– Nexa, one of the world’s largest zinc producers, achieved US$2.6 billion of consolidated net revenue in 2021, an increase of 34% over the previous year.
– Adjusted EBITDA reached a record-high of US$704 million in the year, accounting for an increase of 75% compared to the previous year.
– The works on the Aripuanã project are in the stage of completion, and start-up is scheduled for the third quarter of 2022.
Better prices in the international market and higher volumes traded boosted Nexa’s performance for the year, which ended the year with consolidated net revenue of US$2.6 billion, accounting for an increase of 34% over the previous year. In 2021, the production reached 320kt of zinc, 30kt of copper, 46kt of lead and 8.8 million ounces of silver, reaching the production guidance disclosed to the market. Over the 12 months, sales of metallic zinc and zinc oxide totaled 619kt also achieved guidance and were 6% higher than the previous year due to the robust global demand and the recovery of domestic markets where the company operates, as well as higher production.
Considering this scenario, Adjusted EBITDA in 2021 reached a record level, totaling US$704 million, compared to US$403 million in the previous year. Moreover, net income for the year totaled US$156 million, compared to a net loss of US$653 million in 2020, which was affected by impairment due to non-cash accounting effects in the period last year.
In the fourth quarter of 2021, the Company’s performance was also positive. The net revenue totaled US$678 million, accounting for an increase of 7% in relation to the fourth quarter of 2020. The production for the period reached 81kt of zinc, 7kt of copper and 13kt of lead. Meanwhile, metal sales totaled 158kt. As a result, adjusted EBITDA reached US$136 million and net income totaled US$11 million in the quarter.
“In this my first earnings release as CEO of Nexa, I would like to say thank you to Nexa’s Board of Directors for trusting me with this important responsibility and stress my commitment to build on what we have already achieved. I plan to continue promoting an increasingly competitive, agile, and innovative organization with sustainable shareholders returns. Nexa is positioned for continued growth due to its unique position in Latin America, with flagship assets and a robust balance sheet”, says Ignacio Rosado, CEO of Nexa, who took over in January 2022.
Another highlight on the balance sheet refers to the results of the Nexa Way program – the cultural transformation and operational improvement initiative started in the 2nd semester of 2019 – which generated an estimated annualized impact to EBITDA of US$209 million, exceeding the Company’s expectations. The Nexa Way program made a strong contribution to facing the pandemic scenario experienced in the last two years. Nexa understands that the improvements generated by the program are dully embedded in our operation’s daily activities.
Regarding investments to fight COVID-19, Nexa invested US$18 million in the year to adopt sanitary measures and health and safety protocols in all its operations and to support the communities where it operates. Contributions totaled US$4.5 million in the fourth quarter of the year.
Nexa approved the distribution of US$ 50million in dividends and share premium
On March 25, 2022, a distribution of US$50 million is expected to be made to the Company’s shareholders, with US$44 million as a dividend (“Cash Dividend”) and US$6 million as share premium (“Special Cash Dividend”). This represents approximately a Cash Dividend of US$0.331275 per common share and a Special Cash Dividend of US$0.046258 per common share, respectively.
CAPEX investments are expected to reach US$385 million in 2022
For 2022, CAPEX investments are estimated at US$385 million, reflecting inflationary cost pressures on several inputs, such as third-party contracts, equipment, logistics, among others. Regarding the Company’s main ongoing investment, the Aripuanã project, total estimated CAPEX was reviewed from US$575-595 million to US$625 million. In 2021, CAPEX totaled US$508 million compared to the guidance of US$510 million. Of this total, 53% were allocated to expansion projects, especially Aripuanã (US$258 million). Investments in maintenance, such as Health, Safety and Environment, among others, accounted for 47% of total CAPEX in 2021.
Aripuanã is expected to start operating in the third quarter of 2022 and estimated production is approximately 120kt of zinc equivalent per year. Aripuanã aims to increase the integration between the mines and the company’s current smelters. The project is considered one of the most sustainable in Brazilian mining, with dry tailings disposal and reuse of practically all the water used in the production process.
Regarding the investments in mineral exploration and project evaluation, in 2022, Nexa will continue its efforts to expand its reserves and mineral resources, which should add up to an investment of US$64 million in addition to CAPEX. In 2021, exploration expenses amounted to US$58 million, compared to the guidance of US$51 million, mainly driven by greenfield and brownfield exploration programs.
Nexa advances in its social practices and in the diversity initiatives
During the year, Nexa continued to direct its efforts to improve its social, environmental and governance practices (ESG). In 2021, the company continued to support its host communities with respect to COVID-19. Nexa donated oxygen plants and hospital equipment in Peru, and food baskets to vulnerable communities in Brazil. We also made additional contributions (food, toiletries, and cleaning, drinking water, among others) to the communities nearby its operations, which were impacted by the heavy rainfall levels that reached Minas Gerais state in January 2022.
The Company also made an important advance in diversity initiatives. Nexa achieved its gender equity goal of having 16% of its workforce comprised of women (950 employees). According to Women in Mining, this index is higher than the global average of 8%. Another important initiative in 2021 was the Plural Talents Program for the admission and training of disabled professionals. The new employees joined Nexa in December 2021 and will undergo an 18-month training program, working simultaneously in different areas of the company. Employees with disabilities also increased to 169, accounting for 3% of the workforce in the world.
Nexa Resources is one of the world’s largest producers of zinc and produces copper and lead. It has over 60 years of experience in the mining and smelting segments, with operations located in Brazil and Peru and offices in Luxembourg, supplying its products to every continent on the planet. Its employees work every day focused on building the future of mining, to be increasingly sustainable and innovative, with the best safety practices and respect for people and the environment. Since 2017, its shares have been traded on the New York Exchanges, and its majority shareholder is Votorantim S.A. For more information on Nexa or our full Earnings Release 4Q21, visit www.nexaresources.com.
São Paulo, February 15, 2021