Nexa Resources S.A.(US:NEXA)2026-02-27 16:00Financial Performance - In Q4 2025, the company reported net revenues of $903 million, an 18% increase sequentially and a 22% increase year-over-year, driven by higher average metal prices and improved mining performance [15][5] - Adjusted EBITDA for Q4 2025 reached $300 million, reflecting a 33% margin, while full-year adjusted EBITDA was $772 million, an 8% increase compared to 2024 [15][16] - The company achieved a net income of $81 million in Q4 2025, translating to $0.38 per share, and a full-year net income of $223 million, or $1 per share [5][6] Mining Segment Performance - Zinc production in Q4 2025 reached 91,000 tons, a 9% increase from Q3 2025, with full-year production totaling 316,000 tons, meeting guidance [7][4] - The mining segment generated net revenues of $532 million in Q4 2025, with an adjusted EBITDA of $266 million, resulting in a 50% EBITDA margin [8][6] - Consolidated mining cash cost improved to negative $0.58 per pound in Q4 2025, benefiting from stronger byproduct grades [7][8] Smelting Segment Performance - Total metal sales in Q4 2025 were 142,000 tons, with full-year sales reaching 567,000 tons, in line with guidance [12][14] - The smelting segment reported net revenues of $573 million in Q4 2025, with adjusted EBITDA of $34 million, reflecting a challenging market environment [13][14] - Full-year adjusted EBITDA for the smelting segment was $113 million, corresponding to a 6% EBITDA margin [14] Strategic Developments - The Aripuanã project is a key near-term catalyst, with the fourth tailings filter installation on schedule for commissioning in the first half of 2026 [9][30] - The Cerro Pasco Integration Project aims for a life-of-mine extension of over 15 years, enhancing profitability and operational flexibility [10][30] - The company is focused on generating sustainable cash flow and maintaining a balanced capital allocation approach, including deleveraging and shareholder returns [31][30] Market Commentary - Zinc prices remained well-supported throughout 2025 due to persistent concentrate tightness and low LME inventories, with expectations for a gradual improvement in mining supply in 2026 [23][24] - Copper prices appreciated in 2025 driven by supply discipline and sustained demand, particularly from electrification [24] - Silver prices saw significant interest, with the company producing around 11 million ounces annually, enhancing its exposure to precious metals [25][26] ESG Initiatives - The company advanced its ESG strategy, focusing on renewable energy supply, operational efficiency, and community engagement [27][28] - A structured review of public ESG targets was conducted to enhance transparency and ensure alignment with operational realities [28] Q&A Session Summary Question: Impact of seasonal rains on Aripuanã production - Management confirmed that the rainy season has not significantly impacted production, with expectations to reach full capacity in the second half of the year due to the installation of the fourth filter [34][36] Question: Consideration of additional silver streaming - Management stated that while silver prices are favorable, additional silver streaming is not a current priority, as they are confident in their existing structure [40][42] Question: Update on Cerro Pasco integration project - Management indicated that Phase 2 planning is underway, with no specific date for accessing high-grade reserves at Atacocha, but drilling is ongoing [51][53] Question: Current electoral environment in Peru - Management expressed that while political noise exists, the economic context remains strong, and relationships with local communities are stable [57][59] Question: Debt repayment plans for 2026 and 2027 - Management confirmed that debt repayment remains a priority, with plans to use excess cash for dividends and debt reduction [60] Question: Details on silver and gold hedging program - Management provided details on a small portion of silver production hedged, with a floor around $52 and a cap around $84 [61]