HINDUSTAN ZINC LTD - RESULTS FOR - Q2 FY 2013 - SEP 2012 - NET SALES UP 9%; NET PROFIT UP 15% YoY

Hindustan Zinc Limited

Results for the Second Quarter

Ended 30 September 2012

Hindustan  Zinc Limited announced  results for the  second quarter (“Q2”) and Half Year ended 30 September 2012.

Q2 HIGHLIGHTS

Operational

 Mined metal production in line with the mine plan

 Refined Lead production up by 60%

 Refined Silver production up by 86%

 Greenfield Kayar mine strikes developmental ore, ahead of schedule

Financial Performance

 Net Revenue up 9% to Rs. 2,822 Crore

 Net Profit up 15% to Rs. 1,540 Crore

Interim Dividend

 Interim dividend of Rs 1.60 per share

 “Our results show our ability to deliver consistent performance from our best-in-class assets. We will continue our growth story in future and maintain our cost leadership to deliver industry leading performance”, said Mr. Agnivesh Agarwal, Chairman of Hindustan Zinc.

Unaudited Financial Summary

Hindustan Zinc	Q2 FY 13	Q1 FY13	%Dif QoQ	Q2 FY12	%Dif YoY
Net Sales	2822.3	2712.67	4.04	2593.49	8.82
Other Optg Income	43.16	35.04	23.17	43.35	-0.44
Total Income	2865.46	2747.71	4.29	2636.84	8.67
Total Expenses	1596.93	1255.18	27.23	1294.46	23.37
Profit from Operations	1268.53	1255.18	1.06	1294.46	-2
Other Income	539.76	574.3	-6.01	408.73	32.06
Finance Costs	-2.09	12.88	-116.23	9.16	-122.82
Exceptional (VRS) costs				23.86
Profit Before Tax	1810.38	1816.6	-0.34	1670.17	8.39
Tax Expense	270.39	235.26	14.93	325.48	-16.93
Net Profit	1539.79	1581.34	-2.63	1344.69	14.51
Paid Up equity	845.06	845.06	0	845.06	0
Basic EPS(FV:Rs.2)	3.64	3.74	-2.67	3.18	14.47
Public Holding(%)	35.08	35.08	0	35.08	0

Operational Performance Mined metal production during H1 is in line with our mine plan. The production is expected to progressively increase during Q3 and Q4, such that H2 should more than make up the H1 shortfall. We expect the mined metal production for the full year to be slightly higher than the previous year. Mined metal production was 190kt in Q2 and 377kt in H1, as compared with 210kt and 398kt in the corresponding prior periods. In line with the mined metal production, integrated production of refined zinc was 153kt in Q2 and 310kt in H1. Integrated production of refined lead was 24kt in Q2 and 53kt in H1. Integrated refined Silver production was 80 tonnes in Q2 and 160 tonnes in H1, up 63% and 66% respectively, driven by the ramp-up of SK mine and Dariba lead smelter.

Financial Performance

Revenues (Net Sales) for H1 FY 13 were Rs. 5,535 Crore , up 2% compared to Hi1 FY 12.  

Net Sales    for Q2 FY 13 at Rs.2822.30 Cr is up by 4.04% from Q1 FY 13 (Rs.2712.67 Cr); and up by 8.82% from Q2 FY 12 (Rs.2593.49 Cr).

Total Expenditure for Q2 FY 13 stands at Rs.1596.93 Cr; up by  6.99% from Q1 FY 13 (Rs.  1492.53 Cr); and up by     21.21 % from Q2 FY 12 (Rs.1317.54 Cr).

Profit before Intt, Dep. & Taxes for Q2 FY 13 stands at Rs.1225.37 Cr; up by 0.43% from Q1 FY 13 (Rs.1220.14 Cr); and down by  -3.96 % from Q2 FY 12 (Rs.1275.95 Cr).

Net Profit  for Q2 FY 13 stands at Rs.1539.79 down by -2.63% from Q1 FY 13 (Rs.1581.34 Cr); and up by 14.51 % from Q2 FY 12 (Rs.1344.69 Cr).

Net profit was up 10% in H1 FY 13 at Rs. 3,121 Crore, compared to H1 FY 12.

During Q2 and H1 of FY2013, the positive impact of higher Lead-Silver volumes and Rupee depreciation was offset by lower zinc volumes, lower prices of Zinc, Lead and Silver. The Zinc COP, excluding royalty, during the quarter was Rs. 46,750 per MT ($844), compared to Rs 38,800 ($847) in the corresponding prior quarter. The increase was primarily on account of higher excavation cost and Rupee depreciation.

Basic EPS(FV:Rs.2) : Basic EPS in Q2 FY 13 was Rs.3.64; compared to Rs.3.74 in preceding Quarter of Q1 FY 13; and Rs.3.18 in Q2 FY 12, the corresponding quarter of previous year.

52 week high/low price : 154.00/106.45

CURRENT MP : Rs.134.35

Interim Dividend : Company has recommended an interim dividend of 80% i.e. Rs. 1.60 per share on equity share of Rs 2.00 each,  compared to an interim dividend of Rs 1.50 per share last year.

Expansion Projects At the greenfield Kayar mine, a milestone of development ore production was achieved towards the end of the quarter. Both Rampura Agucha and Kayar underground mines are progressing well and will start commercial production in FY 2014.

Liquidity and investment As at 30 September 2012, the Company had cash and cash equivalents of Rs. 19,136 Crore. This includes Rs. 10,177 Crore in debt mutual funds, Rs. 1,663 in bonds and Rs. 7,275 Crore in fixed deposits with banks. The Company follows a conservative investment policy and invests in high quality debt instruments. Our investment portfolio is rated “very good” by CRISIL – the highest rating.

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