Hindustan Zinc (500188) Q4 04/05 earnings summary

Executive summary

• FY05 turnover Rs.24,408.01m; net profit Rs.6,553.34m, up from Rs.4,045.88m in FY04, supported by higher zinc sales volumes and improved metal and concentrate realizations.

• Record zinc metal sales of 266,586 MT maintained domestic leadership; expanded production capacity positioned output for expected growth in zinc and lead demand.

Financial highlights

• Gross turnover Rs.24,408.01m vs Rs.20,790.13m; sales net of excise Rs.21,868.01m vs Rs.18,414.94m.

• EBITDA Rs.10,177m vs Rs.6,603m; profit before tax Rs.9,269.19m vs Rs.5,847.33m.

• PAT Rs.6,553.34m vs Rs.4,045.88m; EPS Rs.15.51 vs Rs.9.58.

• Prior-year profit included Rs.2,108.87m voluntary retirement expense; excluding this exceptional item, FY04 PBT was Rs.7,956.20m.

Outlook and guidance

• Global zinc consumption forecast to grow 4.3% in 2005, with a projected 470,000 MT market deficit; domestic zinc demand expected to grow 9–10% annually.

• Global lead consumption forecast to grow 3%; Indian lead demand expected to expand 10–12% annually, driven by automotive batteries and related uses.

• 170,000 TPA zinc smelter commissioning and 154 MW captive power plant/mine expansion completed; smelter trial runs underway. 50,000 TPA lead project targeted for Q2 FY06 commissioning.