Hindustan Zinc Q2 PAT falls 7% to Rs 1940 cr

The net profit of Hindustan Zinc declined 6.8% to Rs 1940 crore on 24% rise in net sales to Rs 5533 crore in Q2 September 2020 over Q2 September 2019.

The company said that the increase in revenue was led by higher metal volumes, higher silver prices aided by rupee depreciation partly offset by lower zinc & lead LME prices. Net profit declined year-on-year due to higher depreciation & amortisation, finance cost and higher tax rate due to change in income mix.

EBITDA for the quarter was Rs 2,952 crore, up 39% year-on-year and 85% sequentially on account of higher revenue and lower operating costs.

Profit before tax in Q2 September 2020 stood at Rs 2622 crore, up by 25.6% from Rs 2087 crore in Q2 September 2019. Current tax expense jumped 74.9% year-on-year (YoY) to Rs 453 crore during the quarter.

The company's net cash and cash equivalents as at end of September 2020 was Rs 17,833 crore as compared to Rs 15,480 crore at the end of the first quarter (June 2020) and was invested in high quality debt instruments and fixed deposits.

The company's board approved an interim dividend of Rs 21.30 per share for the financial year 2020-21 amounting to Rs 9,000 crore.

Commenting on the results, company's CEO Arun Misra said, "On the back of streamlined operations, we continue to deliver record volumes despite the challenges posed by the pandemic. We are setting up Hindustan Zinc for its next phase of growth and are confident to deliver superior value to our stakeholders in a sustainable manner."

Swayam Saurabh, the company's CFO, said: Our operational discipline and focussed cost optimisation programmes leveraging technology & digitalisation are driving our cost lower and is evident in our financial performance. Our unwavering focus to invest in high IRR projects and strong cash conversion discipline is enabling us to stay ahead of the curve and deliver industry leading returns

In its outlook, the company said: "We previously guided to achieve mined metal and finished metal production of 925-950 KT each and saleable silver production of c.650 MT in FY21. We also guided zinc cost of production to remain below $1,000 per MT and project capex between $100 million and $140 million for the year. We remain on track to achieve the above guided numbers for FY21."

Hindustan Zinc is an integrated producer of zinc, lead and silver.

The scrip rose 2.94% to Rs 229.50 on the BSE. It traded in the range of 227.50 and 232.25 so far during the day.

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