|Nexa Announces 3rd Quarter Results
– Nexa, one of the world’s largest producers of zinc, reached US$655 million in consolidated net revenue in the third quarter of 2021, an increase of 22% compared to the same period a year ago.
– Adjusted EBITDA reached US$155 million in the third quarter, up 2% compared to the third quarter of 2020.
– In November, the CEO transition process is set to begin, as of January 1, 2022, Ignacio Rosado will replace Tito Martins.
Nexa ended the third quarter with a consolidated net revenue of US$655 million, an increase of 22% compared to the same period of the previous year. The main factors that contributed to this performance were the better prices in the international market and by-products contribution. In the first nine months of 2021, net revenue of US$1.9 billion was up 48% year-over-year, also driven by higher metal prices and volumes.
Zinc production of 80 thousand tonnes in the quarter decreased 2% compared to the third quarter of 2020, while copper production reached 8 thousand tonnes, an increase of 1% compared to the same period a year ago. Lead production increased by 5% in the quarter, reaching 11 thousand tonnes compared to the third quarter of 2020. Regarding our smelter segment, metal sales were 156 thousand tonnes, down to 2% year-over-year, mainly driven by lower production volumes. From January to September, zinc production totaled 239 thousand tonnes, copper 23 thousand tonnes and lead 33 thousand tonnes, while metal sales reached 460 thousand tonnes, an increase of 9% compared to the same period a year ago.
Adjusted EBITDA was US$ 155 million compared with US$ 152 million. In the first nine months of 2021, Adjusted EBITDA was US$ 568 million, 141% higher compared to the first nine months of 2020.
In the third quarter, net loss totaled US$ 9 million, against a loss of US$ 36 million in the third quarter of 2020. From January to September, net income was US$145 million compared to a net loss of US$ 706 million in the same period a year ago.
“Our operational performance in the quarter was affected by planned and unplanned shutdowns in our mining and smelting segments, resulting in lower volumes. Despite the production disruptions, we have continued to operate our assets safely and we are on track to meet our annual guidance. As we recently announced, we will begin my transition process during this quarter. It has been an honor and privilege to lead this company as CEO for nearly a decade. Throughout my career path at Nexa, I have witnessed the remarkable evolution of the company and the expansion of its operations in both segments. We are close to deliver our first world-class greenfield project, Aripuanã (MT), and we have made significant strategic shifts across the business. I am proud of what our company has become today, and I believe we are on the right track to build the mining company of the future”, says Nexa’s CEO, Tito Martins.
The Nexa Way Program, initiated in mid-2019, aimed to structurally improve the business model and cultural transformation, which continues to bring positive results for the business. Since then, we implemented initiatives that we expected would generate at least US$180 million in annualized recurring impact on the company’s EBITDA by the end of 2021. However, these initiatives have already exceeded expectations, generating an estimated annualized impact on EBITDA of US$191 million.
In relation to the measures used to combat COVID-19, US$ 4 million was dedicated in the quarter for the continuity of health protocols in operations, management of the impacts generated by social distancing and support to host communities. In the first nine months of 2021, COVID-19 related costs amounted to US$13 million.
CAPEX totaled US$ 344 million in the first nine months of 2021
The estimated Capex for 2021 remains unchanged at US$510 million, as previously disclosed. A higher disbursement in the fourth quarter 2021 is estimated compared to the previous quarters due to mine development, mine equipment purchase, planned maintenance shutdown at the Três Marias smelter, among other less material events.
Nexa’s investments totaled US$ 344 million from January to September, of which US$ 186 million towards expansion projects, mainly driven by the development of the Aripuanã project (US$177 million). In October, Nexa received the operating license for the Aripuanã project (MT). This completes all major permitting required for operations.
The project´s overall progress reached 96.5% at the end of September 2021, while mechanical completion is expected in the fourth quarter. The first production is estimated at the end of the first quarter of 2022.
Investments in mineral exploration and project evaluation totaled US$49 million in the first nine months of 2021 and expected guidance for the year of US$71 million also remains unchanged, as such investments are expected to pick up during the fourth quarter 2021 partially compensating the COVID-19 slower the pace of previous quarters.
Nexa advances in its plurality program
In the quarter, one of the highlights was the evolution of the company’s plurality program. In August, Nexa received the Women on Board certificate, which is an independent initiative that seeks to recognize and value the existence of corporate environments with the presence of women on boards of directors or advisory boards in order to highlight the benefits of this diversity to the business world and to the society.
Furthermore, Nexa also launched the Plural Talent Program for the admission and training of professionals with disabilities and/or special needs, which are graduated or will graduate by 2022. There are 15 positions in several areas and these professionals will join Nexa in December 2021.
One last highlight is the enhancing supplier assessment program to include reviews of ESG indicators and best practices. The program is expected to begin in November 2021.
Nexa Resources is one of the world’s largest producers of zinc, and also 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 office in Luxembourg, supplying its products to every continent on the planet. Its employees work every day focused on building the future of mining, in order to be increasingly sustainable and innovative, with the best safety practices and respect for people and the environment. Since 2017, its shares of stock have been traded on the New York and Toronto Stock Exchanges, and its majority shareholder is Votorantim S.A. For more information on Nexa or our full Earnings Release 3Q21, visit www.nexaresources.com.
São Paulo, October 28, 2021.