Hindustan Zinc Q2 results: Reports 7% drop in net profit, declares interim dividend of Rs 21.3 per share

 

Source: Economic times

Hindustan Zinc NSE 0.88 % has reported a 7 per cent year-on-year drop in consolidated net profit at Rs 1,940 crore for the second quarter of the financial year 2021, as against Rs 2,081 crore during the same quarter last year, mainly on account of higher depreciation and finance costs, the company said. The company’s net profit however on a quarter-on-quarter basis rose by 43 per cent with June quarter net profit at Rs 1,359 crore. “On the back of streamlined operations, we continue to deliver record volumes despite challenges posed by the pandemic. We are setting up Hindustan Zinc for its next phase of growth,” said the company's chief executive officer, Arun Misra.

The company while announcing the results also declared an interim dividend of Rs 21.30 per share amounting to Rs 9000 crore, i.e. 1065 per cent on face value of Rs. 2 per share for the financial year 2020-21. “The record date for the purpose of determining the eligibility for payment of interim dividend will be Wednesday, October 28, 2020. The interim dividend will be paid within the stipulated timelines as prescribed under law,” the company said. Company’s mined metal production for the September quarter was up 9 per cent YoY to 238 kilo tonne (kt) and integrated metal production was at 237 kt up 13 per cent YoY on account of higher ore production, the production grew by 18 per cent on a quarterly basis. However, the company said that the increase was partly offset by decline in metal grades and lesser ore treatment. “Mined metal production is up mainly due to higher ore production, better mine planning and effective targeting with increased use of technology,” the company said in a statement. 

 

Company’s integrated zinc production was up 9 per cent YoY at 180 kt, while lead production was up 29 per cent YoY at 57 kt. Integrated silver production was up by 51 per cent at 203 mt. HNZ’s revenue from operations during the quarter was at Rs 5,660 crore, an increase of 25 per cent YoY primarily led by higher metal volumes, higher silver prices, the company said. Earnings before interest, tax, depreciation and amortization for the quarter was at Rs 2,952 crore up 39 per cent YoY, on account of lower operating costs. During the quarter under review, zinc cost of production was at Rs 68,228 per million tonne which was lower by 12 per cent YoY. “The cost of production benefited from a number of cost reduction initiatives yielding results, further supported by decline in coal, met coke and cement prices,” the company said in a statement.

For the whole year FY21, the company has said that the mine metal and finished metal production will be at 925-950 kt, while saleable silver production will be at 650 mt. “We also guided the Zinc cost of production to remain below $1000 per million tonne (Rs 73,445) and project capex to remain between $ 100 million and $140 million (Rs 734-Rs1028 crore),” the company said in a statement on Tuesday. HNZ's net cash at the end of September 2020 was at Rs 17,833 crore as against Rs 15, 480 crore a year ago, the company said, adding that it has raised Rs 5,020 crore through issuance of non-convertible debentures and a term loan.

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