IGI Logo

Indian miner Hindustan Zinc on Friday reported a fall in first-quarter profit, dragged by weak zinc and lead prices, and despite reduced expenses and tax burden.

The company's consolidated net profit fell 36.5% to 19.64 billion rupees ($239.5 million).

Revenue from operations fell to 71.11 billion rupees from 92.36 billion rupees a year ago, which it attributed to lower zinc and lead prices and lower lead volumes - though it was partially offset by higher zinc volumes and silver prices.

Prices of zinc and lead on the London Metal Exchange, on which Hindustan Zinc is registered, have fallen from last year amid persistently high interest rates and tepid demand, especially from top metals consumer China due to a stalling post-pandemic recovery.

Zinc is primarily used in making galvanised steel, which is used in the construction and automotive industries.

The company's integrated zinc production was up 1% on-year at 209,000 metric tons, while lead output was down 6% and silver was up 1%.

Zinc's cost of production before royalty was down 5.6%, aided by softened coal and commodity prices, the company said.

Total expenses fell 1.4%, while the net tax expenses were down 59%.

The mined metal and refined metal production in FY24 is expected to be higher than last year, the company said in a statement.

Zinc's cost of production in FY24 is expected to be flat on-year, while project capex for the year is expected to be in the range of $175-200 million, it said.

The Indian government may delay the plan to sell its shares in Hindustan Zinc, sources told Reuters on Wednesday.

Shares of Hindustan Zinc fell 1.8% after the results. The shares rose 3.07% in the June quarter, compared to a fall of 22.24% in the year-ago period.