• Adjusted EBITDA (Q4 2024): $197 million, a 79% increase year over year.
• Adjusted EBITDA (Full Year 2024): $714 million, a 76% increase compared to 2023.
• Net Leverage Ratio: Improved from 2.2 times in Q3 to 1.7 times in Q4 2024.
• Net Revenues (Q4 2024): $741 million, up 18% year over year.
• Net Revenues (Full Year 2024): $2,766 million, an 8% increase compared to 2023.
• Mining Cash Cost (Q4 2024): $0.00 per pound, down from $0.44 per pound in the same period last year.
• Smelting Sales (Q4 2024): 152,000 tons, a 6% increase year over year.
• Smelting Cash Cost (Q4 2024): $1.26 per pound, up from $1 per pound in the same period last year.
• CapEx (Full Year 2024): $277 million, primarily for sustaining activities.
• Free Cash Flow (Full Year 2024): $163 million.
• Available Liquidity (End of 2024): Approximately $960 million.
• Average Debt Maturity (Q4 2024): 5.6 years with an average cost of 6.4%.
• Zinc Production (Q4 2024): 74,000 tons, down 19% year over year.
• Aripuana Zinc Production (Full Year 2024): Increased by 43% compared to 2023.

• Warning! GuruFocus has detected 4 Warning Signs with NEXA.

Release Date: February 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nexa Resources SA (NYSE:NEXA) achieved the second highest adjusted EBITDA in its history, with a total of $714 million for 2024.
• The company reported a significant improvement in its financial position, including an increase in cash balance and a reduction in gross debt.
• Nexa Resources SA (NYSE:NEXA) successfully executed strategic divestments, allowing it to focus on high-return assets.
• The Cerro Pasco integration project has been officially approved, which is expected to extend the life of the mining complex.
• The company maintained a strong liquidity position with approximately $960 million available, including an undrawn $320 million sustainability-linked revolving credit facility.

Negative Points

• Zinc production decreased by 11% quarter over quarter, primarily due to lower output at several mines.
• The Aripuana project faced challenges, including a bottleneck in tailings filters, delaying full production capacity until 2026.
• Smelting costs increased to $1.26 per pound, up from $1 per pound in the same period last year, due to higher raw material costs.
• The company experienced volatility in working capital, with significant swings throughout the year.
• The Magistral project faced setbacks, with its environmental impact study disapproved, leading to ongoing negotiations with authorities.

Q & A Highlights

Q: Can you provide quantitative estimates for Aripuana's contribution to cash flow and details on the tailing filter's CapEx and capacity increase? A: The total CapEx for the Cerro Pasco project is around $140 million, with $85 million for the pumping system from El Porvenir to Atacocha. The Aripuana project has faced challenges, mainly due to tailings filter capacity. The new filter, costing $14 million, will be installed by the end of the year, with commissioning in Q1 2026. This will allow Aripuana to reach full capacity, improving cash flow and EBITDA in 2025 compared to 2024.

Q: Can you confirm if Aripuana will have positive EBITDA in 2025, and how does the new dividend policy work? A: Yes, Aripuana is expected to have positive EBITDA in 2025, higher than in 2024, due to increased production and lower costs. The new dividend policy involves paying 20% of free cash flow, with a minimum of $0.08 per share, based on cash from operations minus sustaining CapEx.

Q: What is the expected sustaining CapEx for 2025, and how should we think about working capital volatility? A: The sustaining CapEx for 2025 is expected to be $316 million. Working capital effects should be close to neutral on an annual basis, despite quarterly volatility similar to previous years.

Q: Are there any plans to sell additional assets, and what is the status of the Magistral project? A: There are no plans to sell additional assets as the focus is on developing existing mines. The Magistral project's environmental impact study was disapproved, and discussions with the government are ongoing. The project must compete with other potential projects for development.

Q: What are the expectations for cash flow generation in 2025, and what are the capital allocation plans? A: Cash flow generation is expected to improve in 2025, driven by better operational performance and cost control. Capital allocation will focus on extending mine life, reducing gross debt, and providing consistent shareholder returns through the new dividend policy.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.