LONDON (Alliance News) - Vedanta Resources PLC on Monday said Hindustan Zinc Ltd reported a 12% lift to annual profit after tax in the 2018 financial year, despite particularly weak fourth-quarter results.
The mid-cap miner holds 65% of Hindustan Zinc through its wholly-owned subsidiary Vedanta Ltd. The Indian government owns the rest of Hindustan Zinc.
The metals and mining company said Hindustan Zinc reported earnings before interest, tax, depreciation and amortisation of INR123.8 billion or GBP1.35 billion in the year to the end of March, up 27% from INR97.3 billion the year before.
Profit after tax amounted to INR92.8 billion versus INR83.2 billion in the prior year.
Mined metal production over the 12-month period increased 4.0% to 947,000 tonnes from 907,000 tonnes. Meanwhile, refined metal production was even more positive, with refined zinc and lead production up 19% to 960,000 tonnes from 809,000 tonnes, while silver output rose 23% to 558 tonnes from 453 tonnes.
Wind power sales in the period were 8.0% lower than the previous year at 414.0 million units.
The cost of zinc production excluding royalties rose 14% in rupee terms year-on-year and rose 18% in dollar terms. London Metal Exchange prices for zinc and lead were 29% and 19% higher year-on-year, respectively.
However, price for silver dropped 5.0% to USD17 per ounce from USD18 per ounce.
Hindustan Zinc paid a second interim dividend of INR6 in March, and therefore has not recommended a final dividend for the year.
For the new financial year, Vedanta said Hindustan anticipates slightly higher mined metal and refined zinc-lead production, with silver output to total in the range of 650 metric tonnes and 700 tonnes.
Looking at Hindustan Zinc's fourth quarter results, the company reported a 6.0% quarter-on-quarter rise in revenue to INR62.8 billion, but said that was flat on a year-on-year basis.
Ebitda in the fourth quarter was down 3.0% to INR36.6 billion from INR37.7 billion year-on-year, but 12% higher quarter-on-quarter. Meanwhile profit after tax in the quarter was down 18% year-on-year to INR25.1 billion from INR30.6 billion, but 9.0% higher than the third quarter.
In terms of production, Hindustan Zinc produced 255,000 metric tonnes of mined metal in the fourth quarter, which is 18% less than 312,000 tonnes produced a year earlier, but 6.0% more than produced in the third quarter.
Production of refined zinc and lead was down just 1.0% year-on-year to 256,000 tonnes from 260,000 tonnes, but up 4.0% quarter-on-quarter. Silver output was up 22% year-on-year to 170 tonnes from 139 tonnes and 28% higher quarter-on-quarter. Also, wind power generation was down 23% year-on-year to 58.0 million units from 75.0 million units, but up 2.0% quarter-on-quarter.
"The financial year 2018 was marked by strong performance from all our underground mines and many benchmarks were set," said Chairman Agnivesh Agarwal. "We reached a new milestone this year with a complete transition to underground mining and are on track to reach 1.2 metric tonnes per annum mined metal capacity by 2020."
Vedanta shares were up 0.7% in London to 734.00 pence Monday afternoon.
