Hindustan Zinc (HZL) has maintained its production and cost guidance for FY2022 (ending March 31, 2022) after a better-than-expected Q1 FY2022 (ended June 30, 2021).
HZL noted that its mined and finished metal guidance for FY2022 remained at 1.02-1.05mn mt and that it expected the cost of production for zinc to stay below $1,000/mt.
However, it is keeping a close watch on rising commodity prices. Vinaya Jain, senior vice-president, and head, finance, said that the increase in raw material costs could pose a challenge in the near term and that HZL was planning to mitigate these headwinds through structural cost initiatives.
On Thursday, the Indian zinc and silver miner said that it was able to keep its production pace during the quarter under review despite lockdowns across India due to the second wave of the COVID-19 pandemic. HZL’s zinc production increased by 20pc to 188,000mt in Q1 FY2022 against 157,000mt in the same quarter of the previous fiscal. However, the output dropped by 4pc from 198,000mt produced in Q4 FY2021.
HZL’s sales in the first quarter increased annually but saw a quarterly decline due to the recent pandemic-related lockdowns. Refined zinc sales in the first quarter increased by 15pc to 187,000mt from 163,000mt in Q1 FY2021 and were down 5pc from 198,000mt in Q4 FY2021. Refined lead sales climbed by 9pc to 49,000mt from 45,000mt during the annual period under comparison, but fell by 21pc from 62,000mt in Q4 FY2021.
The company’s consolidated sales increased by 64pc to Rs65.31bn ($877mn) in Q1 FY2022 from Rs39.89bn in the same quarter last year but dropped by 6pc from Rs69.47bn in the previous quarter. Of this total, revenue from zinc sales rose by 67pc to Rs42.91bn in Q1 FY2022 from Rs25.62bn in Q1 FY2021 and decreased by 1pc from Rs42.41bn in Q4 FY2021. Lead sales rose by 37pc in Q1 to Rs8.26bn on an annual basis but fell by 17pc from Rs9.99bn in the previous quarter.
In Q1 FY 2022, HZL reported a net profit of Rs19.83bn a 46pc increase from Rs13.59bn in the same quarter last year, though it dropped by 20pc from Rs24.81bn in the previous quarter.