Nexa ended the third quarter with consolidated net revenues of US$703 million, an increase of 7% compared to the same period of last year, driven by higher LME (London Metal Exchange) zinc price, metal sales and lead volume.

Zinc production reached 76 thousand tons in the quarter, a decrease of 4.8% compared to the same period of last year, due to the expected lower volumes processed and lower zinc head grade at the Cerro Lindo mine (Peru). Copper production followed the same trend and reached 7.4 thousand tons, a decrease of 5%. However, lead production increased by 41%, reaching 15.3 thousand tons. Moreover, sales of zinc metal, products with higher added value, reached 162 thousand tons, 4% higher than in the third quarter of 2021.

Despite the increase in net revenues, adjusted EBITDA decreased to US$ 103 million compared to US$155 million in the same period of the previous year, due to the lower performance of the mining and smelting segments. This reduction was mainly explained by higher raw material costs in the smelting business, higher operating costs, such as energy and third-party services, reflecting inflationary costs pressure, and pre-operating expenses at the Aripuanã mine (Mato Grosso), which is in the ramp up phase.

According to Nexa’s CEO, Ignacio Rosado, “Although we believe the fundamental value for zinc will be strong in the coming months, given low inventory levels and decrease or shutdown of production in smelters in Europe, we are taking the appropriate measures to maintain a healthy balance sheet through consistent execution of our cost reduction programs, CAPEX optimization and improved cash flow generation strategy. The adaptability of our organization as well as our operational efficiencies, have helped us overcome obstacles during the pandemic. We expect this resilience to help us navigate the current global macroeconomic challenges that our industry is facing. In 3Q22, we have delivered on production and costs guidance. However, our financial results have been impacted by decrease in metal prices.”

For the quarter, adjusted net loss was US$48 million compared to adjusted net loss of US$9 million in the same period of last year.

Adjusted net income totaled US$141 million from January to September of 2022

From January to September, net revenues reached US$2.2 billion, an increase of 16% compared to the first nine months of 2021, primarily driven by higher LME zinc prices. During the period, zinc production totaled 222 thousand tons compared to 239 thousand tons from last year. Copper production reached 23.9 thousand tons, while lead production was 41.8 thousand tons. In turn, the sales of zinc metal reached 449 thousand tons.

In the first nine months of 2022, adjusted EBITDA reached US$598 million compared to US$ 568 million in the same period of last year. The Company’s adjusted net income reached US$ 141 million, in line with the first nine months of 2021.

Operations at the Aripuanã mine (MT) continue progressing positively

The Company announced the ramp up of activities at the Aripuanã mine in July, which continue to focus on progressively increasing the plant throughput rate and the stability of its operational process. The milling capacity utilization reached 32% at the end of the third quarter and we believe we are on track to reach 70% by the end of December 2022.

The first batch of zinc, copper, and lead was successfully produced and commercial production is expected to commence in December 2022. At the end of September, approximately 646 thousand tons of ore were available in stockpiles, which is enough to cover five months of plant production at the processing in the ramp up period.

CAPEX totaled US$265 million in the first nine months of the year

CAPEX estimate remains at US$385 million this year. In the third quarter, Nexa invested US$85 million, totaling US$265 million in the first nine months of the year.

In the exploration and project evaluation, whose focus is to replace and increase mineral reserves and resources, US$64 million was allocated from January to September, in addition to CAPEX. By the end of the year, the total forecast is expected to be US$82 million, thus maintaining the guidance previously announced to the market.

Company announces ESG targets and commitments

In line with the Paris Agreement and focused on reducing the impacts of climate change, Nexa   announced its new long-term ESG commitments. The targets include to achieve the greenhouse gas neutrality – the balance between carbon emissions and absorption – by 2040 and the net zero target by 2050.

The eight long-term commitments are segmented into four main topics: reduction of emissions and neutrality; safety; water use and discharge; and plurality. For further information, please visit our website Nexa ESG.


São Paulo, October 27, 2022.