“Highest-ever first quarter Mined Metal, Refined Metal & Silver Production; PAT at INR 3,092 Crore, up 56% y-o-y”
Highlights for the Quarter
- Mined metal production: 252 kt
- Refined metal production: 260 kt
- Saleable silver production: 177 MT
- Zinc COP: US$ 1,264 per MT
Udaipur, July 21, 2022: Hindustan Zinc Limited, the leading global integrated producer of zinc, lead and silver, reported its results for the first quarter ended June 30, 2022.
Commenting on the performance, Mr Arun Misra, CEO, said: “Hindustan Zinc delivered best first-quarter production for mined metal, refined metal & silver. With the exit run-rate for both mined & refined metal crossing over one million tonnes, we are fully geared to deliver another stellar performance this year. Board approval received for setting-up of the Fertilizer plant & an additional Roaster is also a welcome move. With such synergetic growth projects along the value chain, we are confident to deliver long-lasting sustainable value for all stakeholders.”
Mr Sandeep Modi, Deputy & Interim CFO, said: “Hindustan Zinc touched a new milestone with highest ever quarterly Revenue, EBITDA and Net Profit. Our proactive approach to cash in the opportunity from higher LME through strategic hedging helped us to protect overall margin in an input commodity inflationary environment. As a management team, we continue to monitor the coal cost situation closely & all efforts are in place to ensure security over the short term and reduce dependence on Thermal in the medium to long term through right investments in renewable projects.”
Financial Summary Standalone
INR. Crore or as stated
| Particulars | Q1 | Q4 | |||
| 2023 | 2022 | Change | 2022 | Change | |
| Sales1 | |||||
| Zinc | 6,865 | 4,291 | 60% | 6,414 | 7% |
| Lead | 988 | 826 | 20% | 940 | 5% |
| Silver | 1,109 | 1,106 | – | 1,036 | 7% |
| Others | 425 | 308 | 38% | 407 | 4% |
| Total | 9,387 | 6,531 | 44% | 8,797 | 7% |
| EBITDA | 5,279 | 3,558 | 48% | 5,007 | 5% |
| Profit After Taxes | 3,093 | 1,983 | 56% | 2,929 | 6% |
| Earnings per Share | 7.32 | 4.69 | 56% | 6.93 | 6% |
| (INR, not annualised) | |||||
| Mined Metal Production (‘000 MT) | 252 | 221 | 14% | 295 | -15% |
| Refined Metal Production (‘000 MT) | |||||
| Total Refined Metal | |||||
| Zinc | 206 | 188 | 10% | 211 | -2% |
| Saleable Lead | 54 | 48 | 11% | 49 | 9% |
| Zinc & Lead | 260 | 236 | 10% | 260 | – |
| Saleable Silver2 (in MT) | 177 | 161 | 10% | 162 | 9% |
| Wind Power (in million units) | 150 | 134 | 12% | 66 | 127% |
| Refined Metal Sales (kt) | |||||
| Zinc (kt) | 206 | 187 | 10% | 214 | -3% |
| Lead (kt) | 54 | 49 | 10% | 49 | 9% |
| Silver (MT) | 177 | 160 | 11% | 162 | 10% |
| Zinc CoP without Royalty (INR/MT) | 97,423 | 78,952 | 23% | 85,378 | 14% |
| Zinc CoP without Royalty ($/MT) | 1,264 | 1,070 | 18% | 1,136 | 11% |
| Zinc LME ($/MT) | 3,915 | 2,916 | 34% | 3,754 | 4% |
| Lead LME ($/MT) | 2,199 | 2,128 | 3% | 2,335 | -6% |
| Silver LBMA ($/oz.) | 22.6 | 26.7 | -15% | 24.0 | -6% |
| USD-INR (average) | 77.06 | 73.76 | 4% | 75.17 | 3% |
- 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 | Q1 | Q4 | |||
| 2023 | 2022 | Change | 2022 | Change | |
| Sales1 | |||||
| Zinc | 6,865 | 4,291 | 60% | 6,414 | 7% |
| Lead | 988 | 826 | 20% | 940 | 5% |
| Silver | 1,109 | 1,106 | – | 1,036 | 7% |
| Others | 425 | 308 | 38% | 407 | 4% |
| Total | 9,387 | 6,531 | 44% | 8,797 | 7% |
| EBITDA | 5,278 | 3,558 | 48% | 5,007 | 5% |
| Profit After Taxes | 3,092 | 1,983 | 56% | 2,928 | 6% |
| Earnings per Share | 7.32 | 4.69 | 56% | 6.93 | 6% |
| (INR, not annualised) | |||||
| Mined Metal Production (‘000 MT) | 252 | 221 | 14% | 295 | -15% |
| Refined Metal Production (‘000 MT) | |||||
| Total Refined Metal | |||||
| Zinc | 206 | 188 | 10% | 211 | -2% |
| Saleable Lead | 54 | 48 | 11% | 49 | 9% |
| Zinc & Lead | 260 | 236 | 10% | 260 | – |
| Saleable Silver2 (in MT) | 177 | 161 | 10% | 162 | 9% |
| Wind Power (in million units) | 150 | 134 | 12% | 66 | 127% |
| Refined Metal Sales (kt) | |||||
| Zinc (kt) | 206 | 187 | 10% | 214 | -3% |
| Lead (kt) | 54 | 49 | 10% | 49 | 9% |
| Silver (MT) | 177 | 160 | 11% | 162 | 10% |
| Zinc CoP without Royalty (INR/MT) | 97,423 | 78,952 | 23% | 85,378 | 14% |
| Zinc CoP without Royalty ($/MT) | 1,264 | 1,070 | 18% | 1,136 | 11% |
| Zinc LME ($/MT) | 3,915 | 2,916 | 34% | 3,754 | 4% |
| Lead LME ($/MT) | 2,199 | 2,128 | 3% | 2,335 | -6% |
| Silver LBMA ($/oz.) | 22.6 | 26.7 | -15% | 24.0 | -6% |
| USD-INR (average) | 77.06 | 73.76 | 4% | 75.17 | 3% |
- 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 at 252 kt, up 13.8% y-o-y on account of higher ore production at Kayad, Sindesar Khurd, Rampura Agucha mines. Sequentially, mined metal production saw a dip of 14.7% owing to lower ore production at our mines and overall metal grades.
Integrated metal production for the quarter was 260 kt, up 9.9% y-o-y, while remaining almost flat sequentially. Quarterly integrated metal production was bolstered by better plant & mined metal availability and was further supported by improved operating parameters. Integrated zinc production was 206 kt, up 9.7% y-o-y and sequentially was 2.4% lower. Integrated lead production for the quarter was up 10.8% y-o-y and 9.2% sequentially to 54 kt on account of the Pyro plant being operated in the Lead-mode for a part of the quarter and better plant availability.
Integrated silver production for the quarter was 177 MT, up 10.2% y-o-y and 9.4% sequentially in line with lead metal production.
Financial Performance
Revenue from operations during the quarter was INR 9,387 Crore, an increase of 43.7% y-o-y, led by higher zinc volumes & zinc LME prices as well as favourable exchange rates while partly offset by lower silver prices. Zinc LME prices and zinc metal sales increased 34.2% and 10.2% respectively as compared to Q1 FY22.
Sequentially revenue increased 6.7%, primarily due to higher zinc LME, gain from strategic hedging and higher lead & silver volumes which was partially offset by lower zinc volumes and lower lead & silver prices. Sequentially lead and silver sales volumes increased by 8.6% & 9.5% respectively.
Zinc cost of production before royalty (COP) was US$ 1,264 (INR 97,423) per MT for the quarter, higher by 18.1% (23.4%) y-o-y and by 11.3% (14.1%) sequentially. The COP was affected largely on account of higher coal prices, input commodity inflation, lower domestic coal (linkage) availability partially offset by higher volume, better Sulphuric Acid realizations & improved recoveries.
EBITDA for the quarter was INR 5,278 Crore, up 48.3% y-o-y, primarily due to higher zinc LME & volumes. Sequentially EBITDA was up 5.4% on account of higher zinc LME prices and lead & silver volumes partly offset by higher cost.
Net profit for the quarter was at INR 3,092 Crore, up 55.9% y-o-y and 5.6% sequentially on account of higher LME prices while being partially offset by the rising input commodity prices.
As part of strategic hedging, Company has sold forward total 21% (incl. sold in Q4 FY22) of expected zinc production for FY23.
Key Strategic Update
- Board has approved the formation of the wholly owned subsidiary company (WOS) for setting up of the 5.0 ltpa Fertilizer plant.
- Board has also approved the setting up of a new roaster plant with a capacity of 160 ktpa.
Projects Update
- For Hindustan Zinc Alloys Private Limited (HZAPL) all orders have been placed and civil job has started at the site. We expect the commissioning to be completed by Q4 FY23.
- Rajpura Dariba Mill revamping for 1.1 million tonnes per annum is underway. Civil construction is in advanced stage, order for all major supplies have been placed and commissioning is expected to complete by Q3 FY23.
- For the Fumer commissioning, NFC team arrived at site and cold commissioning of the equipment has started. Visa process for few of the OEM & NFC experts is in advanced stage.
ESG Update
- GreenCo Rating: DSC and DZS announced with gold and silver rating respectively on the 5th Edition of The 7Rs Conference.
- India’s 1st Battery Electric Vehicle (BEV) in UG Mine introduced at Zawar mine.
- Hindustan Zinc’s risk management system is certified as per ISO 31000:2018.
- Hindustan Zinc’s CEO is appointed as the Chairman of Governing Council of Sustainable Mining initiative of Federation of Indian Mineral Industries (FIMI).
- Nearly 100 suppliers participated for the ‘CEO connect with Business Partners on Sustainability Agenda’.
Liquidity and Investment
As on June 30, 2022, the Company’s gross investments and cash & cash equivalents were INR 24,254 Crore as compared to INR 20,789 Crore at end of March’22.
The Company’s net investments as at end of June 30, 2022, was INR 21,439 Crore as compared to INR 17,966 Crore at end of March’22.
Outlook for FY23
We keep the guidance for FY23 unchanged. Mined metal is expected to be between 1,050-1,075 kt & Refined metal production in the range of 1,000-1,025 kt. FY23 saleable silver production is projected to be between 700-725 MT.
Zinc cost of production in FY23 is expected to be in between US$ 1,125-1,175 per MT. The project capex for the year is expected to be in the range of US$ 125-150 million.
Earnings Call on Thursday, July 21, 2022 at 16:00 hours (IST)
The Company will hold an earnings conference call on Thursday, July 21, 2022 at 16:00 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 71945757, +91 22 66635757
July 21 – July 28, 2022 Playback Code: 43292
For further information, please contact:
| Shweta Arora
Head – Investor Relations +91 9538453097 |
Maitreyee Sankhla
Interim Head – Corporate Communications maitreyee.sankhla@vedanta.co.in +91 7742161333 |
| Siddharth George
Associate Manager – 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.
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