Hindustan Zinc’s mined metal and finished metal production in FY2021 is expected to surpass production in FY2020 and will be around 925,000-950,000mt, according to the company’s Q1 earnings reports. Cost of production of zinc in FY21 is likely to remain below $1,000/mt.
Total mined metal in the June quarter was down 5pc at 202,000mt from the prior year and down 19pc from the previous quarter. The decline is a result of fewer production days in April followed by a reduction in the workforce on accounts of COVID-19 restrictions. Integrated zinc production declined by 8pc to 157,000mt from the prior year and 9pc lower from the previous quarter. Lead production dipped by 7pc to 44,000mt in Q1 from the year prior and declined 10pc from Q4.
Revenues from operations stood at Rs3,989 crore ($533mn) down by 20pc from the prior year and 9pc from the previous quarter. Hindustan Zinc’s revenues from operations were affected by a 29pc decline in LME zinc prices from the prior year and 8pc from the previous quarter resulting in lower zinc prices. Similarly LME lead also fell by 11pc from the prior year and 9pc from the prior quarter. This was coupled with lower metal premium and the impact of COVID-19 resulting in lower lead volumes. Operational profit stood at Rs1,599 crore, down by 36pc from the prior year and 18pc from Q4 on accounts of lower revenues. Net profit in Q1 fell by 23pc and stood at Rs1,359 crore.
For FY2021, Hindustan Zinc has a project capex of around $100-140mn.
The company promoted Deputy CEO Arun Misra as CEO of Hindustan Zinc, effective August 2020. The move follows the elevation of Sunil Duggal as Group CEO, Vedanta Limited.