Vedanta Resources : HZL announces Q1 FY2015 results

21 July 2014

Vedanta Resources plc
HZL announces Results for the First Quarter Ended 30 June 2014

July 21, 2014

Hindustan Zinc Limited

Results for the First Quarter Ended June 30, 2014

Hindustan Zinc Limited today announced its results for the first quarter ended June 30, 2014.

Mr. Agnivesh Agarwal (Chairman, Hindustan Zinc) - "Zinc prices are looking up as market sentiments are improving and metal balance remains favourable. Our expansion projects will enhance our market leadership and we are aggressively accelerating our mine development efforts to increase future production."

(In Rs. Crore, except as stated )

(1)  Excluding captive consumption of 1,689 MT in Q1 FY 2015, as compared with 1,644 MT in corresponding prior period.

(2)  Excluding captive consumption of 8,777 MT in Q1 FY 2015, as compared with 8,844 MT in corresponding prior period.                  

(3)  Silver occurs in Lead & Zinc ore and is recovered in the smelting and silver-refining processes

Mined metal production was 163,131 MT in Q1, as compared with 237,825 MT a year ago. The decrease is in-line with our mine plan, which involves lower mined metal production on a year-on-year basis in the first half of the year where we excavate more waste than ore. With higher production planned in second half, the transition to underground mining is progressing well.

Integrated refined metal production of zinc-lead during the quarter was lower by ~20% compared to a year ago, in-line with mined metal production.

The zinc metal cost of production before royalty during the quarter was Rs. 60,093 ($1,005), which is 29% higher in Rupee and 20% higher in USD term from a year ago. The lower production volumes significantly impacted costs, accentuated by rupee depreciation, planned plant shutdowns and higher mine development.

Revenues were up 1% to Rs. 2,963 crore in Q1 FY 2015 as compared with the corresponding prior period. The increase was driven by higher zinc LME price & premium and rupee depreciation, offset by lower volumes.

EBITDA decreased by 10% to Rs. 1,352 crore in Q1 FY 2015 due to lower production volumes and higher production cost.

Net profit decreased by 3% to Rs. 1,618 crore in Q1 FY 2015. The impact of lower EBITDA was partly offset by strong other income during the quarter.

During the quarter, total mine development increased by 15%. Rampura Agucha and Sindesar Khurd shaft projects are progressing well. India's first paste-fill plant is under commissioning at Rampura Agucha mine. Mine design and planning for further deepening of the pit at Rampura Agucha is under progress to explore extension of mine life.

As on June 30, 2014, the Company had cash and cash equivalents of Rs. 26,272 crore, out of which Rs. 22,172 crore was invested in mutual funds, Rs. 2,049 crore in bonds and Rs 2,000 crore were in fixed deposits with banks. The Company follows a conservative investment policy and invests in high quality debt instruments.

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About Vedanta Resources plc

Vedanta Resources plc ("Vedanta") is a London listed diversified global resources major. The group produces Aluminium, Copper, Zinc, Lead, Silver, Iron ore, Power, and Oil and Gas. Vedanta has world-class assets in India, Zambia, South Africa, Namibia, Ireland Liberia, Australia and Sri Lanka and a strong organic growth pipeline of projects. With an empowered talent pool globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. For more information, please visit: www.vedantaresources.com.

Disclaimer

This press release contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.