Hind Zinc Q1 net down 28.5% at Rs 848 cr

Hindustan Zinc has announced its first quarter results. The company's Q1 net profit was down by 28.5% at Rs 847.8 crore versus Rs 1185 crore while CNBC-TV18 estimated at Rs 882.9 crore. Its total income was down at Rs 1853 crore versus Rs 2266 crore and sales down by 16.6% at Rs 1643.66 crore from Rs 1970 crore while CNBC-TV18 estimated at Rs 1840.5 crore. Operating Profit was also down at Rs 977.7 crore from Rs 1436 crore and OPM declined at 59.4% versus 72.9%. Key Factors Zinc prices affected by the US sub-prime pain and depreciating rupee Zinc prices dropped by 43.9% YoY in Apr-June quarter, hence realisations remain subdued Other Income declined 22.5% at Rs 209.4cr Margins contract due to the decrease in average price realisations of zinc and lead Increase in total expenditure up 24.7% at Rs 665.95cr Staff cost increased 30.4% at Rs 84.74cr Depreciation increased 52.5% at Rs 68.6cr Tax at Rs 263.8 cr vs Rs 469 cr Expansion Plans: Chanderiya II hydro metallurgical smelter has been commissioned Full impact of increased volumes to come in by 2QFY09. HZL enhanced its zinc capacity by 88,000 tpa to 669,000 tpa in April 2008 (total zinc-lead capacity to 755,000tpa). Plans to increase zinc capacity by 210,000 tpa and lead by 100,000 tpa - taking the total to 1.07m tpa by 2010, together with additional mining and captive power capacities Total capex will be Rs 36 billion (USD 900m).