Hindustan Zinc Q3 net profit rises &% to Rs 1,723 crore

KOLKATA: Hindustan Zinc (HZL) posted a 7% rise in net profit for the third quarter ended December 2013 at 1,723 crore led by higher production and sales and the rupee's depreciation. The company's revenues increased 9% to 3,410 crore in Q3.

In the nine-month period (April-Dec'13), HZL's net profit rose 6% to 5,023 crore as revenue rose 14% to 9,870 crore compared to previous corresponding period. The increase was driven by higher zinc sales volume and rupee depreciation, partially offset by lower silver and acid prices.

Mined metal production reached 2.2 lakh tonne (LT) in Q3, against 2.32 LT a year ago. For the nine month period, mined metal production went up to 6.79 LT as compared to 6.1 LT in the corresponding prior period, driven by higher production at Rampura Agucha and Zawar mines.

Integrated refined zinc production went up 17% to 1.96 LT in Q3 while it grew 18% to 5.64 LT in the nine-month period compared to corresponding prior periods, driven by improved operational efficiencies of HZL smelters. Sharing its outlook for FY14, HZL said, "We expect mined metal production of around 9 LT in FY14 reflecting slower than expected ramp-up of underground mining projects."

Integrated saleable silver production is projected to be in the range of 290 to 300 tonne in FY14."

Commenting on the company's results, Agnivesh Agarwal, chairman, HZL said, "We remain focused on driving growth while maintaining our cost leadership."

However, the company's results belied analysts' expectations. As Bhavesh Chauhan senior research analyst (Metals & Mining) at Angel Broking said: "HZL Q3FY14 net profit was slightly below our expectations. HZL's net revenue increased by 8.6% on a year-on-year (yoy) basis to 3,410 crore in line with our estimate of 3,446 crore mainly due to increased sales volumes, partially offset by decline in prices.