Hindustan Zinc reported a 35 per cent year-on-year (Y-o-Y) dip in net profit for the quarter ended September 2023 (Q2FY24) as London Metal Exchange (LME) prices came under pressure.
The company’s metal production and revenues also took a dip on a Y-o-Y basis.
For Q2FY24, Hindustan Zinc’s net profit was at Rs 1,729 crore. Sequentially, net profit dipped 12 per cent.
Revenues for the company in the quarter under review were at Rs 6,619 crore, down 18.6 per cent. Other income for the quarter also declined 39.2 per cent to Rs 223 crore.
“Revenue from operations during the quarter was down on account of significantly lower zinc prices, lower zinc and silver volumes and differential strategic hedging impact partly offset by higher lead and silver prices and favourable exchange rates,” the company said in its statement.
In an interaction with Business Standard, Arun Misra, chief executive officer of Hindustan Zinc, said LME prices were under pressure over weakness in demand in other foreign economies.
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“India’s zinc demand remains robust and positive. Global zinc prices look subdued even if they stabilise at the current rates it is good for the company.”
Refined zinc production for the quarter, the company said, was 185,000 tonnes, down 2 per cent from a year ago.
Lead production remained flat at 57,000 tonnes and saleable silver was down 7 per cent Y-o-Y.
Earnings before interest, taxation, depreciation and amortisation (Ebitda) for the quarter, the company said, were at Rs 3,122 crore, down 28.8 per cent Y-o-Y.
In its results disclosure, Hindustan Zinc said it had created a 100 per cent pledge of its stake in one of the group subsidiaries as part of a financial closure process.
The company had earlier entered into a power delivery agreement (PDA) with Serentica Renewables India 4 Pvt Ltd (SRIPL 4), which is a subsidiary of Serentica Renewables India Pvt Ltd, under the captive scheme for delivering round-the-clock renewable power.
“For financial closure of the project, pledge of 100 percent equity shares of the SRIPL 4 has to be provided as security to the External Commercial Borrowing (ECB) lenders of SRIPL 4,” the company said.
On separating businesses into various entities, Misra said an independent report was expected in four to six weeks. Misra said the company has appointed an independent agency to study the proposal. On the government's nod for the separation of the businesses, Misra added the government is on board to study the proposal through the independent report.
In September, Hindustan Zinc’s board authorised the “committee of directors” to evaluate and recommend options and alternatives for creating separate legal entities for undertaking the zinc, lead and silver and recycling business.
On expected auctions of the exploration and mining of atomic minerals such as lithium and cobalt, Misra said the company would be interested in them.