Hindustan Zinc (500188) Q4 98/99 earnings summary

Executive summary

• FY1998-99 delivered record zinc and lead metal and lead-zinc concentrate production; turnover rose 3.6% YoY, while pre-tax profit fell as lower zinc prices pressured realizations.

• Zinc sales reached a new peak, and higher volumes and Chanderiya utilization partly offset weaker metal prices.

Financial highlights

• Sales turnover was ₹1,309.27 crore, up 3.6% YoY; gross profit (PBID) was ₹225.65 crore versus ₹285.91 crore.

• PBT was ₹151.15 crore versus ₹201.77 crore; PAT rose to ₹76.32 crore from ₹73.77 crore, after tax provision of ₹74.83 crore.

• Interest expense fell to ₹15.24 crore from ₹26.74 crore; depreciation and amortisation increased to ₹58.75 crore from ₹57.16 crore.

• Sales in the accounts were ₹1,309.27 crore; net profit after tax was ₹76.32 crore, with ₹27.45 crore of net extraordinary and prior-period adjustments reducing pre-adjustment profit.

Outlook and guidance

• Base-metal price prospects for 1999 were described as less buoyant amid continued Japanese recession and slow Asian recovery, potentially pressuring the Indian zinc and lead market.

• The proposed 100,000 TPA zinc smelter, estimated at ₹1,132.34 crore, awaited government approvals; completion was expected within 48 months of approval.

• Debari and Vizag smelter expansions of 10,000 TPA each were expected to be completed by August 2000.

• Kayar prospect drilling began on 17 June 1999; the Sindesar Khurd replacement mine was planned for 1,000 TPD at an estimated cost of ₹92 crore.