Vedanta to exclude base metals business from sweeping demerger
The group said it will consider the base metals business demerger at a later stage.
Indian miner Hindustan Zinc reported its fifth consecutive decline in quarterly profit on Friday, dragged by lower zinc prices and sales.
Still, the 6% profit drop is the smallest since it first reported a fall in profit in the third quarter of last year. Shares of the company rose as much as 3.7% after its results.
The company’s largest revenue-generating segment, zinc, remains under pressure mainly due to supply-demand imbalances, inflationary pressures and geopolitical issues in the global market.
Consolidated net profit fell to 20.28 billion rupees ($244 million) in the three months to Dec. 31 from 21.56 billion rupees a year ago.
Hindustan Zinc was hurt by the fall in prices of key base metals – zinc and lead – on the London Metal Exchange during the quarter. Although the prices improved sequentially, they were still lower than a year earlier.
Sales of Zinc, which constitutes roughly two-thirds of the company’s total sales, slumped 20% in the period
The decline in prices and sales led to a 7% fall in revenue, marking the fifth consecutive quarter of decline.
Production of refined lead increased 21% and mined metal rose 7%, due to improved mined metal grades and higher ore output. However, the production of its key refined zinc fell 4%.
Hindustan Zinc is the first among major listed miners, including its parent Vedanta, to report quarterly results.
During the quarter, Hindustan Zinc declared its second dividend for this fiscal, amounting to 25.35 billion rupees.
Additionally, during the September-quarter, the company announced plans to create separate entities for its zinc, lead, silver and recycling businesses to unlock “potential value.” However, the company has not provided any further updates on this plan since then.
($1 = 83.1120 Indian rupees)
(By Ashna Teresa Britto and Varun Vyas)
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