Hindustan Zinc reports record silver and metal production in FY24 despite market challenges

Hindustan Zinc Limited (HZL), a global leader in zinc, lead, and silver production, headquartered in Udaipur, has disclosed its financial and operational performance for the fourth quarter and the full fiscal year ended March 31, 2024. The company celebrated a year of record metal and silver production, underpinned by significant cost resilience, despite facing downward pressures on zinc prices.

Key figures about Hindustan Zinc Limited’s FY24 performance:

Annual Metal Production

• Achieved highest-ever annual production levels for mined metal, refined metal, and silver.
  Mined Metal: Full year production reached 1,079 kilotonnes, up 2% year-over-year.
  Refined Metal: Annual production was 1,033 kilotonnes, marking a year-over-year increase.
  Silver Production: Full year production was 746 metric tonnes, up 5% year-over-year.

Financial Performance:

• Quarterly Revenue: Increased by 3% quarter-over-quarter.
• Annual Revenue: INR 28,932 Crore, down 15% year-over-year.
• Quarterly EBITDA: Increased by 2% quarter-over-quarter.
• Annual EBITDA: INR 13,677 Crore, down 22% year-over-year.
• Net Profit: For the full year, net profit was INR 7,759 Crore, a decrease of 26% year-over-year.

Cost of Production:

Annual Cost of Production (COP): Zinc COP was US$ 1,117 per metric ton, showing an 11% year-over-year decrease.

Production Volumes:

• Quarterly Refined Metal: Highest-ever for Q4 at 273 kilotonnes, up 6% sequentially.
• Quarterly Refined Zinc Production: 220 kilotonnes, up 9% sequentially.
• Quarterly Refined Lead Production: 53 kilotonnes, down 5% sequentially.

Silver and Lead Production:

Quarterly Saleable Silver Production: 189 metric tonnes, down 4% quarter-over-quarter but up 4% year-over-year.

Sustainability and Strategic Initiatives:

• Renewable Energy Commitments: Advancing with a 450 MW power delivery agreement.
• Sustainability Ranking: Ranked first globally in S&P Sustainability Assessment in the Metals and Mining sector.

These figures underscore Hindustan Zinc Limited’s robust operational and financial performance in FY24, despite facing lower metal prices and market challenges.

Operational Highlights of FY24

In FY24, Hindustan Zinc achieved its highest historic production levels across mined metal, refined metal, and silver, marking substantial year-over-year growth. Mined metal production peaked at 1,079 kilotonnes, a 2% increase from the previous year, driven by enhanced mined metal grades. Refined metal production also saw a year-over-year increase, reaching a new high of 1,033 kilotonnes. Notably, the company reported the highest-ever quarterly refined metal production in Q4, up 6% sequentially.

The company has also solidified its position as the third-largest silver producer globally, with annual silver production climbing by 5% year-over-year to 746 metric tonnes. This growth in silver output aligns with Hindustan Zinc’s strategic focus on maximizing silver production, which has been further supported by optimized operational and commercial efficiencies.

Financial Performance and Market Position

Despite a challenging market environment characterized by falling metal prices, Hindustan Zinc reported a quarterly revenue increase of 3% and a slight EBITDA increase of 2%. For the full year, however, revenue saw a 15% decline due to lower zinc prices, though this was partly offset by improved silver and lead volumes and favorable exchange rates.

The company’s profitability was also affected, with the net profit for FY24 reported at INR 7,759 Crore, marking a 26% decrease year-over-year, primarily due to lower EBITDA, which was somewhat mitigated by reduced tax expenses.

Strategic Initiatives and Sustainability Commitments

Hindustan Zinc’s CEO, Mr. Arun Misra, emphasized the company’s strategic initiatives aimed at production optimization and cost efficiency, which have played a crucial role in maintaining competitive margins and preserving shareholder value amid market headwinds. The company’s focus on sustainability was highlighted by its advancements in renewable energy commitments and its ranking as first globally in the S&P Sustainability Assessment for the Metals and Mining sector.

Looking Ahead: Future Prospects and Developments

As Hindustan Zinc moves forward, it remains committed to enhancing its operational capabilities and financial resilience. The upcoming year is poised to be another robust period, with continued focus on maximizing production and leveraging market opportunities to ensure sustained growth and shareholder returns.

Hindustan Zinc Limited’s performance in FY24 exemplifies a successful balance between aggressive production targets and strategic cost management. The company’s ability to achieve record production levels despite fluctuating market conditions demonstrates a well-executed business strategy. Moving forward, Hindustan Zinc is well-positioned to continue its growth trajectory, given its strong operational foundation and proactive approach to market challenges.