- Robust H1 backed by strategic growth projects, sustained cost optimization and ESG excellence.
Highlights
Q2 FY24
- Mined metal production: 252 kt
- Refined metal production: 241 kt
- Saleable silver production: 181 MT
- Zinc COP: US$ 1,137 per MT
H1 FY24
- Mined metal production: 509 kt
- Refined metal production: 501 kt
- Saleable silver production: 360 MT
- Zinc COP: US$ 1,167 per MT
Udaipur, October 20, 2023: Hindustan Zinc Limited, the leading global integrated producer of zinc, lead and silver, reported its results for the second quarter and half year ended September 30, 2023.
Commenting on the performance, Mr. Arun Misra, CEO, said: “Hindustan Zinc witnessed significant milestone achievements in its expansion efforts during the quarter. I am pleased to share the commissioning of our Fumer plant, Rajpura Dariba concentrator and Zinc Alloy facility ensuring a more sustainable, circular and efficient operations. Catalysing growth, our plants and assets are also geared up to maximise performance. With delivery of steady operational performance in first half of the year and ramped up facilities, we are confident of delivering a standout financial year. Advancing swiftly towards our sustainability goals, this quarter we commissioned another 4,000 KLD zero liquid discharge plant at Zawar mines and entered in an agreement for 180 LNG vehicles for green transportation. I am happy to share that our ambitious net zero targets are now approved by SBTi making Hindustan Zinc the only Indian company in mining sector with validated targets.”
Mr. Sandeep Modi, CFO, said: “With our persistent focus on cost optimisation, operational efficiencies and working capital management, Hindustan Zinc delivered another quarter of steady margins and financial performance despite the complex economic landscape. I am happy to share that 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. 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.”
Financial Summary Standalone
INR Crore or as stated
| Particulars | Q2 | Q1 | H1 | |||||
| 2024 | 2023 | Change | 2024 | Change | 2024 | 2023 | Change | |
| Sales1 | ||||||||
| Zinc | 4,034 | 5,824 | -31% | 4,668 | -14% | 8,702 | 12,689 | -31% |
| Lead | 1,117 | 991 | 13% | 961 | 16% | 2,078 | 1,978 | 5% |
| Silver | 1,297 | 1,079 | 20% | 1,298 | -0% | 2,595 | 2,188 | 19% |
| Others | 344 | 442 | -17% | 335 | 3% | 699 | 868 | -19% |
| Total | 6,792 | 8,336 | -18% | 7,282 | -7% | 14,074 | 17,723 | -21% |
| EBITDA | 3,120 | 4,390 | -29% | 3,360 | -7% | 6,481 | 9,668 | -33% |
| Profit After Taxes | 1,737 | 2,681 | -35% | 1,970 | -12% | 3,707 | 5,774 | -36% |
| Earnings per Share | 4.11 | 6.35 | -35% | 4.66 | -12% | 8.77 | 13.67 | -36% |
| (INR, not annualised) | ||||||||
| Mined Metal Production (‘000 MT) | 252 | 255 | -1% | 257 | -2% | 509 | 507 | 0% |
| Refined Metal Production (‘000 MT) | ||||||||
| Total Refined Metal | ||||||||
| Zinc | 185 | 189 | -2% | 209 | -12% | 394 | 395 | 0% |
| Saleable Lead | 57 | 57 | 0% | 51 | 12% | 107 | 110 | -3% |
| Zinc & Lead | 241 | 246 | -2% | 260 | -7% | 501 | 506 | -1% |
| Saleable Silver2 (in MT) | 181 | 194 | -7% | 179 | 1% | 360 | 371 | -3% |
| Wind Power (in million units) | 157 | 124 | 27% | 121 | 29% | 278 | 274 | 2% |
| Refined Metal Sales (kt) | ||||||||
| Zinc (kt) | 185 | 189 | -2% | 208 | -11% | 393 | 395 | -0% |
| Lead (kt) | 57 | 57 | 0% | 50 | 13% | 107 | 110 | -3% |
| Silver (MT) | 181 | 194 | -7% | 179 | 1% | 360 | 371 | -3% |
| Zinc CoP without Royalty (INR/MT) | 93,981 | 1,00,307 | -6% | 98,103 | -4% | 96,144 | 98,748 | -3% |
| Zinc CoP without Royalty ($/MT) | 1,137 | 1,259 | -10% | 1,194 | -5% | 1,167 | 1,260 | -7% |
| Zinc LME ($/MT) | 2,428 | 3,271 | -26% | 2,526 | -4% | 2,476 | 3,580 | -31% |
| Lead LME ($/MT) | 2,170 | 1,976 | 10% | 2,117 | 2% | 2,145 | 2,083 | 3% |
| Silver LBMA ($/oz.) | 23.6 | 19.2 | 23% | 24.1 | -2% | 23.8 | 20.9 | 14% |
| USD-INR (average) | 82.68 | 79.69 | 4% | 82.16 | 1% | 82.42 | 78.38 | 5% |
- Including other operating income
- Silver occurs in Lead & Zinc ore and is recovered in the smelting and silver-refining processes.
Financial Summary Consolidated
INR Crore or as stated
| Particulars | Q2 | Q1 | H1 | |||||
| 2024 | 2023 | Change | 2024 | Change | 2024 | 2023 | Change | |
| Sales1 | ||||||||
| Zinc | 4,033 | 5,824 | -31% | 4,668 | -13% | 8,701 | 12,689 | -31% |
| Lead | 1,117 | 991 | 13% | 961 | 16% | 2,078 | 1,978 | 5% |
| Silver | 1,297 | 1,079 | 20% | 1,298 | 0% | 2,595 | 2,188 | 19% |
| Others | 344 | 442 | -22% | 355 | 3% | 699 | 868 | -19% |
| Total | 6,791 | 8,336 | -19% | 7,282 | -7% | 14,073 | 17,723 | -21% |
| EBITDA | 3,122 | 4,387 | -29% | 3,359 | -7% | 6,481 | 9,665 | -33% |
| Profit After Taxes | 1,729 | 2,680 | -35% | 1,964 | -12% | 3,693 | 5,772 | -36% |
| Earnings per Share | 4.09 | 6.34 | -35% | 4.65 | -12% | 8.74 | 13.66 | -36% |
| (INR, not annualised) | ||||||||
| Mined Metal Production (‘000 MT) | 252 | 255 | -1% | 257 | -2% | 509 | 507 | 0% |
| Refined Metal Production (‘000 MT) | ||||||||
| Total Refined Metal | ||||||||
| Zinc | 185 | 189 | -2% | 209 | -12% | 394 | 395 | 0% |
| Saleable Lead | 57 | 57 | 0% | 51 | 12% | 107 | 110 | -3% |
| Zinc & Lead | 241 | 246 | -2% | 260 | -7% | 501 | 506 | -1% |
| Saleable Silver2 (in MT) | 181 | 194 | -7% | 179 | 1% | 360 | 371 | -3% |
| Wind Power (in million units) | 157 | 124 | 27% | 121 | 29% | 278 | 274 | 2% |
| Refined Metal Sales (kt) | ||||||||
| Zinc (kt) | 185 | 189 | -2% | 208 | -11% | 393 | 395 | -0% |
| Lead (kt) | 57 | 57 | 0% | 50 | 13% | 107 | 110 | -3% |
| Silver (MT) | 181 | 194 | -7% | 179 | 1% | 360 | 371 | -3% |
| Zinc CoP without Royalty (INR/MT) | 93,981 | 1,00,307 | -6% | 98,103 | -4% | 96,144 | 98,748 | -3% |
| Zinc CoP without Royalty ($/MT) | 1,137 | 1,259 | -10% | 1,194 | -5% | 1,167 | 1,260 | -7% |
| Zinc LME ($/MT) | 2,428 | 3,271 | -26% | 2,526 | -4% | 2,476 | 3,580 | -31% |
| Lead LME ($/MT) | 2,170 | 1,976 | 10% | 2,117 | 2% | 2,145 | 2,083 | 3% |
| Silver LBMA ($/oz.) | 23.6 | 19.2 | 23% | 24.1 | -2% | 23.8 | 20.9 | 14% |
| USD-INR (average) | 82.68 | 79.69 | 4% | 82.16 | 1% | 82.42 | 78.38 | 5% |
- Including other operating income
- Silver occurs in Lead & Zinc ore and is recovered in the smelting and silver-refining processes.
Operational Performance
Mined metal production for the quarter was 252 kt, down 1.4% y-o-y and 2.0% sequentially mainly due to lower ore production at Rampura Agucha and Kayad mine partly offset by better overall metal grades. H1 FY24 mined metal production stood at 509 kt, marginally up y-o-y on account of higher ore production largely at Rampura Agucha supported by better overall metal grades.
Refined metal production for the quarter was 241 kt, down 1.8% y-o-y and 7.1% sequentially on account of scheduled maintenance activity. Metal production for H1 FY24 stood at 501 kt, marginally down y-o-y, in line with plant availability.
Integrated zinc production for the quarter was 185 kt, down 2.3% y-o-y and 11.7% sequentially. Refined lead production for the quarter was 57 kt, flat as compared to Q2 FY23 and up 11.7% sequentially on account of pyro plant operations on lead mode during the quarter. H1 FY24 integrated zinc production stood at 394 kt, marginally down y-o-y. Refined lead production was at 107 kt, down 2.7% y-o-y in line with the plant availability.
Saleable silver production for the quarter was 181 MT, marginally up sequentially and down 6.8% y-o-y due to accumulation of WIP in Q2 FY24. H1 FY24 saleable silver production stood at 360 MT, down 3.0% y-o-y in line with lead metal production.
Financial Performance
Revenue from operations during the quarter was INR 6,791 Crore, down 18.5% y-o-y, on account of significantly lower zinc prices, lower zinc and silver volumes and differential strategic hedging impact partly offset by higher lead and silver prices and favourable exchange rates.
Sequentially revenue witnessed a decline of 6.7%, primarily due to lower zinc prices & volume and lower silver prices while being offset by favourable exchange rate, higher lead prices and improved lead & silver volumes.
H1 FY24 revenue from operations stood at INR 14,073 Crore, down 20.6% y-o-y, on account of significantly lower zinc prices, lower metal and silver volumes and differential strategic hedging impact partly offset by higher lead and silver prices and favourable exchange rates.
Zinc cost of production before royalty (COP) for the quarter was US$ 1,137 (INR 93,981) per MT, lower by 9.7% (6.3% lower in INR terms) y-o-y and lower by 4.8% (4.2% lower in INR terms) sequentially. Zinc COP for H1 FY24 was US$ 1,167 (INR 96,144) per MT, lower by 7.4% (2.6% lower in INR terms) y-o-y. Cost improvement is majorly on account of softened coal and input commodity prices, better domestic coal (linkage) availability, further supported by better grades sequentially.
EBITDA for the quarter was INR 3,122 Crore, down 28.8% y-o-y and 7.1% sequentially and for H1 FY24 EBITDA was INR 6,481 Crore, down 32.9% y-o-y, mainly on account of lower revenue being partially offset by cost improvement.
Net profit for the quarter was at INR 1,729 Crore, down 35.5% y-o-y and 12.0% sequentially and for H1 FY24 Net Profit was at INR 3,693 Crore, down 36.0% y-o-y, primarily on account of lower EBITDA partly offset by lower tax expense.
Key Strategic Updates
On 29th September’23, the Board authorized ‘Committee of Directors’ to evaluate value unlocking measures. External advisors to assist in the evaluation exercise have been appointed by the management and work is underway.
Projects Update
- Fumer plant commissioned in Q2 FY24 through remote support of OEM and HZL team from China, making it the first such kind of innovative commissioning across Hindustan Zinc. Full ramp up under progress and targeted by early Q3 FY24
- Rajpura Dariba Mill commissioned. Complete ramp up under progress, targeted by early Q3 FY24
- For Hindustan Zinc Alloys Private Limited (HZAPL), hot commissioning complete and first alloy metal produced in first week of Oct’23
- For the new Roaster at Debari, all orders placed. Engineering and procurement activities ongoing and EPC contractor mobilized at site
- For Hindustan Zinc Fertilisers Private Limited (HZFPL), major orders placed and technology partner onboarded. Engineering and procurement activities are ongoing
ESG Update
- Hindustan Zinc became the first metal and mining company in India to have validated Science Based Targets in line with 1.5o C with approved targets of 50% reduction in Scope 1 & 2 and 25% reduction in Scope 3 GHG emissions by 2030 and net zero by 2050 from base year 2020
- Hindustan Zinc signed a landmark agreement for deploying 180 LNG vehicles for inter-unit and finished goods movement reducing Scope 3 emissions
- Inaugurated a 4,000 KLD Zero Liquid Discharge (ZLD) Plant at Zawar mines to facilitate water recovery and reduction in freshwater dependency, reaffirming the Company’s vision of zero waste & zero discharge and 5x water positivity by 2025
- HZL launched its second battery electric vehicle in the underground mines of Sindesar Khurd (SK)
- Selected to pilot the world’s first Science-Based Targets for Nature
- Rajpura Dariba mine flagged off a wildlife rescue van as a part of the wildlife conservation plan. The van was handed over to the forest department of Rajsamand district
- Zawar Mines received CII National Award in Innovation Project Category for Environment Best Practices
- DSC recognized with Platinum award in metal and mining sector at Apex India Occupational Health and Safety Awards 2023
Liquidity and Investment
Company generated cash flow of INR 2,648 Crore during the quarter. As on September 30, 2023, the Company’s gross investments and cash & cash equivalents were INR 11,393 Crore as compared to INR 9,709 Crore at the end of June’23 which was invested in high quality debt instruments.
Total borrowings outstanding as on Sep’23 was INR 11,323 Crore.
During the quarter, the company paid dividend of INR 2,958 Crore.
Outlook for FY24
We would like to reiterate our guidance for FY24.
Mined metal is expected 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 US$ 1,125-1,175 per MT. Project capex for the year is expected to be in the range of US$ 175-200 million.
Earnings Call on Friday, October 20, 2023, at 16:30 hours (IST)
The Company will hold an earnings conference call on Friday, October 20, 2023, at 16:30 hours IST, where senior management will discuss the Company’s results and performance.
Conference Dial-In Information:
Express Join via internet registration
Please dial the below number at least 5-10 minutes prior to the conference schedule.
Universal Access +91 22 6280 1340, +91 22 7115 8241
Playback Dial-In Numbers +91 22 7194 5757
October 20 – October 27, 2023 Playback Code: 78287
For further information, please contact:
| Jhalak Rastogi
Associate Director – Investor Relations +91 8287262850 |
Maitreyee Sankhla
Interim Head – Corporate Communications maitreyee.sankhla@vedanta.co.in +91 7742161333 |
|
Rahul Challa Team Member – Investor Relations |
About Hindustan Zinc Limited
Hindustan Zinc Limited (BSE: 500188 and NSE: HINDZINC), a Vedanta Group company, is the world’s largest integrated zinc producer and the third-largest silver producer. The company supplies to more than 40 countries and holds a market share of about 75% of the primary zinc market in India. Hindustan Zinc has been recognized as the world’s most sustainable company in the metals and mining category for the second consecutive year by the S&P Global Corporate Sustainability Assessment 2024, reflecting its operational excellence, innovation, and leading ESG practices. The company also launched EcoZen, Asia’s first low carbon ‘green’ zinc brand. Produced using renewable energy, EcoZen has a carbon footprint of less than 1 tonne of carbon equivalent per tonne of zinc produced, about 75% lower than the global average. Hindustan Zinc is also a certified 2.41 times Water-Positive company and is committed to achieving Net Zero emissions by 2050 or sooner. Transforming the lives of 1.9 million people through its focused social welfare initiatives, Hindustan Zinc is among the Top 10 CSR companies in India. As an energy transition metals company, Hindustan Zinc is pivotal in providing critical metals essential for a sustainable future.
LLearn more about Hindustan Zinc on – https://www.hzlindia.com/home/ and follow us on LinkedIn, Twitter, Facebook, and Instagram for more updates.
