Nexa reached US$ 667 million in consolidated net revenue in the first quarter of 2023.
Adjusted EBITDA for the first quarter increased 11% compared to the last quarter of 2022.
Production levels at Nexa’s newest mine in Aripuanã (MT) continue evolving.
In its Três Marias smelting operation, in the state of Minas Gerais, the company started tests of a technology for disposal of dry waste at the plant on an industrial scale.
Nexa, one of the five largest zinc mining companies in the world, closed the first quarter of 2023 with a production of 75,000 tons of zinc from its mining operations, an increase of 13% compared to the same period last year. This result is due to the increase in the volume of ore treated and the higher average grade of zinc generated in the Cerro Lindo and El Porvenir operations, in Peru. Compared to the fourth quarter of 2022, zinc production was relatively stable, with a slight decrease of 0.1% (74.9 thousand tons).
In addition to the growth in zinc production, there was an increase in total lead production with 15.2 thousand tons, 22% higher than in the first quarter of 2022; in the same period, 2.4 million ounces of silver were produced, 9% more; and 6,500 ounces of gold, up 1% this quarter. On the other hand, copper production had a drop of 11%, with 6.1 thousand tons.
In the quarter, sales of metallic zinc and zinc oxide, products from smelter operations, reached 143.8 thousand tons, accounting for an increase of 7% compared to the same period of last year. Compared to the last quarter, sales dropped 14% due to lower seasonality in demand for products in the period.
“We start 2023 in the context of a challenging and volatile external environment, led by China’s recent economic recovery, the ongoing Russia-Ukraine war and the persistent inflationary pressures that affect us. We generated sound results despite the external events that temporarily impacted our operations, including unusual heavy rains and overflowing rivers caused by Cyclone Yaku, which affected some areas of Peru, including the region where our Cerro Lindo mine is located. Looking ahead to the next few months, we continue to move forward towards completing the ramp-up phase at Aripuanã, which will contribute to improving our operational profile and our cash generation capacity”, highlights Ignacio Rosado, CEO of Nexa.
Net revenue for this quarter was US$ 667 million, accounting for a decrease of 7% in relation to the first quarter of last year, due to lower LME (London Metal Exchange) metal prices, partially offset by higher sales volumes. Compared to the fourth quarter of 2022, there was a 14% decrease in net revenue. As a result, the company’s net loss was US$ 15 million in the quarter, compared to the US$ 81 million recorded in the fourth quarter of 2022 and the net income of US$ 74 million in the first quarter of last year.
Adjusted EBITDA for the quarter totaled US$ 133 million, down from US$ 217 million in the first quarter of last year, but up from US$ 120 million in the fourth quarter of 2022, which accounts for an increase of 11%. This increase is explained by changes in market prices, resulting in positive adjustments in the quotation period, positive inventory effect in the foundry segment, lower maintenance and service expenses and reversal of slow-moving inventory recorded in the last quarter.
CAPEX investments are expected to reach US$ 310 million in 2023
In this first quarter, Nexa invested US$ 56 million in sustaining its operations, including US$ 15 million in the Aripuanã mine, in the state of Mato Grosso. Investment disbursements are expected to accelerate in the coming quarters. In the same period, the amount of US$ 21 million was invested in exploration and project evaluation, focusing on the long-term strategy, which is to maintain efforts to replace and increase the company’s mineral reserves and resources and advance with the ESG strategy.
Continuity of operations at the Aripuanã mine
The activities at the Aripuanã (MT) unit are focused on constantly increasing the plant’s production rate, as well as asset reliability, concentrate grades and ore quality. In January and February, the plant reached 57% of its nominal capacity, compared to 53% generated in the last quarter.
In March, the company decided to carry out operational adjustments after the rainy season, in addition to optimizing the detailed plant monitoring. Such measures will contribute significantly to the overall performance of the asset and, consequently, to the stabilization of production, aiming to reach nominal capacity in the second semester of this year.
Nexa advances in the ESG (Environmental, Social and Governance) pillars
In February, the company advanced in testing, on an industrial scale, of the disposal of dry waste at the Três Marias unit. The purpose of such initiative is to filter the waste generated for subsequent disposal in the dry stacking process. Initial results were positive with the expectation of filtering 85% of the material from the operation by the end of 2023.
Another highlight is the project “Gente Cuidando das Águas” (People Taking Care of Water) in Vazante, in the Northwest region of Minas Gerais, the only Brazilian project among the 200 presented at the Regional Water Dialogue, organized by the United Nations Economic Commission for Latin America and the Caribbean. The initiative aims to recover water sources in the Santa Catarina river basin by sealing off areas and activities related to environmental education in schools and surrounding communities. Since 2018, 140 springs have been protected.
Also in April, Renata Penna was promoted to the position of Legal and Governance Vice-President at Nexa, who joined the company as Chief Legal Advisor and Head of Governance in 2017. In this sense, Nexa remains committed to improving the diversity of its gender in leadership, aligned with the business strategy and objectives to promote a more pluralistic culture.