Hindustan Zinc Q2 net profit rises 4 pc to Rs 2,017 cr

We believe that with operational challenges behind us, we have reset the system for a robust delivery in future. The firm said that it remains committed to protecting its margins, generate robust free cash flow and invest in sustainability.

Driven by recovery in metal prices and lower effective tax sequentially, Vedanta group firm Hindustan Zinc Ltd (HZL) on Friday reported a 3.9 per cent rise in its net profit to Rs 2,017 crore for the quarter ended September 30.

The company had posted a net profit of Rs 1,940 crore in the year-ago period, Hindustan Zinc Ltd said in a regulatory filing.

The revenue from operations in July-September 2021 increased to Rs 5,958 crore, from Rs 5,533 crore in the year-ago period, the filing said.

Its total expenses during the quarter increased to Rs 3,571 crore, as against Rs 3,428 crore in the year-ago period.

The company's CEO Arun Misra told PTI: ''About 25,000-30,000 tonnes of production we lost because of standard shutdown has contributed to lesser profitability in the quarter or less increase in profitability compared to the same time last year.'' Misra added that on the input side, there has been a cost increase and that has also impacted its cost and, hence, the profitability.

Its revenue from operations during July-September 2021 stood at Rs 6,122 crore, an eight per cent y-o-y jump, led by higher zinc and lead LME prices and higher premiums as well as higher silver prices partly offset by lower metal and silver volumes.

Over the year, zinc and lead LME prices were up 28 per cent and 25 per cent respectively, HZL said.

Total ore production for the quarter was up 2.6 per cent y-o-y to 3.99 million tonnes, led by strong growth in Zawar and Sindesar Khurd mines partially offset by lower production at Kayad and Rajpura Dariba mines.

Total metal-in-concentrate production for the quarter at 2,48,000 tonnes, up 4.4 per cent y-o-y on account of higher ore treatment at Rampura Agucha, Zawar and Rajpura Dariba mines, supported by improvement in recovery that has been partly offset by lower grades.

Integrated metal production was 2,09,000 tonnes for the quarter, down 12 per cent as compared to both Q2 FY21 and Q1 FY22, on account of extended shutdown at one of the roasters at Chanderiya smelter for repairs and overhaul of structural components.

COVID-19 restrictions, including stringent visa guidelines for Chinese nationals, continued during the quarter that resulted in a delay in the commissioning of the Fumer plant at Chanderiya. ''All efforts are in place and we expect Fumer commissioning to be completed by end of FY'22,'' Misra.

As on September 30, 2021, the company's gross investments as well as cash and cash equivalents were Rs 23,662 crore as compared with Rs 23,902 crore at the end of June 30, 2021.

The company's net investments at the end of September 30, 2021, stood at Rs 19,103 crore, compared with Rs 17,249 crore at the end of June 30 and was invested in high-quality debt instruments.

The revenue from operations in the July-September 2021 quarter increased to Rs 5,958 crore, from Rs 5,533 crore in the year-ago period, the filing said.

Its total expenses during the quarter increased to Rs 3,571 crore, against Rs 3,428 crore in the year-ago period.

Misra said, ''We delivered record high H1 mined metal production and mine development since transition to underground mining operations.'' With effective systems and planning, teams at Hindustan Zinc have strengthened the backbone of the company's operations, setting the stage right for it to deliver one million production mark, he added.

The company, he said, is progressing well on its environmental, social and governance (ESG) journey and has committed to net-zero emissions by 2050.

Hindustan Zinc has also joined the taskforce on nature-related financial disclosures to tackle nature-related risks proactively, he said adding that ''we are proud and look forward to participating in British High Commission Conference of the Parties (COP26)''.

The company's interim CFO Sandeep Modi said, ''We delivered the ever-highest H1 Ebitda, despite operational challenges and external headwinds from the ongoing global energy crisis. We believe that with operational challenges behind us, we have reset the system for a robust delivery in future.'' The firm said that it remains committed to protecting its margins, generate robust free cash flow and invest in sustainability. All of this together will help HZL to create and deliver long-lasting value for its shareholders.

HZL further said the board in its meeting constituted a sustainability and ESG committee at the board level to ensure the board oversight and provide strategic direction to the company on ESG matters.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)