Hindustan Zinc, a Vedanta Group company, reported 17 per cent increase in the December quarter net profit at Rs 1,723 crore (Rs 1,613 crore) on the back of higher production.
Net sales realisation was up nine per cent at Rs 3,410 crore (Rs 3,140 crore).
Despite mined metal production dipping to 220,126 tonnes (232,926 tonnes) in the December quarter, refined zinc output was up 17 per cent to 196,478 tonnes, while lead output increased 21 per cent to 24,984 tonnes due to better operational efficiency. Silver production moved up 35 per cent to 72 tonnes in the third quarter. Integrated saleable silver production is projected to be in the range of 290-300 tonne this fiscal, while it achieved 18 per cent jump to 233 tonnes in the first three quarters of FY-14, said the company.
Total expenses were down one per cent at Rs 1,836 crore (Rs 1,857 crore) as the cost of raw material consumed dipped sharply to Rs 23 crore from Rs 306 crore last year.
Last year, the raw material cost was higher as the company imported zinc and lead concentrate for custom smelting (processes concentrates from other independent mines), said a company official.
The zinc production cost before royalty in the quarter was at Rs 52,014 ($840), up 16 per cent in rupee term from a year ago. The increase in rupee costs was largely due to lower by-product sulphuric acid prices, higher diesel costs and rupee depreciation.
EBITDA (earnings before interest, tax, depreciation and amortisation) at Rs 1,828 crore was up 21 per cent driven by higher integrated sales volume and rupee depreciation.
Bhavesh Chauhan, Senior Research Analyst, Angel Broking, said the fall in zinc (-2 per cent), lead (-4 per cent) and silver (-36 per cent) prices was partially offset by 15 per cent rupee depreciation against the dollar. “The company has lowered its FY2014 zinc production guidance to 900,000 tonnes from 950,000 tonnes due to slower-than-expected ramp up in production from underground mine,” he said.
As of December quarter, the company has cash and cash equivalents reserves of Rs 24,095 crore.
The company’s shares were down 0.77 per cent at Rs 129 on Friday.