Hindustan Zinc (500188) Q4 02/03 earnings summary

Executive summary

• FY03 turnover reached Rs 16,494.92 million; net profit rose to Rs 1,421.52 million from Rs 679.63 million despite lower average zinc prices.

• Higher production and sales, operational improvements and cost reductions supported profitability; recommended dividend was 8% of paid-up equity capital.

Financial highlights

• Gross turnover was Rs 16,494.92 million vs Rs 14,184.07 million in FY02; zinc ingots contributed Rs 12,667 million, or 76.79%.

• PBT was Rs 2,293.64 million vs Rs 1,041.10 million; PAT was Rs 1,421.52 million vs Rs 679.63 million.

• Operating profit was Rs 2,352.81 million vs Rs 1,043.15 million; interest expense fell to Rs 2.98 million from Rs 174.23 million.

• Income before interest, depreciation and tax was Rs 3,004.26 million vs Rs 1,881.01 million; gross profit was Rs 3,001.28 million vs Rs 1,706.78 million.

• EPS was Rs 3.36; turnover was Rs 17,255 million in the balance-sheet abstract, while the P&L reports turnover of Rs 16,494.92 million.

Outlook and guidance

• Global zinc demand was forecast to rise 3–4% annually over the next 2–3 years; Indian zinc and lead consumption was expected to grow ~7% annually during the IX and X plan periods.

• Indian zinc demand was projected to increase from 330,000 MT to ~465,000 MT by FY08; lead demand growth was linked to automobile and inverter markets.

• Chanderiya brownfield expansion includes a 170,000 MT zinc smelter, matching mining capacity and 150 MW captive power plant; completion was scheduled for early 2005.

• Production capacity expansion in phases was under consideration to meet domestic zinc and lead demand and support entry into overseas markets.