Hindustan Zinc Limited
8 min readResults for the Fourth Quarter and Full Year Ended March 31, 2021
“Quarterly PAT up 85% (YoY); Highest-ever annual silver production”
Highlights for the quarter
· Highest-ever UG Mined metal production: 288kt
· Highest-ever Refined metal production: 256kt
· Saleable silver production: 203 MT
· Best-everquarterly EBITDA,up 98% YoY
· Zinc COP: $945 per MT
Highlights for the year
· Highest-ever Mined metal production: 972kt
· Refined metal production: 930kt
· Highest Saleable silver production: 706 MT
· Lowest-ever[1]Zinc COP: $954 per MT
Udaipur,April 27, 2021: Hindustan Zinc Limited, the leading global integrated producer of zinc, lead and silver, reported its results for the fourth quarter and full year ended March 31, 2021.
Commenting on the Q4and FY performance, Mr Arun Misra, CEO, said: “We are conscious of the fact that our country is going through COVID Pandemic the scale of which has not been seen before. We are doing whatever we can including supplying liquid oxygen from our smelters to hospitals in and around Udaipur. We are proud to announce that we delivered record production volumes of mined metal, finished metal and silver production, while ensuring 22-months of fatality-free operations. I am also happy to inform that we exited the year at run-rate of 1.2mtpa. We also maintained our first rank in Asia pacific region in the metals & mining category in Dow jones Sustainability Index for third consecutive year and amongst India’s first companies to be rated ‘A’ in climate change CDP 2020.”
Financial Summary
INR.Crore or as stated
| Particulars | Q4 | Q3 | FY | |||||
| 2021 | 2020 | Change | 2021 | Change | 2021 | 2020 | Change | |
| Sales1 | ||||||||
| Zinc | 4,241 | 2,920 | 45% | 3,835 | 11% | 13,961 | 12,645 | 10% |
| Lead | 999 | 692 | 44% | 817 | 22% | 3,281 | 2,699 | 22% |
| Silver | 1,352 | 601 | 125% | 1,146 | 18% | 4,378 | 2,445 | 79% |
| Others | 355 | 178 | 99% | 235 | 51% | 1,009 | 772 | 31% |
| Total | 6,947 | 4,391 | 58% | 6,033 | 15% | 22,629 | 18,561 | 22% |
| EBITDA | 3,875 | 1,961 | 98% | 3,313 | 17% | 11,739 | 8,849 | 33% |
| Profit After Taxes | 2,481 | 1,339 | 85% | 2,200 | 13% | 7,980 | 6,805 | 17% |
| Earnings per Share | 5.87 | 3.17 | 85% | 5.21 | 13% | 18.89 | 16.11 | 17% |
| (INR, not annualised) | ||||||||
| Mined Metal Production (‘000 MT) | 288 | 249 | 15% | 244 | 18% | 972 | 917 | 6% |
| Refined Metal Production (‘000 MT) | ||||||||
| Total Refined Metal | ||||||||
| Zinc | 195 | 172 | 14% | 182 | 7% | 716 | 688 | 4% |
| Saleable Lead2 | 61 | 49 | 24% | 53 | 16% | 214 | 182 | 18% |
| Zinc & Lead | 256 | 221 | 16% | 235 | 9% | 930 | 870 | 7% |
| Saleable Silver3,4 (in MT) | 203 | 168 | 21% | 183 | 11% | 706 | 610 | 16% |
| Wind Power (in million units) | 65 | 71 | -8% | 61 | 7% | 351 | 437 | -20% |
| Zinc CoP without Royalty (INR/MT) | 68,969 | 72,220 | -5% | 69,744 | -1% | 70,681 | 74,172 | -5% |
| Zinc CoP without Royalty ($/MT) | 945 | 997 | -5% | 946 | 0% | 954 | 1,047 | -9% |
| Zinc LME ($ / MT) | 2,750 | 2,128 | 29% | 2,628 | 5% | 2,422 | 2,402 | 1% |
| Lead LME ($ / MT) | 2,018 | 1,847 | 9% | 1,901 | 6% | 1,868 | 1,952 | -4% |
| Silver LBMA ($ / oz.) | 26.3 | 16.9 | 55% | 24.4 | 8% | 22.9 | 16.5 | 38% |
| USD-INR (average) | 72.95 | 72.45 | 1% | 73.74 | -1% | 74.11 | 70.86 | 5% |
Operational Performance
Mined metal production for the quarter was up 15% y-o-y to 288kt on account of higher ore production, partly offset by lower overall grade. Sequentially, MIC production was up 18% on account of higher ore production and better overall grades. For the full year, MIC production was up 6% y-o-y to record 972 kt primarily on account of higher ore production partially offset by slightly lower grades. This was despite losing 18 days equivalent of production in the fiscal year 2021 due to lockdown and other workforce related restrictions to combat Covid-19.
Sequentially, mined metal production was up 18% mainly on account of improvement in ore grades across mines. For the full year, mined metal production was 972kt, up 6% y-o-y primarily on account of higher ore production.
Integrated metal production was 256kt for the quarter, up 16% y-o-y and up 9% sequentially in line with higher mined metal availability and higher closing MIC inventory. Integrated zinc production was 195kt, up14% y-o-y and 7% sequentially.Integrated lead production was 61 kt, up 24% y-o-y and 16% sequentially in line with higher mined metal availability.
Integrated silver production was 203 MT, up 21% from a year ago in line with higher lead production, partly offset by lower grades at Sindesar Khurd (SK) mine, while it was up 11% sequentially on account of higher lead production and better grades at SK.
For the full year, metal production was up7% to 930kt and silver production was up 16% to a record 706 MT in line with higher lead production and better silver grades at SK.
Financial Performance
Sequentially,revenue was up14%, primarily driven higher zinc, lead and silver prices, higher metal premium, partly offset by rupee appreciation. Zinc LME prices were sequentially up 5%, while lead prices were up 6%.For the full year, revenue was higher by 20% to INR22,071 on account of an average 38%increase in silver prices,highermetal & silver volumes, rupee depreciation partly offset by lower zinc premium.
Zinc cost of production before royalty (COP) during the quarter was $945 (Rs. 68,969) per MT, lower by 5% y-o-y, both in INR & USD terms and flat sequentially (down 1% in INR terms). The y-o-y decline in COP is primarily due to higher volume, lower power costs, higher sulphuric acid credits and lower cement costs partly offset by higher met coke and diesel costs.
For the full year, zinc COP excluding royalty was $954 (Rs. 70,681), lower by 9% y-o-y (5% lower in INR terms). The full year COP decrease reflects higher production volume, lower met coke and power costs, lower cement costs partly offset by higher diesel costs and Covid-related donation.
Overall, the COP for the quarter and FY benefitted from ongoing structural cost reduction initiatives partly offset by increase in mine development. Our steadfast focus on executing critical priorities on all fronts of consumption, contracting, procurement and fixed costs resulted in sustained reduction in costs.
EBITDA for the quarter soared toINR3,875Crore, up98% y-o-y and 17% sequentially on account of higher revenue, favourable pricing environment and well controlledoperating costs.EBITDA for the full year was at INR 11,739 Crore, up 33% from a year ago primarily on account of higher LME prices and lower costs.
Net profit for the quarter was INR2,481Crore, up85% y-o-y and 13% sequentially,driven by recovery in metal prices and strict cost discipline.For the full year, Net profit was INR 7,980Crore, up 17%, wherein higher EBITDA and lower D&A expense was partly offset by lower investment income due to lowering interest rate environment.
Outlook for FY22
FY2022 saleable silver production is expected to be higher and projected at c.720 MT.
Zinc cost of production in FY2022 is expected to remain below $1000 per MT.
The project capex for the year is expected to be approximately US$100 million.
Expansion Projects
During the quarter, Shaft Integration at Rampura Agucha Shaft was complete. This improved the accessibility of shaft section, alternate emergency evacuation, ease in mine equipment deployment at lower levels, face charging with emulsion explosives, face drilling with long feed jumbo.
Reserve & Resource (R&R)
Total ore reserves increased from 114.7 million tonnes at the end of FY 2020 to 150.3 million MT at the end of FY 2021 while mineral resources totalled 297.6 million MT. Total R&R increased to 448 million MT as we replenished more than we consumed during the year.
Total contained metal in ore reserves is 9.16 million MT of zinc, 2.55 million MT of lead and 295.5 million ounces of silver and the mineral resource contains 14.9 million MT of zinc, 6.3 million MT of lead and 618.7 million ounces of silver. At current mining rates, the R&R underpins metal production for more than 25 years.
Contribution to the exchequer
During the year, the Company contributed Rs. 15,008 Crore to the Government treasury through royalties and taxes, which is 66% of revenue.
Liquidityand investment
The Company’s net cash and cash equivalents as at end of March 31, 2021 was Rs.15,130 Crore as compared to Rs. 10,988 Crore at the end of the third quarter (Dec’20) and was invested in high quality debt instruments.
Earnings Call on Tuesday, April 27, 2021 at 4:00 pm (IST)
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The Company will hold an earnings conference call on Tuesday, April 22, 2021 at 4.00 pm IST, where senior management will discuss the Company’s results and performance.
Conference Dial-In Information:
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
Apr 27 – May 04, 2021 Playback Code: 53351
About Hindustan Zinc Limited
Hindustan Zinc (NSE & BSE: HINDZINC), a Vedanta Group Company, is one of the world’s largest and India’s only integrated producer of Zinc-Lead and Silver. The Company is headquartered in Udaipur, Rajasthan in India where it also has its mines and smelting complexes. It is self-sufficient in power with installed captive thermal power plants and green energy plants including wind and solar power.
Sustainability & innovation is at the core of Hindustan Zinc’s operations. The Company is ranked 1st in Asia-Pacific and 7th globally in the Dow Jones Sustainability Index 2020 in the metal & mining sector, is a certified water positive company, is a member of the FTSE4Good Index and also a part of the prestigious ‘A’ List by CDP for climate change.
As a socially responsible corporate, Hindustan Zinc is committed to enhancing the lives of local communities through its social programs. The company is amongst the Top 15 CSR Spenders in India and is currently reaching out to 500,000 people across 189 core villages in Rajasthan and Uttarakhand.
Learn more about Hindustan Zinc on – https://www.hzlindia.com/home/ and follow us on LinkedIn, Twitter, Facebook, and Instagram for more updates.
For further information please contact:
- Ms. Dipti Agrawal
Head – Corporate Communications
Hindustan Zinc Limited
- Ms. Shweta Arora
Head –Investor Relations
Hindustan Zinc Limited
Disclaimer
This press release contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future businesses and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should” or “will.” Forward–looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, London Bullion Metal Association, fluctuations in interest and/or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results and/or business operations to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements and investors should take their own decisions.
[1]Lowest ever Zinc CoP in dollar terms since transition to underground mining operations
Results for the Fourth Quarter and Full Year Ended March 31, 2021
