Hindustan Zinc Limited · NSE:HINDZINC
Hindustan Zinc — Q2 FY24 Earnings Presentation
41 slides from Hindustan Zinc's earnings presentation, Oct 20, 2023
Slide 1: Cover letter to stock exchanges
HZL/2023-SECY/ October 20, 2023 BSE Limited National Stock Exchange of India Limited P.J. Towers, Dalal Street, “Exchange Plaza” Mumbai - 400001 Bandra-Kurla Complex, Mumbai – 400051 Kind Attn: - General Manager, Kind Attn:- Head - Listing & Corporate Dept. of Corporate Services Communications Scrip
Slide 2: Results for the Second Quarter and Half Year Ended September 30, 2023
Hindustan Zinc Limited Results for the Second Quarter and Half Year Ended September 30, 2023 “Robust H1 backed by strategic growth projects, sustained cost optimization and ESG excellence.” Highlights Q2 FY24 • Mined metal production: 252 kt • Refined metal production: 241 kt • Saleable silver produ
Slide 3: Financial Summary Standalone
Mr. Sandeep Modi, CFO, said: “With our persistent focus on cost optimisation, operational efficiencies and working capital management, Hindustan Zinc delivered another quarter of steady margins and financial performance despite the complex economic landscape. I am happy to share that driven by our c
Slide 4: Financial Summary Consolidated
Financial Summary Consolidated INR Crore or as stated Q2 Q1 H1 Particulars 2024 2023 Change 2024 Change 2024 2023 Change Sales1 Zinc 4,033 5,824 -31% 4,668 -13% 8,701 12,689 -31% Lead 1,117 991 13% 961 16% 2,078 1,978 5% Silver 1,297 1,079 20% 1,298 0% 2,595 2,188 19% Others 344 442 -22% 355 3% 699
Slide 5: Operational and Financial Performance
Operational Performance Mined metal production for the quarter was 252 kt, down 1.4% y-o-y and 2.0% sequentially mainly due to lower ore production at Rampura Agucha and Kayad mine partly offset by better overall metal grades. H1 FY24 mined metal production stood at 509 kt, marginally up y-o-y on ac
Slide 6: Key Strategic Updates, Projects Update, ESG Update
Key Strategic Updates On 29th September’23, the Board authorized ‘Committee of Directors’ to evaluate value unlocking measures. External advisors to assist in the evaluation exercise have been appointed by the management and work is underway. Projects Update • Fumer plant commissioned in Q2 FY24 thr
Slide 7: Outlook for FY24
Outlook for FY24 We would like to reiterate our guidance for FY24. Mined metal is expected to be between 1,075-1,100 kt and refined metal production in the range of 1,050-1,075 kt. Saleable silver production is projected to be between 725-750 MT. Zinc cost of production in FY24 is expected to be in
Slide 8: About Hindustan Zinc
About Hindustan Zinc Hindustan Zinc, a Vedanta Group company in Zinc-Lead and Silver business is world’s 2nd largest integrated Zinc producer and 5th largest Silver producer. The company governs about ~75% of the growing Zinc market in India with its headquarters at Udaipur along with Zinc-Lead mine
Slide 9: Hindustan Zinc Limited Investor Presentation October 2023 Q2 FY24
HINDUSTAN ZINC LIMITED Investor Presentation October 2023 Q2 FY24 Earnings Presentation HINDUSTAN ZINC LIMITED – Q2 FY24 INVESTOR PRESENTATION Sensitivity: Internal (C3)
Slide 10: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness, or reliability of this information. Any forw
Slide 11: Unique Positioning in Metal & Mining Landscape
Unique Positioning in Metal & Mining Landscape India’s largest & 5th largest only integrated silver producer producer of zinc, lead globally and silver World’s 2nd largest World’s largest integrated zinc producer underground (UG) and one of the lowest- zinc mining operations at cost producers global
Slide 12: Q2 FY24 performance backed by strategic growth projects, cost optimization and ESG excellence
Q2 FY24 performance backed by strategic growth projects, sustained cost optimization and ESG excellence Sustainability Operational Financial ▪ SBTi validated the targets of ▪ Q2 refined metal down 7% ▪ EBITDA of c.INR 3.1k Cr & 50% reduction in Scope 1 & sequentially on account of PAT of c.INR 1.7k
Slide 13: Sustainability Update
SUSTAINABILITY UPDATE
Slide 14: Sustainability Goals 2025
Sustainability Goals 2025 Water Stewardship Biodiversity Climate Change Circular Economy 0.5 mn tCO2e GHG 5x water positive 3x increase in gainful Conservation emission savings company and 25% utilisation of smelting Protect and enhance from base year reduction in freshwater process waste biodiversi
Slide 15: Roadmap to Net-zero
Roadmap to Net-zero Hindustan Zinc is the only Near-Term Long-Term SBTi Approved Indian Company in Mining - in Scope 1 Hindustan Zinc's Iron, Aluminium, Other metals & 2 GHG emissions and by FY2050 sector with validated and of Scope 3 emissions by approved SBTi targets in FY2030 alignment with 1.5℃
Slide 16: Sustainability in Action
Sustainability in Action Move towards Green Towards 5x Water Transportation Positivity by 2025 • MoU signed with GreenLine for • Inaugurated state-of-the-art zero 180 Liquified Natural Gas (LNG) liquid discharge plant of 4,000 KLD vehicles capacity (phase 1) in collaboration • Utilisation: Inter uni
Slide 17: Sustainability in Action
Sustainability in Action Renewable Power Update : Hindustan Zinc entered into Power Delivery Agreements (PDA) with Serentica Renewables India Private Ltd (SRIPL4 and SRIPL5) for Dariba (200 MW) and Chanderiya (250 MW) plant locations respectively. SRIPL4 & SRIPL5 are part of Serentica group which is
Slide 18: Key Priorities: Sustainability Goals 2025
Key Priorities: Sustainability Goals 2025 Progress Major Actions GHG intensity (Scope 1 + 2)/MT • PDA signed for 450 MW Renewable Energy (work initiated) Climate • 100% RE power consumption at Pantnagar Metal Plant Change 5.44 5.15 4.97 4.71 • Use of biomass (5%) in power plant 4.44 • Energy efficie
Slide 19: Key Priorities: Sustainability Goals 2025
Key Priorities: Sustainability Goals 2025 Progress Major Actions One year of zero Fatalities • Critical Risk Management (CRM) implementation Zero Harm TRIFR (number per Mn hours worked) • Community of Practice for Structural Integrity & Inframatrix Implementation • Safety governance structure for bu
Slide 20: Key Priorities: Communities
Key Priorities: Communities Skill Development Sports Women Empowerment ▪ 286 Successful Placements: ▪ Zawar based defender Mohammed Kaif - 10 trainees from Unarmed Security Guard selected in the India Under-16 Football squad ▪ Launched website of the marketing trade from Zinc Kaushal, Hurda at TCS f
Slide 21: Operational Review & Business Update
OPERATIONAL REVIEW & BUSINESS UPDATE Mr. Arun Misra CEO HZL
Slide 22: Market Update
Market Update ▪ Substandard economic performance in US, Silver prices ($/toz) Zinc ($/T) Lead ($/T) 3,915 Europe, and China counterbalanced by 30.0 optimistic outlook of increased efforts by 24.1 3,271 23.6 3,124 25.0 22.6 22.6 3,001 21.2 Chinese authorities to support growth 19.2 2,526 2,428 20.0 2
Slide 23: Operational Highlights: Record H1 mined metal production
Operational Highlights : Record H1 mined metal production Mined Metal Refined Metal Saleable Silver H1 FY24 H1 FY24 H1 FY24 509 kt 501 kt 360 MT (flat y-o-y) (down 1% y-o-y) (down 3% y-o-y) Q2 FY24 Q2 FY24 Q2 FY24 252 kt 241 kt 181 MT (down 1% y-o-y) (down 2% y-o-y) (down 7% y-o-y) 15 HINDUSTAN ZINC
Slide 24: Operational Review
Operational Review Q2 FY24 H1 FY24 • Mined metal marginally down y-o-y and 2% down q-o-q on account • Highest-ever first half mined metal, up y-o-y, on account of higher ore of lower ore production at Rampura Agucha and Kayad mine partly production at Rampura Agucha Mine supported by better overall
Slide 25: Project Update (1/3)
Project Update (1/3) I. Fumer Project for Hydrometallurgical Smelters: Fuming operations as a technology generate an environment-friendly saleable slag. India’s first Fumer plant at Chanderiya using fuming technology, aims at converting jarosite to clean slag enabling waste recycling and recovery of
Slide 26: Project Update (2/3)
Project Update (2/3) II. Hindustan Zinc Alloy Private Limited: III. Rajpura Dariba Mill capacity expansion: Transitioning from commodity-based to product-based Company - Ore treatment capacity expansion from 0.9 mtpa to 1.1 mtpa 26% of Indian zinc market is addressed by imports (including alloys). u
Slide 27: Project Update (3/3)
Project Update (3/3) IV. New Roaster at Debari: V. Hindustan Zinc Fertilisers Private Limited: Roasting is an essential part of the process of producing India’s annual requirement of DAP/NPK Fertilizer is 19+ million TPA saleable zinc in hydrometallurgical smelters. and the country imports almost 6+
Slide 28: Key Strategic Update
Key Strategic Update Value Unlocking Measures & Shareholder Value Creation Considering the scale, nature, and potential opportunities for various business verticals of the Company, the Board of Directors decided to undertake a comprehensive review of the corporate structure for unlocking potential v
Slide 29: Silver - The Strategic Metal
Silver - The Strategic Metal Silver market globally was in 7kt deficit in 2022. There has been a strong demand gains across a number of key segments, while supply had been effectively unchanged. India’s silver consumption is driven by jewellery segment with industrial demand low as compared to globa
Slide 30: HZL Silver Segment - Growth Chronicle & Future Potential
HZL Silver Segment - Growth Chronicle & Future Potential Silver production (MT) 714 706 India’s only silver producer and 5th 679 647 610 largest silver producer globally*, 558 progressing from 23rd position in 453 425 374 350 2016 to 5th largest in 2023 328 207 148 139 105 With FY24 estimate of 725-
Slide 31: Financial Review
FINANCIAL REVIEW Mr. Sandeep Modi CFO HZL
Slide 32: Financial Highlights
Financial Highlights (All figures in INR Cr unless stated otherwise) Revenue* EBITDA Profit After Tax H1 FY24 Q2 FY24 H1 FY24 Q2 FY24 H1 FY24 Q2 FY24 14,073 6,791 6,481 3,122 3,693 1,729 (down 21% y-o-y) (down 19% y-o-y) (down 33% y-o-y) (down 29% y-o-y) (down 36% y-o-y) (down 35% y-o-y) Gross Inves
Slide 33: Consolidated Financial Review
Consolidated Financial Review Q2 FY24 H1 FY24 • Revenue* down 19% y-o-y, due to significantly lower zinc LME, lower • Revenue* down 21% y-o-y, on account of significantly lower zinc zinc & silver volumes partly offset by higher lead & silver prices and LME, lower metal & silver volumes partly offset
Slide 34: Appendix
APPENDIX
Slide 35: EBITDA Bridge (H1 FY24 vs H1 FY23)
EBITDA Bridge (H1 FY24 vs H1 FY23) (All figures in INR Cr unless stated otherwise) *Inclusive of gains from Strategic Hedging in previous period ^Inclusive of input commodity inflation Note: All financials are at consolidated level 27 HINDUSTAN ZINC LIMITED – Q2 FY24 INVESTOR PRESENTATION Sensitivit
Slide 36: EBITDA Bridge (Q2 FY24 vs Q2 FY23)
EBITDA Bridge (Q2 FY24 vs Q2 FY23) (All figures in INR Cr unless stated otherwise) *Inclusive of gains from Strategic Hedging in previous period ^Inclusive of input commodity inflation Note: All financials are at consolidated level 28 HINDUSTAN ZINC LIMITED – Q2 FY24 INVESTOR PRESENTATION Sensitivit
Slide 37: EBITDA Bridge (Q2 FY24 vs Q1 FY24)
EBITDA Bridge (Q2 FY24 vs Q1 FY24) (All figures in INR Cr unless stated otherwise) ^Inclusive of input commodity inflation Note: All financials are at consolidated level 29 HINDUSTAN ZINC LIMITED – Q2 FY24 INVESTOR PRESENTATION Sensitivity: Internal (C3)
Slide 38: Fundamental Growth Strategy: Maximising Shareholder Value
Fundamental Growth Strategy MAXIMISING SHAREHOLDER VALUE Expansion of Capacities Maintaining a Portfolio Strengthen Cost Expansion of Product Progressing towards of Mines with Long Life Leadership Portfolio through Sustainable Future • Expand mined metal Customer Centricity capacity (currently at •
Slide 39: Awards and Recognition - Q2 FY24
Awards and Recognition - Q2 FY24 ❖ Zawar group of mines has been awarded the CII National Award in Innovation Project Category for Environment Best Practices ❖ Hindustan Zinc’s Dariba Smelting Complex won Platinum Award at Apex India Occupational Health and Safety Awards 2023 in Metal & Mining Secto
Slide 40: Metal Prices and Exchange Rate trends
Metal Prices and Exchange Rate trends Zinc Prices ($/t): Impacted by macro-economic factors Lead Prices ($/t): Range bound in last 9 months $3,600 $2,400 $3,400 $2,200 $3,200 $2,000 $3,000 $1,800 $2,800 $1,600 $2,600 $1,400 $2,400 $2,200 $1,200 $2,000 $1,000 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23
Slide 41: Thank You
THANK YOU HINDUSTAN ZINC LIMITED Yashad Bhawan, Udaipur-313 004, Rajasthan T: +91 294 6604000-02 www.hzlindia.com HINDUSTAN ZINC LIMITED – Q2 FY24 INVESTOR PRESENTATION Sensitivity: Internal (C3)