Nexa Resources (NEXA) Q4 2025 Earnings Transcript

Core Insights - Nexa Resources S.A. reported strong financial performance in Q4 2025, with net revenues of $903 million and adjusted EBITDA of $300 million, reflecting improvements in operational execution and favorable pricing for zinc and by-products [15][5][1] - Zinc production reached 91,000 tons in Q4 2025, marking a 9% increase from the previous quarter, driven by enhanced performance across operations, particularly at Aripuanã [6][2] - The company achieved full-year net revenues of $3 billion and adjusted EBITDA of $772 million, indicating a solid operational execution and a favorable pricing environment [5][15] Financial Performance - Q4 2025 net revenues increased by 18% sequentially and 22% year-over-year, driven by higher metal prices and improved mining performance [15] - Full-year adjusted EBITDA reached $772 million, an 8% increase compared to 2024, with a margin of 26% [16] - Free cash flow for the year was negative $105 million, influenced by debt reductions and dividends [21] Mining Operations - The mining segment generated net revenues of $532 million and adjusted EBITDA of $266 million in Q4 2025, resulting in a 50% EBITDA margin [8] - Full-year zinc production totaled 316,000 tons, meeting production guidance, while total metal sales reached 567,000 tons [5][12] - Cash costs improved to negative $0.58 per pound in Q4, benefiting from stronger by-product grades and lower treatment charges [7] Smelting Performance - Smelting segment sales were 142,000 tons for Q4 and 567,000 tons for the full year, in line with guidance [12] - Q4 cash cost was $1.41 per pound, reflecting higher zinc prices and lower treatment charges [13] - Full-year net revenues for the smelting segment totaled approximately $2 billion, with adjusted EBITDA of $113 million [14] Strategic Projects - The Cerro Pasco Integration Project aims for a life-of-mine extension of over 15 years, enhancing profitability and operational flexibility [10][33] - The fourth tailings filter at Aripuanã is on track for commissioning in the first half of 2026, expected to unlock full operational capacity [9][32] - Exploration activities confirmed new mineralized extensions across key assets, reinforcing the potential for further life-of-mine extensions [11][12] Market Outlook - Zinc prices remained supported throughout 2025 due to tight concentrate supply and low LME inventories, with expectations for a gradual improvement in mining supply in 2026 [24][26] - The silver streaming agreement will step down from 65% to 25% in Q2 2026, increasing Nexa's realized exposure to silver prices [28] - Copper prices appreciated in 2025, driven by supply discipline and sustained demand, with medium-term supply constraints expected to support prices [27] ESG Initiatives - The company advanced its ESG strategy, focusing on renewable energy supply, waste reduction, and community engagement [30] - A structured review of public ESG targets was conducted to enhance transparency and ensure alignment with operational realities [31] - Nexa Resources aims to maintain a strong governance framework and improve methodological consistency in its sustainability commitments [35]