Nexa Resources S.A.(US:NEXA)2025-10-30 20:21Financial Performance - Net revenues for Q3 2025 totaled US$764 million, an 8% increase from US$708 million in Q2 2025 and also up 8% year-over-year from Q3 2024[11]. - Net income reached US$100 million in Q3 2025, significantly up from US$13 million in Q2 2025 and US$6 million in Q3 2024, resulting in earnings per share of US$0.52 for the quarter[15]. - Adjusted EBITDA for Q3 2025 was US$186 million, up from US$161 million in Q2 2025 and US$183 million in Q3 2024, with a consolidated Adjusted EBITDA margin of 24%[15]. - Free cash flow for Q3 2025 was positive at US$52 million, primarily due to higher operating cash flow and lower interest payments[15]. - Total cash at the end of Q3 2025 was US$470 million, up from US$418 million at the end of Q2 2025, with total available liquidity of US$790 million[15]. - For the first nine months of 2025, net revenues totaled US$2.1 billion, up 4% compared to the same period in 2024, primarily due to higher by-products contribution[53]. - Cost of sales in Q3 2025 amounted to US$610 million, a 5% increase year-over-year, attributed to lower TCs and higher zinc LME prices[54]. - SG&A expenses in Q3 2025 totaled US$37 million, up 27% year-over-year, mainly due to higher personnel costs and legal expenses[60]. - In 9M25, net income totaled US$142 million compared to a net loss of US$76 million in 9M24, indicating a strong recovery[78]. Production and Operations - Zinc production in Q3 2025 was 84kt, a 14% increase quarter-over-quarter and a 1% increase year-over-year, driven by improved performance at Vazante and record production at Aripuanã[12]. - The mining segment delivered Adjusted EBITDA of US$164 million in Q3 2025, a 28% increase year-over-year, supported by higher by-products prices[15]. - Zinc equivalent production increased by 9% to 164kt in 3Q25, reflecting improvements across various mining assets[89]. - Treated ore volume in 3Q25 was 3,382kt, remaining stable year-over-year, with notable performances at Aripuanã, Cerro Lindo, and El Porvenir[85]. - In 3Q25, treated ore volume at Cerro Lindo was 1,586kt, up 1.6% year-over-year and down 3% quarter-over-quarter[92]. - Zinc production at Cerro Lindo was 22.3kt, a decline of 3.5% year-over-year and 9.7% quarter-over-quarter, attributed to lower-grade zones[93]. - At El Porvenir, zinc production reached 14.4kt in 3Q25, up 12.1% year-over-year and 5.9% quarter-over-quarter, driven by higher ore processing volumes[101]. - In 3Q25, Vazante's ore mined increased by 6.6% year-over-year to 410kt, while treated ore decreased by 2.3% to 439kt[114][116]. - Zinc production at Vazante totaled 33.7kt, down 7% from 3Q24, but increased by 23% compared to 2Q25 due to improved access to higher-grade zones[117]. - In 3Q25, Aripuanã's ore mined was 365kt, a significant decrease of 28.9% year-over-year, while treated ore increased by 2.3% to 420kt[122]. Cost Management - Net debt to last twelve months Adjusted EBITDA ratio improved to 2.2x at the end of Q3 2025, down from 2.3x at the end of Q2 2025[15]. - The consolidated run-of-mine mining cost for 9M25 was US$49.5/t, at the lower end of the 2025 guidance, while the C1 cash cost was US$(0.18)/lb, significantly below the expected range due to increased by-products contribution[35]. - Nexa's C1 cash cost for the smelting segment was US$1.24/lb in 9M25, consistent with the 2025 guidance, while the smelting conversion cost was US$0.34/lb[37]. - The average run-of-mine mining cost was US$87.3/t in 3Q25, down 20% from US$109/t in 2Q25, due to higher treated ore volume and lower operational costs[129]. - Cash cost net of by-products at Cerro Lindo improved to US$(0.98)/lb in 3Q25 from US$(0.36)/lb in 3Q24, reflecting higher by-products contribution[96]. - Cash cost net of by-products at El Porvenir significantly decreased to US$(0.49)/lb in 3Q25 from US$0.18/lb in 3Q24, primarily due to higher by-products contribution[103]. - The cash cost net of by-products at Atacocha was US$(2.37)/lb in 3Q25, improving significantly by US$1.44/lb from 3Q24[112]. - Cash cost net of by-products decreased to US$(0.20)/lb in 3Q25, down US$0.13/lb from 2Q25, attributed to higher by-products prices and increased sales volumes[130]. - Cash cost net of by-products was US$1.55/lb in 3Q25, up 18.4% from US$1.31/lb in 3Q24[175]. Sustainability and Initiatives - The company is advancing its sustainability initiatives, including operating the Cajamarquilla smelter entirely on renewable hydroelectric energy, reinforcing its commitment to low-carbon production[6]. - In Q3 2025, Nexa Resources achieved significant progress in the Cerro Pasco Integration Project, with construction on track and key milestones reached, including earthworks and procurement of major equipment[23]. - Nexa's exploration and project evaluation guidance for 2025 remains unchanged at US$88 million, with other expenses expected to total approximately US$20 million[45]. - The fourth tailings filter is expected to enhance operational stability once commissioned in 1H26, addressing seasonal rainfall challenges[128]. Debt and Financial Position - As of September 30, 2025, Nexa's total debt reached US$1,834 million, reflecting a 1% increase from June 30, 2025[198]. - The average maturity of total debt is 7.4 years with an average interest rate of 6.32% per year[199]. - 5% (US$85 million) of total debt is maturing in 2025, while 2% (US$31 million) is maturing in 2026[199]. - 30% (US$551 million) of total debt is set to mature between 2027 and 2031[199]. - 35% (US$638 million) of total debt will mature between 2032 and 2036[199]. - 29% (US$529 million) of total debt is maturing in and after 2037[199]. - 82% (US$1,511 million) of total debt is denominated in U.S. dollars, while 18% (US$322 million) is in Brazilian reais[199]. - Fitch Ratings reaffirmed Nexa's 'BBB-' investment grade rating with a 'Stable' Outlook, highlighting the company's solid financial position[25].