one of the
largest integrated producers of zinc-lead in the world with a
capacity of over 1.0 million MT per annum and the 9th
largest global producer of silver. The Company is headquartered in
Udaipur, Rajasthan in India and
has zinc-lead mines at Rampura Agucha, Sindesar Khurd, Rajpura
Dariba, Zawar and Kayad; primary smelter operations at Chanderiya,
Dariba and Debari, all in the state of Rajasthan; and finished
product facilities in the state of Uttarakhand.
Hindustan Zinc has a world-class resource base with a mine life
of over 25 years.
The Company is self-sufficient in power with an installed base
of 474 MW coal-based captive power plants. Additionally, it has
green power capacity of 347 MW including 274 MW of wind power, 39
MW of solar power and 34 MW of waste heat power. The Company has an
operating workforce of over 21,000 including contract
workforce.
Hindustan Zinc is a subsidiary of the BSE and NSE listed Vedanta
Limited (formerly known as Sesa Sterlite Limited; ADRs listed on
the NYSE), a part of Vedanta Resources Ltd, a global diversified
natural resources company.
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 behaviour 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 than those expressed in our forward-looking
statements. We do not undertake to update our forward-looking
statements.
About Vedanta Limited
Vedanta Limited, a subsidiary of Vedanta Resources Limited, is
one of the world's leading diversified natural resource companies
with business operations in India,
South Africa, Namibia and Australia. Vedanta is a leading producer of
Oil & Gas, Zinc, Lead, Silver, Copper, Iron Ore, Aluminium,
Steel and Commercial Power.
Governance and Sustainable Development are at the core of
Vedanta's strategy, with a strong focus on health, safety and
environment and on enhancing the lives of local communities. The
company is conferred with the Confederation of Indian Industry
(CII) 'Sustainable Plus Platinum label', ranking among the top 10
most sustainable companies in India.
Vedanta Limited is listed on the Bombay Stock Exchange and the
National Stock Exchange in India
and has ADRs listed on the New York Stock Exchange.
For more information please visit www.vedantalimited.com
Vedanta Limited
Vedanta, 75, Nehru Road,
Vile Parle (East), Mumbai - 400
099
www.vedantalimited.com
Registered Office:
Regd. Office: 1st Floor, 'C' wing,
Unit 103,
Corporate Avenue, Atul Projects,
Chakala, Andheri (East),
Mumbai – 400 093
CIN: L13209MH1965PLC291394
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 behaviour 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.
For further information, please contact:
Communications
Arun
Arora
Head Corporate Communications
Tel: +91-124-459-3039
arun.arora@vedanta.co.in; gc@vedanta.co.in
Investor Relations
Rashmi Mohanty
Director – Investor Relations
Tel: +91-22-6646-1531
vedantaltd.ir@vedanta.co.in
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