Hindustan Zinc (500188) Q4 06/07 earnings summary

Executive summary

• FY2006-07 delivered record results, driven by higher production, improved operating efficiency and stronger LME prices; total revenue was Rs. 8,791 crore and PAT Rs. 4,442 crore.

• Zinc and lead production expanded as new smelting capacity ramped up; the long-term mission remained one million tonnes of metal production by 2010.

Financial highlights

• Net sales rose 120% YoY to Rs. 8,560 crore; total revenue increased 119% to Rs. 8,791 crore.

• PBDIT increased 175% to Rs. 6,639 crore; PBT rose 190% to Rs. 6,454 crore; PAT grew 202% to Rs. 4,442 crore.

• Basic and diluted EPS rose to Rs. 105.12 from Rs. 34.85; reported net profit was Rs. 4,441.81 crore.

• Zinc and lead sales revenue reached Rs. 7,701 crore and Rs. 677 crore, respectively; higher volumes and metal prices supported growth.

Outlook and guidance

• Mission: produce one million tonnes of metal by 2010; Rampura Agucha mine capacity was targeted at 5 million tpa by early 2008.

• Zinc smelting capacity was planned to reach 671,000 tpa by 2008; Chanderiya Phase II smelter, 80-MW captive power and matching mine expansion were progressing for Q3 FY08 commissioning, ahead of schedule.

• Further 88,000 tpa zinc de-bottlenecking, an 80-MW power plant at Zawar and a Debari roaster were progressing on schedule.

• Another 110.4 MW of wind capacity was under implementation; together with 38.4 MW commissioned in March 2007, installed capacity was expected to reach 148.8 MW.