“Delivered YoY increase in quarterly metal volume by 18%, silver by 28% and PAT by 33%.”
Highlights Q2 FY23
- Mined metal production: 255 kt
- Refined metal production: 246 kt
- Saleable silver production: 194 MT
- Zinc COP: US$ 1,259 per MT
Udaipur, October 21, 2022: 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, 2022.
Commenting on the performance, Mr Arun Misra, CEO, said: “Our world-class mining assets backed with our zeal for operational excellence has enabled us to deliver consistent results in the toughest of circumstances. We have further accelerated our digitalisation efforts to aid in our business efficiency & safety. With last twelve months run-rate for both mined & refined metal comfortably sustaining above one million tonnes, we are fully geared to deliver another stellar performance this year. In-line with our commitment to net zero by 2050, I am happy to share that we have signed a Power Delivery Agreement for sourcing up to 200 MW renewable energy, which will avoid 1.2 million MT of carbon emission.”
Mr Sandeep Modi, Deputy & Interim CFO, said: “We continue to maintain our cost leadership in the global zinc cost curve despite spiralling energy prices and mounting inflationary pressures. With our proactive investments in automation & digitalisation along with razor sharp focus on cost optimisation initiatives & improvement in overall efficiencies, we are confident to deliver superior returns to our shareholders.”
Financial Summary Standalone
INR. Crore or as stated
| Particulars | Q2 | Q1 | H1 | |||||
| 2023 | 2022 | Change | 2023 | Change | 2023 | 2022 | Change | |
| Sales1 | ||||||||
| Zinc | 5,824 | 3,926 | 48% | 6,865 | -15% | 12,689 | 8,217 | 54% |
| Lead | 991 | 885 | 12% | 988 | 0% | 1,978 | 1,710 | 16% |
| Silver | 1,079 | 983 | 10% | 1,109 | -3% | 2,188 | 2,089 | 5% |
| Others | 442 | 328 | 35% | 425 | 4% | 868 | 637 | 36% |
| Total | 8,336 | 6,122 | 36% | 9,387 | -11% | 17,723 | 12,653 | 40% |
| EBITDA | 4,390 | 3,332 | 32% | 5,279 | -17% | 9,668 | 6,890 | 40% |
| Profit After Taxes | 2,681 | 2,017 | 33% | 3,093 | -13% | 5,774 | 4,000 | 44% |
| Earnings per Share | 6.35 | 4.77 | 33% | 7.32 | -13% | 13.67 | 9.47 | 44% |
| (INR, not annualised) | ||||||||
| Mined Metal Production (‘000 MT) | 255 | 248 | 3% | 252 | 1% | 507 | 470 | 8% |
| Refined Metal Production (‘000 MT) | ||||||||
| Total Refined Metal | ||||||||
| Zinc | 189 | 162 | 16% | 206 | -8% | 395 | 350 | 13% |
| Saleable Lead | 57 | 47 | 22% | 54 | 5% | 110 | 95 | 16% |
| Zinc & Lead | 246 | 209 | 18% | 260 | -6% | 506 | 445 | 13% |
| Saleable Silver2 (in MT) | 194 | 152 | 28% | 177 | 10% | 371 | 313 | 19% |
| Wind Power (in million units) | 124 | 155 | -20% | 150 | -17% | 274 | 289 | -5% |
| Refined Metal Sales (kt) | ||||||||
| Zinc (kt) | 189 | 164 | 15% | 206 | -9% | 395 | 352 | 12% |
| Lead (kt) | 57 | 47 | 22% | 54 | 6% | 110 | 95 | 16% |
| Silver (MT) | 194 | 152 | 27% | 177 | 9% | 371 | 312 | 19% |
| Zinc CoP without Royalty (INR/MT) | 1,00,307 | 83,208 | 21% | 97,423 | 3% | 98,748 | 80,991 | 22% |
| Zinc CoP without Royalty ($/MT) | 1,259 | 1,124 | 12% | 1,264 | – | 1,260 | 1,096 | 15% |
| Zinc LME ($/MT) | 3,271 | 2,991 | 9% | 3,915 | -16% | 3,580 | 2,955 | 21% |
| Lead LME ($/MT) | 1,976 | 2,340 | -16% | 2,199 | -10% | 2,083 | 2,237 | -7% |
| Silver LBMA ($/oz.) | 19.2 | 24.4 | -21% | 22.6 | -15% | 20.9 | 25.5 | -18% |
| USD-INR (average) | 79.69 | 74.02 | 8% | 77.06 | 3% | 78.38 | 73.89 | 6% |
- 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 | |||||
| 2023 | 2022 | Change | 2023 | Change | 2023 | 2022 | Change | |
| Sales1 | ||||||||
| Zinc | 5,824 | 3,926 | 48% | 6,865 | -15% | 12,689 | 8,217 | 54% |
| Lead | 991 | 885 | 12% | 988 | 0% | 1,978 | 1,710 | 16% |
| Silver | 1,079 | 983 | 10% | 1,109 | -3% | 2,188 | 2,089 | 5% |
| Others | 442 | 328 | 35% | 425 | 4% | 868 | 637 | 36% |
| Total | 8,336 | 6,122 | 36% | 9,387 | -11% | 17,723 | 12,653 | 40% |
| EBITDA | 4,387 | 3,332 | 32% | 5,278 | -17% | 9,665 | 6,890 | 40% |
| Profit After Taxes | 2,680 | 2,017 | 33% | 3,092 | -13% | 5,772 | 4,000 | 44% |
| Earnings per Share | 6.34 | 4.77 | 33% | 7.32 | -13% | 13.66 | 9.47 | 44% |
| (INR, not annualised) | ||||||||
| Mined Metal Production (‘000 MT) | 255 | 248 | 3% | 252 | 1% | 507 | 470 | 8% |
| Refined Metal Production (‘000 MT) | ||||||||
| Total Refined Metal | ||||||||
| Zinc | 189 | 162 | 16% | 206 | -8% | 395 | 350 | 13% |
| Saleable Lead | 57 | 47 | 22% | 54 | 5% | 110 | 95 | 16% |
| Zinc & Lead | 246 | 209 | 18% | 260 | -6% | 506 | 445 | 13% |
| Saleable Silver2 (in MT) | 194 | 152 | 28% | 177 | 10% | 371 | 313 | 19% |
| Wind Power (in million units) | 124 | 155 | -20% | 150 | -17% | 274 | 289 | -5% |
| Refined Metal Sales (kt) | ||||||||
| Zinc (kt) | 189 | 164 | 15% | 206 | -9% | 395 | 352 | 12% |
| Lead (kt) | 57 | 47 | 22% | 54 | 6% | 110 | 95 | 16% |
| Silver (MT) | 194 | 152 | 27% | 177 | 9% | 371 | 312 | 19% |
| Zinc CoP without Royalty (INR/MT) | 1,00,307 | 83,208 | 21% | 97,423 | 3% | 98,748 | 80,991 | 22% |
| Zinc CoP without Royalty ($/MT) | 1,259 | 1,124 | 12% | 1,264 | – | 1,260 | 1,096 | 15% |
| Zinc LME ($/MT) | 3,271 | 2,991 | 9% | 3,915 | -16% | 3,580 | 2,955 | 21% |
| Lead LME ($/MT) | 1,976 | 2,340 | -16% | 2,199 | -10% | 2,083 | 2,237 | -7% |
| Silver LBMA ($/oz.) | 19.2 | 24.4 | -21% | 22.6 | -15% | 20.9 | 25.5 | -18% |
| USD-INR (average) | 79.69 | 74.02 | 8% | 77.06 | 3% | 78.38 | 73.89 | 6% |
- 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 255 kt, up 2.8% y-o-y on account of better grades and improved mill recoveries. On a sequential basis mined metal production grew by 1.4% largely on account of better grades. Overall H1 FY23 mined metal production was 507 kt, an increase of 8.0% y-o-y owing to increased ore production, further supported by better grades and improved operational efficiencies.
Integrated metal production for the quarter was 246 kt, up 17.5% y-o-y, in line with improved smelter performance, better mined metal availability and base impact due to extended maintenance shutdown during the same period last year. On a sequential basis, integrated metal production witnessed a decrease of 5.5% due to lower roaster availability on account of the breakdown of an acid storage tank at the Chanderiya plant during Q2 FY23 and the time taken in ramp up of production post maintenance. Overall H1 FY23 integrated metal production was 506 kt, a growth of 13.5% y-o-y, resulting from consistent mined metal flow from mines and better plant availability partly offset by acid storage tank breakdown at Chanderiya plant in Q2 FY23.
Integrated zinc production for the quarter was 189 kt, up 16.4% as compared to Q2 FY22 and was 8.3% lower sequentially. For H1 FY23, integrated zinc production was at 395 kt a 12.8% increase as compared to H1 FY22. Integrated lead production for the quarter was up 21.5% y-o-y and 5.3% sequentially to 57 kt on account of the Pyro plant being operated in the Lead-mode for a part of the quarter and better plant availability. For H1 FY23, integrated lead production at 110 kt was up 16.1% y-o-y. Integrated silver production for the quarter was up 27.6% y-o-y and 9.5% sequentially at 194 MT in line with lead metal production and WIP liquidation. For H1 FY23, integrated silver production was up 18.6% y-o-y to 371 MT in line with lead metal production.
Financial Performance
Revenue from operations during the quarter was INR 8,336 Crore, an increase of 36.2% y-o-y, on account of higher refined metal & silver volumes, gain from strategic hedging, zinc prices and favourable exchange rates partly offset by lower lead and silver prices.
Sequentially revenue witnessed a decline of 11.2%, primarily due to lower zinc prices & volume and lower lead & silver prices while being offset by gain from strategic hedging, favourable exchange rate and improved lead & silver volumes. Sequentially lead and silver sales volumes increased by 6.0% & 9.1% respectively.
H1 FY23 Revenue from operation stood at INR 17,723 Crore, up 40.1% y-o-y, led by higher zinc volumes & prices, gain from strategic hedging, favourable exchange rates and increased lead & silver volumes while being partially offset by lower lead and silver prices.
Zinc cost of production before royalty (COP) was US$ 1,259 (INR 1,00,307) per MT for the quarter, higher by 12.0% (20.5% higher in INR terms) y-o-y and lower by 0.4% (3.0% higher in INR terms) sequentially. H1 FY23 COP was US$ 1,260 (INR 98,748) per MT an increase of 14.9% (21.9% higher in INR terms) y-o-y. The COP was affected largely on account of higher coal prices, lower domestic coal (linkage) availability, input commodity inflation being partially offset by higher volumes & improved operational efficiencies.
EBITDA for the quarter was INR 4,387 Crore, up 31.7% y-o-y and down 16.9% sequentially, primarily due to higher revenues being partially offset by increased costs owning to the input commodity inflationary environment. H1 FY23 EBITDA was INR 9,665 Crore, up 40.3% y-o-y, driven by improved metal and silver volumes, zinc prices, gain from strategic hedging and favourable exchange rates partly offset by higher costs and lower lead & silver prices.
Net profit for the quarter was at INR 2,680 Crore, up 32.9% y-o-y on account of higher zinc volumes & prices, gain from strategic hedging, and favourable exchange rates while being partially offset by the rising input commodity prices and lower lead and silver prices. Sequentially Net Profit for the quarter was 13.3% lower on account of lower metal production and lower zinc & silver prices being partially offset by strategic hedging gains and favourable exchange rates. H1 FY23 Net Profit was at INR 5,772 Crore, up 44.3% y-o-y led by higher EBITDA partly offset by increase in Tax and depreciation & amortisation.
Projects Update
- For Hindustan Zinc Alloys Private Limited (HZAPL) all orders have been placed and civil jobs are in advanced stage at the site. We expect the commissioning to be completed by Q4 FY23.
- Rajpura Dariba Mill civil construction is in advance stage & Mechanical and E&I works have already started and commissioning is expected to be completed by early Q4 FY’23.
- For the Fumer commissioning, NFC team arrived at site and cold commissioning of the equipment was completed. Few experts team is already at site & further visa process for few of the OEM & NFC experts is under advanced stage. We expect Fumer commissioning to be completed by end of Q3 FY23.
- A wholly owned subsidiary ‘Hindustan Zinc Fertilisers Private Limited’ was formed during Q2FY23 in line with the board approval received last quarter.
ESG Update
- HZL confirms its COP 27- Business leader working group participation
- In line with our 2050 net zero goal, we have signed a Power Delivery Agreement (PDA) for sourcing 200 MW renewable energy, which will avoid 1.2 million MT of carbon emission
- Pantnagar Metal Plant becomes the first unit of Vedanta to source 100% green power supply
- Dariba Smelting Complex is awarded with Five Star Grading by British Safety Council Occupational Health and Safety Audit.
- Hindustan Zinc’s Triple Sweep at GreenCo Summit 2022- Dariba Smelting Complex (Gold rating), Chanderiya Lead Zinc Smelter (Gold rating), Debari Zinc Smelter (Silver Rating)
- Procured 2 UG BEVs at SK Mines from Normet (Charmec, Agitator)
Liquidity and Investment
As on September 30, 2022, the Company’s gross investments and cash & cash equivalents were INR 17,807 Crore as compared to INR 24,254 Crore at the end of June’22. The Company’s net investments as at end of September 30, 2022, was INR 15,696 Crore as compared to INR 21,439 Crore at end of June’22.
During the quarter, the company paid dividend of INR 8,873 Crore and long-term debt repayment (scheduled for Non-Convertible Debentures) of INR 704 Crore.
Outlook for FY23
We would like to reiterate our guidance on volume and capex for FY23.
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.
The project capex for the year is expected to be in the range of US$ 125-150 million.
In the previous quarter, management had cautioned against risk to cost guidance from rising input commodity prices. In light of the same, we would like to revise our cost guidance upwards.
Zinc cost of production in FY23 is expected to be in between US$ 1,225-1,275 per MT.
Earnings Call on Friday, October 21, 2022, at 15:45 hours (IST)
The Company will hold an earnings conference call on Friday, October 21, 2022, at 15:45 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
October 21 – October 28, 2022 Playback Code: 39148
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.
LLearn more about Hindustan Zinc on – https://www.hzlindia.com/home/ and follow us on LinkedIn, Twitter, Facebook, and Instagram for more updates.
