Hind Zinc net down 7% on higher tax outgo

Our Bureau Mumbai | Updated on October 20, 2020

Hindustan Zinc net profit was down seven per cent in the September quarter at ₹1,940 crore, against ₹2,081 crore in the same period last year, due to higher tax outgo and lower realisation.

Revenue from operations was up 24 per cent at ₹5,533 crore (₹4,461 crore).

The company announced an interim dividend of ₹21.30 a equity share, leading to outgo of ₹9,000 crore. Its tax expense during the quarter was higher at ₹682 crore against ₹6 crore last year. The company recorded deferred tax write back of ₹253 crore last year.

The price of zinc was down one per cent at $2335 a tonne and lead slipped eight per cent to $1873 a tonne. However, silver was up 43 per cent to $24.26 an ounce while rupee depreciated six per cent to 74.24 against dollar in the quarter under review.

The company has raised ₹5,020 crore through non-convertible debenture and ₹4,778 crore via short-term commercial paper. Following this, the net cash available with the company has come down to ₹17,833 crore, against ₹27,631 crore.

Vedanta Resources rating

Meanwhile, Moody's Investors Service has placed Vedanta Resources' B1 corporate family rating under review for downgrade.

Concurrently, the ratings agency said it has also placed under review for downgrade the B3 rating on the senior unsecured bonds issued by Vedanta and those issued by its wholly-owned subsidiary Vedanta Resources Finance II Plc, and guaranteed by Vedanta, affecting $4.2 billion in outstanding debt.

“The review follows an increase in refinancing risk and significant funding needs at the holding company level following Vedanta Resources’ failure to acquire the balance shareholding in key subsidiary Vedanta Ltd that would have improved access to group cash,” said Kaustubh Chaubal, Moody's Vice-President and Senior Credit Officer.

With the failed delisting, the holding company’s liquidity risk has increased with around $2.9 billion in debt maturities between April 2020 and March 2022 and annual interest payment of $470 million each year, said the rating agency.

Published on October 20, 2020

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