Hindustan Zinc Limited ("HZL"), the leading global integrated producer of zinc, lead and silver, reported its results for the first quarter ended June 30, 2024. The company recorded the highest-ever first quarter for mined and refined metal production. It is also on track for a four-year lowest production cost with an entry COP of $1,107/MT in Q1.
The Q1 EBITDA and PAT were up by 17 per cent and 19 per cent y-o-y respectively (highest in the last five quarters). Revenue from operations during the quarter was Rs 8,130 Crore, up 12 per cent y-o-y on account of better metal volume and metal & silver prices, further supported by a strong dollar and partly offset by lower silver volume. It is up by 8 per cent q-o-q on account of better metal and silver prices and favourable forex rates, partly offset by lower metal & silver volumes.
Zinc cost of production before royalty (COP) for the quarter stood at US$ 1,107 (Rs 92,375) per MT, lower by 7 per cent (lower by 6 per cent in Rs terms) y-o-y on account of softened coal and input commodity prices, better linkage coal availability and better mined metal grades, further supported by operational efficiencies year on year. It was up 5 per cent (up by 6 per cent in Rs terms) sequentially in line with volume and grade.
EBITDA for the quarter was Rs 3,946 Crore, up 17 per cent y-o-y and 8 per cent q-o-q in line with the revenue from operations and the cost of production.
Net profit for the quarter stood at Rs 2,345 crore, up 19 per cent y-o-y and 15 per cent sequentially due to higher EBITDA partly offset by higher tax expenses.
As part of strategic hedging, the company has sold forward 90 kt of zinc production for FY25.
Commenting on the performance, Arun Misra, CEO, said: "Hindustan Zinc has started the year on a strong note, recording the highest ever first quarter mined and refined metal production, leveraging strong metal prices during the quarter. It also gives me immense pleasure to inform you that we have expedited the commencement of our renewable energy power delivery with the receipt of the first flow of RE power from Serentica 180 MW solar project in May 2024. Further, we are set to accelerate our sustainability journey through contribution towards economic prosperity and environmental responsibility, and diversification by catering to high-end sectors responsibly with our strategic partnerships for utilising waste streams for extracting saleable products and supplying for next-generation nickel zinc batteries.
Further expanding our zinc product portfolio in the world, we have launched Asia's first low carbon ‘green' zinc, EcoZen, produced using renewable energy and certified by a renowned global sustainability consulting firm for its life cycle carbon footprint assessment. It boasts a carbon footprint of less than 1 tCO2e per tonne of Zinc produced, about 75 per cent lower than the global average. We strongly believe that we can create further value for the company by ensuring creation of separate verticals for the recycling and silver businesses in the coming days."
Sandeep Modi, CFO, said, "Ascertaining HZL's global cost leadership, we have further optimised the cost of production for the quarter at $1,107 per tonne, clocking a figure lower than last three financial years. With a holistic focus on operational cum financial excellence, we expanded the margins during the quarter, along with a commendable increase in the domestic primary zinc market share. I firmly believe that HZL has made its shareholders proud by providing c.133 per cent returns during the quarter, highest amongst the large Indian companies, by the virtue of its positioning as the largest integrated precious metal company, ESG leader and a company committed for energy transition metals."
