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 email@example.com or Hindustan Zinc Limited Preeti Dubey, CFA, +91 22 6646 1531 General Manager Investor Relations firstname.lastname@example.org or Hindustan Zinc Limited Neelam Sharma, +91 22 6646 1531 Manager Investor Relations email@example.com
Hindustan Zinc Limited; Results for the Third Quarter and Nine Months Ended 31 December 2012
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