Hindustan Zinc Q2 net up 6.5% at Rs 1640 cr, margin expands

Moneycontrol Bureau

Hindustan Zinc's second quarter (July-September) net profit increased 6.5 percent year-on-year to Rs 1,640 crore and net sales jumped 24.7 percent to Rs 3,520 crore. This was driven by higher sales volume and rupee depreciation, partially offset by lower silver price, the company said.

According to a CNBC-TV18 poll, analysts on an average had expected net profit of Rs 1,675 crore on revenues of Rs 3,405 crore for the quarter.

Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 29.3 percent year-on-year to Rs 1,843.6 crore and EBITDA margin expanded by 154 basis points to 52.4 percent, beating analysts' forecast. Analysts had expected EBITDA at Rs 1,740 crore and margin at 51.1 percent for the quarter.

The positive impact of higher EBITDA was partly offset by lower other income due to mark-to-market losses on investments during the quarter.

Other income plunged nearly 49 percent on yearly basis to Rs 267 crore during September quarter, which also have an impact on profitability.

"We remain focused on sustainability of operations and are committed to increasing mining capacity and manufacturing cost efficieny," Agnivesh Agarwal, chairman said.

Mined metal production jumped 16.35 percent year-on-year to 2,21,646 million tonne during September quarter, driven by higher production at Rampura Agucha and restarting of Zawar mines.

Hindustan Zinc's Rampura Agucha underground mine project is operational via ramps and commercial production will ramp up during October-March FY14. The Kayad mine project will also commence commercial production in FY14, the company said.

Hindustan Zinc expects mined metal production of around 9,50,000 million tonne in FY14.

Integrated refined zinc production jumped 28 percent year-on-year to 1,94,814 million tonne, aided by improved operational efficiencies. Integrated saleable silver production rose 14 percent Y-o-Y to 83 million tonne during the quarter.

The company had cash and cash equivalents of Rs 23,632 crore as on September 2013.