Vedanta Group company Hindustan Zinc Ltd (HZL) today reported nearly 3 per cent dip in net profit at Rs 1,618 crore for the first quarter ended June 30 on the back of lower volumes and increased expenses.
The company had posted a profit of Rs 1,660.45 crore in the same quarter of the previous financial year, it said in a statement.
"Net profit decreased by 3 per cent to Rs 1,618 crore in Q1 FY 2015. The impact of lower EBITDA was partly offset by strong other income during the quarter," the company said in a statement.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased by 10 per cent to Rs 1,352 crore in Q1 FY 2015 due to lower production volumes and higher production cost, the zinc and lead maker said.
The company's total income from operations rose to 3,007.19 crore during the quarter under review as compared to Rs 2,984.16 crore in the corresponding quarter.
The expenses during the first quarter also rose to Rs 1,857.07 crore as against Rs 1,669.72 crore in the corresponding quarter in previous fiscal.
Chairman, Hindustan Zinc, Agnivesh Agarwal said, "Zinc prices are looking up as market sentiments are improving and metal balance remains favourable. Our expansion projects will enhance our market leadership and we are aggressively accelerating our mine development efforts to increase future production."
Mined metal production was 163,131 tonnes in Q1, as compared with 237,825 tonnes a year ago. "The decrease is in-line with our mine plan, which involves lower mined metal production on a year-on-year basis in the first half of the year where we excavate more waste than ore. With higher production planned in second half, the transition to underground mining is progressing well," it said.
"Integrated refined metal production of zinc-lead during the quarter was lower by 20 per cent compared to a year ago, in-line with mined metal production," the statement said.
The company said, "The lower production volumes significantly impacted costs, accentuated by rupee depreciation, planned plant shutdowns and higher mine development."
During the quarter, total mine development increased by 15 per cent, it said adding, Rampura Agucha and Sindesar Khurd shaft projects are progressing well.
As on June 30, 2014, the company had cash and cash equivalents of Rs 26,272 crore, out of which Rs 22,172 crore was invested in mutual funds, Rs 2,049 crore in bonds and Rs 2,000 crore were in fixed deposits with banks.
HZL is one of the largest integrated producers