Hindustan Zinc announces the result for Q1 2014

Hindustan Zinc Limited announced its results for the Q1 ended June 30th 2014.

Operational Performance;
Mined metal production was 163,131 MT in Q1, as compared with 237,825 MT a year ago. The decrease is in line with our mine plan, which involves lower mined metal production on a YoY basis in the H1 of the year where we excavate more waste than ore. With higher production planned in second half, the transition to underground mining is progressing well. Integrated refined metal production of zinc and lead during the quarter was lower by 20% compared to a year ago, in line with mined metal production.

The zinc metal cost of production before royalty during the quarter was INR 60,093 which is 29% higher in Rupee and 20% higher in USD term from a year ago. The lower production volumes significantly impacted costs, accentuated by rupee depreciation, planned plant shutdowns and higher mine development.

Financial Performance;
Revenues were up 1% to INR 2,963 crore in Q1 FY 2015 as compared with the corresponding prior period. The increase was driven by higher zinc LME price & premium and rupee depreciation, offset by lower volumes. EBITDA decreased by 10% to INR 1,352 crore in Q1 FY 2015 due to lower production volumes and higher production cost. Net profit decreased by 3% to Rs. 1,618 crore in Q1 FY 2015. The impact of lower EBITDA was partly offset by strong other income during the quarter.

Expansion Projects;
During the quarter, total mine development increased by 15%. Rampura Agucha and Sindesar Khurd shaft projects are progressing well. India's first paste-fill plant is under commissioning at Rampura Agucha mine. Mine design and planning for further deepening of the pit at Rampura Agucha is under progress to explore extension of mine life.

Liquidity and investment;
As on June 30th 2014, the Company had cash and cash equivalents of INR 26,272 crore, out of which INR 22,172 crore was invested in mutual funds, INR 2,049 crore in bonds and INR 2,000 crore were in fixed deposits with banks. The Company follows a conservative investment policy and invests in high quality debt instruments.

Mr Agnivesh Agarwal chairman of Hindustan Zinc said that "Zinc prices are looking up as market sentiments are improving and metal balance remains favourable. Our expansion projects will enhance our market leadership and we are aggressively accelerating our mine development efforts to increase future production."