OREANDA-NEWS. Hindustan Zinc Limited announced its results for the third quarter ended December 31, 2014.

Mr. Agnivesh Agarwal, Chairman - "We continued to deliver solid performance in the third quarter. Zinc market fundamentals are favourable and we remain committed to increasing production and controlling costs to drive profitability of our operations. Looking ahead, we believe that opportunities lie in our ability to execute against our long-term strategic priorities, which will continue to differentiate Hindustan Zinc and drive shareholder value."

Operational Performance

Mined metal production in Q3 FY 2015 was up by 14% sequentially and 10% y-o-y at 242,417 MT, as compared with 212,575 MT in previous quarter and 220,126 MT a year ago. The increase was as per the mine plan and driven by higher production from Rampura Agucha mine and better ore grades. For nine month period, mined metal production was 618,123 MT as compared to 679,597 MT in FY 2014. The shortfall will be made up in Q4, in-line with the mine plan and guidance of marginal growth in mined metal for the full year.

Integrated refined zinc production was up by 11% sequentially on account of higher mined metal production. However, it was marginally down by 2% at 191,785 MT on y-o-y basis due to higher cathode stock, even as total refined zinc production was flat from a year ago.

Production of integrated refined lead was marginally down from previous quarter at 24,890 MT and flat from corresponding period of last year. Integrated saleable silver production was up 3% sequentially and down 4% y-o-y to 70 MT. The y-o-y decline was due to accretion to WIP even as the grades from Sindesar Khurd were higher. Integrated silver production in Q4 will be better than Q3 and full year production will be close to last year.

The zinc metal cost of production before royalty during the quarter was Rs. 50,534 (USD 817), which is lower by 8% (10% in USD terms) sequentially and 3% lower from a year ago. The y-o-y decrease in cost was due to higher mined metal production, lower diesel cost and higher acid credits, partly offset by lower linkage coal and increased employee expense on account of long-term wage agreement.

Financial Performance

Revenues were up 12% to Rs. 3,804 Crore in Q3 FY 2015 from a year ago. The increase was driven by higher zinc LME and lead & silver metal volumes, partly offset by lower silver price and refined zinc volume.

EBITDA was up by 14% to Rs. 2,089 Crore for the quarter as compared to previous year as a result of better revenues and lower cost of production. Net profit increased by 38% to Rs. 2,379 Crore in Q3 FY 2015 as compared Rs. 1,723 in corresponding prior quarter.