Hind Zinc drops almost 5%

about 8 months ago
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Hindustan Zinc fell almost 5% to Rs.311.70 but regained some of the lost ground; it is now at Rs.314 levels, nevertheless in the red.

The market was disappointed with the flat Q4FY18 performance of the company; probably more than that, it did not declare any final dividend which went on to disappoint further.

During the quarter, it did report the highest EBITDA at Rs. 3,660 Crore, up 12% q-o-q. It also reported a record refined silver production at 170 MT, up 28% q-o-q  and record refined lead production at 50kt, up 9% q-o-q.

Its total revenue for the quarter fell 7% (YoY) at Rs.6174 crore, lead mainly by fall in zinc sales. On a y-o-y basis, higher metal prices and lead & silver volumes were offset by nil mined metal sales, lower zinc volumes and rupee appreciation. The revenue was impacted by Rs 335 Crore due to lower realisation from forward sale of 165kt of zinc & lead metal.

EBITDA came in at Rs.3660, down 3% (YoY) while net profit was at Rs.2505 crore, down 18%. In addition to higher depreciation and tax rate, Net Profit was impacted by a one-time exceptional loss of Rs 51 Crore related to gratuity provision for earlier years as per the ceiling enhancement announced recently.

It ended FY18 with a net profit of Rs.9276 crore, up 12%.

The Street should actually have nothing to complain in terms of dividend as it has been generous.  On March 16, 2018, it declared second interim dividend of 300% i.e. Rs. 6 per share (300%) on equity share of Rs. 2. Together with the interim dividend of Rs 2 per share (100%) paid in October 2017, the aggregate interim dividend paid during FY 2018 was Rs 8 per share (400%) amounting to Rs. 4,068 Crore including DDT. In view of the second interim dividend, no final dividend is recommended.

As on March 31, 2018, the Company's cash and cash equivalents was Rs. 20,395 Crore invested in high quality debt instruments.

In FY 2018, the company contributed Rs. 9,301 Crore to Government treasury through royalties, taxes and dividends.

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