MUMBAI, India, October 20, 2014 /PRNewswire/ --
The following release was issued by Sesa Sterlite Limited's subsidiary Hindustan Zinc Limited.
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Hindustan Zinc Limited
Results for the Second Quarter Ended September 30, 2014
"EBITDA increases 5%, Net profit up 33%; 95% interim dividend paid"
Highlights for the quarter
Hindustan Zinc Limited today announced its results for the second quarter ended September 30, 2014.
(Logo: http://photos.prnewswire.com/prnh/20140117/663814 )
Financial Summary
(In Rs. Crore, except as stated)
Particulars Q2 Q1 H1
2015 2014 Change 2015 2015 2014 Change
Net Sales/Income from Operations
Zinc 2,839 2570 10% 2,057 4,896 4556 7%
Lead 443 453 -2% 452 895 855 5%
Silver 313 388 -19% 318 631 796 -21%
Others 154 110 40% 136 290 253 15%
Total 3,749 3521 6% 2,963 6712 6,460 4%
EBITDA 2,000 1904 5% 1,352 3,352 3,410 -2%
Profit After Taxes 2,184 1640 33% 1,618 3,801 3,301 15%
Earnings per Share (Rs.) 5.17 3.88 33% 3.83 9.00 7.81 15%
Mined Metal Production ('000 MT) 213 222 -4% 163 376 459 -18%
Refined Metal Production ('000 MT)
Total Refined Zinc 181 196 -8% 141 321 370 -13%
- Refined Zinc - Integrated 174 195 -11% 139 312 368 -15%
Total Saleable Refined Lead[1] 30 30 0% 31 61 61 0%
- Saleable Lead - Integrated 26 29 -12% 22 47 56 -16%
Total Refined Saleable
Silver[2],[3](in MT) 80 90 -11% 82 162 186 -13%
- Saleable Silver - Integrated 67 83 -19% 56 123 160 -23%
Wind Power (in million units) 170 151 13% 146 316 313 1%
Zinc CoP without Royalty (Rs. / MT) 55,154 50,522 9% 60,093 57,306 48,615 18%
Zinc CoP without Royalty ( $ / MT) 910 816 12% 1,005 952 822 16%
Zinc LME ($ / MT) 2,311 1,859 24% 2,074 2,196 1,850 19%
Lead LME ($ / MT) 2,181 2,102 4% 2,096 2,140 2,076 3%
Silver LBMA ($ / oz.) 19.8 21.4 -7% 19.6 19.7 22.2 -11%
USD-INR 60.6 62.1 -2% 59.8 60.2 59.1 2%
(1) Excluding captive consumption of 1,762 MT in Q2 FY 2015 and 3,451 MT in H1 FY 2015, as compared with 1,700 MT and 3,344 MT respectively in corresponding prior periods.
(2) Excluding captive consumption of 9.1 MT in Q2 FY 2015 and 17.8 MT in H1 FY 2015, as compared with 9.0 MT and 17.8 MT respectively in corresponding prior periods.
(3) Silver occurs in Lead & Zinc ore and is recovered in the smelting and silver-refining processes
Note: Numbers may not add up due to rounding off.
Mr. Agnivesh Agarwal, Chairman - "Positive zinc fundamentals have translated into improved LME prices. At the same time, we continue to demonstrate our commitment towards project development and delivering value to stakeholders. We remain focused on improving the profitability of our operations."
Operational Performance
Mined metal production in Q2 FY 2015 was up by 30% sequentially at 212,575 MT, as compared with 163,131 MT in previous quarter and down 4% from 221,646 MT a year ago. For six month period, mined metal production was 375,706 MT as compared to 459,471 MT in H1 FY 2014. This is in line with our mine plan at Rampura Agucha of lower mined metal production in the first half of the year as we excavated more waste than ore and exposed the ore body by September; this will contribute higher volumes in the second half of the year.
Integrated production of refined zinc, lead and silver were up sequentially by 25%, 18% and 21% respectively but were down on year on year basis due to planned lower MIC production in H1 and smelter shutdowns.
The zinc metal cost of production before royalty during the quarter was Rs. 55,154 ($910), which is higher by 9% (12% in USD terms) from a year ago, though it improved significantly from Q1. The increase is attributed to lower production volumes, smelter shutdown costs, increased employee expense on account of long-term wage agreement and higher mine development expenses, partly offset by higher credits and rupee appreciation.
The long term wage agreement will result in an increase of $16 per MT on zinc cost of production on a recurring basis, which is already factored in the above mentioned COP.
Financial Performance
Revenues were up 6% to Rs. 3,749 crore in Q2 FY 2015 from a year ago. The y-o-y increase was driven by higher zinc LME price, partly offset by lower volumes & silver prices and rupee appreciation. In H1 FY 2015, revenues increased by 4% to Rs. 6,712 crore.
EBITDA was up by 5% to Rs. 2,000 crore in Q2 FY 2015 as compared to previous year, primarily due to higher LME prices despite lower volumes and the recent increase in royalty rates[1]. For six month period, EBITDA witnessed a marginal decline of 2%.
Net profit increased by 33% to Rs. 2,184 crore in Q2 FY 2015 as compared to corresponding prior quarter. The impact of EBITDA increase was further accentuated by strong treasury income during the period. In H1 FY 2015, net profit was up by 15% to Rs. 3,801.
Expansion Projects
Mine development has increased 21% in H1 to 24.9 km from 20.6 km a year ago.
All expansion projects are advancing well although the progress of Rampura Agucha underground was slower than expectation in H1. Underground mine development rates at Rampura Agucha are expected to improve during H2 due to enhancement in productivity and resources. To mitigate the risk of delay in expansion projects, mine design and planning for further deepening of the pit at Rampura Agucha is under progress, which will extend the life of the open pit. The preparatory work for pit deepening is likely to be initiated in the last quarter.
Shaft sinking at Sindesar Khurd is ahead of schedule and has reached a depth of 950m while Rampura Agucha main shaft has reached a depth of 430m. Paste fill plants at these locations were completed and capitalised during the quarter.
During the quarter, environmental clearance was received for enhancement of production capacity of Kayad mine from 0.35 MTPA to 1.0 MTPA.
Outlook
We reiterate our guidance of marginal growth in mined metal and silver production in FY 2015. Integrated zinc-lead metal production is expected to witness a strong growth in H2 over H1, in sync with mined metal production growth.
Interim Dividend
The Board of Directors had declared an interim dividend of 95% i.e Rs 1.90 per share on equity share of Rs 2.00 each, as compared to interim dividend of Rs 1.60 per share last year. This was paid out towards the end of the quarter.
Liquidity and investment
As on September 30, 2014, the Company had cash and cash equivalents of Rs. 27,475 crore, out of which Rs. 25,241 crore was invested in mutual funds and Rs. 2,214 crore in bonds. The Company follows a conservative investment policy and invests in high quality debt instruments.
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1. Zinc and Lead mining royalty increased during the quarter w.e.f 01.09.2014. Zinc royalty increased from 8.4% to 10.0% and lead royalty increased from 12.7% to 14.5% of respective LME prices chargeable on contained metal in the ore produced.
For further information, please contact:
Preeti Dubey, CFA Ekta Singh
General Manager Associate Manager
Investor Relations Investor Relations
Hindustan Zinc Limited Hindustan Zinc Limited
[email protected] [email protected]
Tel: +91-294-6604017 Tel: +91-800-3099676
About Hindustan Zinc
Hindustan Zinc (NSE & BSE: HINDZINC) is the one of the largest integrated producers of zinc-lead with a capacity of 1.0 million MT per annum and a leading 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 total reserve & resource of 365.1 million MT and average zinc-lead reserve grade of 12.0%. The Company has a track record of consistently growing its reserve & resource base since 2003 and currently has 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 309 MW including 274 MW of wind power and 35 MW of waste heat power. The Company has an operating workforce of over 18,000 including contract workforce.
Hindustan Zinc is a subsidiary of the BSE and NSE listed Sesa Sterlite Limited (ADRs listed on the NYSE), a part of London listed 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 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
Roma Balwani Tel: +91-22-6646-1000
President - Group Communications, [email protected]
Sustainability & CSR
Investor Relations
Ashwin Bajaj Tel: +91-22-6646-1531
Director - Investor Relations [email protected]
Sheetal Khanduja
Associate General Manager - Investor Relations
About Sesa Sterlite Limited
Sesa Sterlite Limited ("Sesa Sterlite") is one of the world's largest diversified natural resources companies. Our business primarily involves exploring, extracting and processing minerals and oil & gas. We produce oil & gas, zinc, lead, silver, copper, iron ore, aluminium and commercial power and have a presence across India, South Africa, Namibia, Ireland, Australia, Liberia and Sri Lanka. Sesa Sterlite has a strong position in emerging markets with over 80% of its revenues from India, China, East Asia, Africa and the Middle East.
Sustainability is at the core of Sesa Sterlite's strategy, with a strong focus on health, safety and environment and on enhancing the lives of local communities.
Sesa Sterlite is a subsidiary of Vedanta Resources plc, a London-listed company. Sesa Sterlite is listed on the Bombay Stock Exchange and the National Stock Exchange in India and has ADRs listed on the New York Stock Exchange.
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.
Sesa Sterlite Limited
(Formerly known as Sesa Goa Limited)
Vedanta, 75, Nehru Road,
Vile Parle (East), Mumbai - 400 099
http://www.sesasterlite.com
Registered Office:
Sesa Ghor, 20 EDC Complex,
Patto, Panaji (Goa) - 403 001
CIN: L13209GA1965PLC000044
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