Mr. Agnivesh Agarwal, Chairman said “I am pleased to see a robust start to the new financial year. Our underground mines delivered their highest ever volumes this quarter, underpinning our smooth transition to an entirely underground mining company. Zinc prices strengthen towards the quarter-end on continued supply deficits and declining inventories of Zinc, we look forward to setting new benchmarks this year.”
Mined metal production of 233kt during the quarter was achieved, up 84% y-o-y. The increase was primarily on account of higher volumes from all mines, higher zinc grade and depletion of opening ore stock.
Integrated zinc metal production during the quarter was at 194kt, up 91% y-o-y. Integrated saleable lead metal production during the quarter was at 35kt, up 42% y-o-y. The increase was in line with availability of mined metal, supported by smelter efficiencies. Integrated saleable silver production during the quarter was 115 MT, up 30% y-o-y due to higher grade and volume from Sindesar Khurd mine.
Revenues during the quarter were Rs. 4,961 Crore, up 79% y-o-y on account of strong zinc & lead prices and higher volume.
The zinc metal cost of production per MT before royalty (COP) during the quarter was at Rs. 62,698 ($973), higher by 2% y-o-y (6% in dollar terms). The increase was due to substantial increase in coal & commodity prices and lower acid realization, offset by higher volumes.
The above revenue and cost of production resulted in a 113% increase in EBITDA during the quarter to Rs. 2,404 Crore.
During the quarter, net profit increased by 81% y-o-y to Rs. 1,876 crore. The impact of higher EBITDA was partly offset by lower investment income on a smaller investment corpus post dividend pay-out and interest cost on temporary Commercial Paper.
Capital mine development increased by 82% y-o-y and 28% q-o-q to 8,828 meters during the quarter.
At Rampura Agucha during the quarter, the equipping of the main shaft was completed and winder will be commissioned in the current quarter. Order for Ventilation fans was placed with commissioning targeted by end of the financial year, in line with return air drive development. We expect the production from the shaft to start in Q3 FY19.
Sindesar Khurd mine main shaft headgear erection was completed and preparatory works for equipping is in progress. We expect commissioning of winder system by Q1 FY 19 and production from the shaft to start in Q2 FY19. During the quarter we awarded order to L&T for a new mill of 1.5 mtpa capacity, to take total capacity to 5.8 mtpa. Excavation work for mill has started in full swing with targeted commissioning by Q2 next year.
In Zawar mine raise boring machines were mobilized for ventilation raises at Balaria and Mochia mines and work was commenced. Zawar mill debottlenecking project, now upgraded to 2.7 mtpa, will be completed by this quarter and associated power up-gradation project was completed during the quarter. We are now upgrading Zawar to the status of a mega mining complex based on revised R&R potential and have increased focus on our exploration program for Zawar.
The Fumer project is progressing as per schedule and expected to complete by mid FY 2019. All long lead items are ordered and civil works are in full swing.
The Company maintains its volume guidance given in April with Dollar COP (excluding royalty) to be slightly higher than previous year and are on track to reach mined metal capacity of 1.2 mtpa in FY 2020.
Liquidity and investment
The Company’s net cash and cash equivalents was Rs. 16,998 Crore as at June 30, 2017 which is excluding Rs. 6,959 Crore of short term commercial paper. The gross investments were Rs. 23,957 Crore in high quality debt instruments.