Hindustan Zinc Limited; Results for the Third Quarter and Nine Months Ended 31 December 2012

  Hindustan Zinc Limited; Results for the Third Quarter and Nine Months Ended
  31 December 2012

  Next phase of growth announced; Record mined metal production; Net profit
                               increased by 27%

Q3 Highlights

Operational Performance -

  *Mined metal production up 11% at a record 233kt
  *Lead production up 11% at 32kt
  *Silver production up 103% at 117t

Financial Performance –

  *Revenue up 14% at Rs. 3,140 Crore
  *Net Profit up 27% at Rs. 1,613 Crore
  *Strong balance sheet with cash and cash equivalents of Rs. 19,282 Crore

Expansion Projects –

  *Board of Directors approves next phase of growth plan to increase mined
    metal production capacity to 1.2 mtpa

Business Wire

MUMBAI, India -- January 18, 2013

Hindustan Zinc Limited:

Mr. Agnivesh Agarwal (Chairman, Hindustan Zinc) – “I am pleased to announce
that the Board of Directors has approved the next phase of growth projects,
which will deliver superior performance in future and create long-term value
for stakeholders”.

Hindustan Zinc Limited (“HZL” or the “Company”) today announced its unaudited
results for the third quarter (“Q3”) and nine months (“nine months period”)
ended 31 December 2012.

Unaudited Financial Summary

                  (In Rs Crore, except as stated)
                   Quarter Ended                 Nine-month Ended
                    31st December                    31st December
                   2012    2011    Change    2012    2011   Change
Net Sales/Income                                                
from Operations
Zinc                 1,975     2,004     -1%          5,634     6,144   -8%
Lead                 371       308       20%          1,054     726     45%
Silver               645       257       151%         1,482     823     80%
Others               149       178       -16%         505       469     8%
Total                3,140     2,747     14%          8,675     8,162   6%
                                                                        
Cash Profit (Net
Profit +             1,790     1,436     25%          5,259     4,557   15%
Depreciation)
                                                                        
Profit After         1,613     1,274     27%          4,734     4,113   15%
Taxes
                                                                        
Earnings Per         3.82      3.01      27%          11.20     9.73    15%
Share (Rs.)
                                                                        
Production -
Mined Metal          233       209       11%          610       607     0%
('000 tonnes)
Zinc & Lead
                                                                        
Production -
Refined Metal
('000 tonnes)
Total Zinc           171       191       -10%         495       569     -13%
- Fully              168       188       -10%         479       563     -15%
integrated Zinc
Total Lead^1         32        29        11%          90        62      45%
- Fully              22        25        -11%         75        58      29%
integrated Lead
Total Silver^2       117       58        103%         290       154     89%
(tonnes)
- Fully
integrated           62        58        8%           222       154     44%
Silver
                                                                        
Metal Prices and
Exchange Rate
Zinc LME             1,947     1,897     3%           1,920     2,123   -10%
(USD/MT)
Lead LME             2,199     1,983     11%          2,051     2,328   -12%
(USD/MT)
Silver LBMA (USD     32.7      31.9      3%           30.7      36.2    -15%
/ oz)
INR / USD            54.1      51.0      6%           54.5      47.2    16%

(1) Includes captive consumption of 1,647 tonnes in Q3 FY2013 vs. 1,730 tonnes
in Q3 FY2012, and 4,723 tonnes in ‘nine months period’ FY2013 vs. 4,469 tonnes
in ‘nine months period’ FY2012.

(2) Includes captive consumption of 8,440 Kgs. in Q3 FY2013 vs. 9,182 Kgs. in
Q3 FY2012, and 24,606 Kgs. in ‘nine months period’ FY2013 vs. 23,572 Kgs. in
‘nine months period’ FY2012.

Operational Performance

Mined metal production in Q3 was up 11% at an all time high of 233kt, compared
with the corresponding prior quarter. This was 22% higher sequentially and we
expect to close the year ahead of last year’s production, in accordance with
our earlier guidance.

Refined Lead production in Q3 was 32kt up 11% and Refined Silver production
was 117t up 103%, as compared with the corresponding prior quarter. This was
mainly attributable to higher volume of custom production, as the mined metal
production improved progressively during the quarter.

Refined Zinc production in Q3 was down 10% at 171kt, as compared with the
corresponding prior quarter. It improved 5% on a sequential basis and we
expect higher volumes in Q4.

Financial Performance

Revenues for Q3 were up 14% at Rs. 3,140 Crore, compared with the
corresponding prior quarter. The increase was primarily due to higher
Lead-Silver volumes, further supported by improved LME/LBMA prices & INR
depreciation. Net profit for the quarter was higher by 27% at Rs. 1,613 Crore.

The Zinc metal cost, without royalty, during the quarter was Rs. 44,900 per MT
($829), 11% higher in INR and 6% in USD, compared with the corresponding prior
quarter. The positive impact of operational efficiencies and lower coal prices
was more than offset by increase in commodity prices, higher excavation &
lower by-product credits.

Expansion Projects

The Board of Directors has approved the next phase of growth plan. HZL has
been actively conducting exploration, which increased net Reserve and Resource
across all mines to 332.3 million tonnes in FY2012. Based on long-term
evaluation of assets and in consultation with mining experts, the Company has
finalised the next phase of growth plan, which will involve sinking of
underground shafts and developing underground mines. The plan comprises of
developing a 3.75 mtpa underground mine at Rampura Agucha and expanding
Sindesar Khurd mine from 2.0 mtpa to 3.75 mtpa, Zawar mines from 1.2 mtpa to
5.0 mtpa, Rajpura Dariba mine to 1.2 mtpa and Kayad mine to 1.0 mtpa. It will
also involve opening up of a small new mine at Bamnia Kalan in Rajpura Dariba
belt. The growth plan will increase mined metal (MIC) production capacity to
1.2 mtpa.

The mines will be developed using best-in-class technology and equipment and
in consultation with leading global mine experts, ensuring highest level of
productivity. The projects will be completed in six years and benefit of
growth projects will start flowing in from third year, even as projects will
continue till FY18-19. Annual capital expenditures for these projects will
average USD 250 million a year over next six years.

Liquidity and investment

Company follows conservative Investment Policy and invests in high quality
debt instruments. As on 31 December 2012, the Company had cash and cash
equivalents of Rs. 19,282 Crore, out of which Rs. 10,626 Crore was invested in
debt mutual funds, Rs. 1,712 in bonds and Rs. 6,923 Crore were in fixed
deposits with scheduled banks.

About Hindustan Zinc

HZL is one of the world’s largest integrated producers of Zinc-Lead and a
leading producer of Silver globally. It has a metal production capacity of
over one million tonnes per annum. HZL is focused on growth and long-term term
sustainability on the back of its high-quality assets, long mine life of over
25 years and low cost base. The Company is a subsidiary of the NYSE listed,
Sterlite Industries (India) Limited (NYSE: SLT) and London listed FTSE 100
diversified metals and mining major, Vedanta Resources plc.

Disclaimer

This press release contains “forward-looking statements” – that is, statements
related to future, not past, events. In this context, forward-looking
statements often address our expected future business and financial
performance, and often contain words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” “should” or “will.” Forward–looking
statements by their nature address matters that are, to different degrees,
uncertain. For us, uncertainties arise from the behavior of financial and
metals markets including the London Metal Exchange, fluctuations in interest
and or exchange rates and metal prices; from future integration of acquired
businesses; and from numerous other matters of national, regional and global
scale, including those of a political, economic, business, competitive or
regulatory nature. These uncertainties may cause our actual future results to
be materially different that those expressed in our forward-looking
statements. We do not undertake to update our forward-looking statements.

Contact:

Sterlite Industries (India) Limited
Ashwin Bajaj, +91 22 6646 1531
Senior Vice President
Investor Relations
sterlite.ir@vedanta.co.in
or
Hindustan Zinc Limited
Preeti Dubey, CFA, +91 22 6646 1531
General Manager
Investor Relations
hzl.ir@vedanta.co.in
or
Hindustan Zinc Limited
Neelam Sharma, +91 22 6646 1531
Manager
Investor Relations
hzl.ir@vedanta.co.in
 
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