NEXA — Nexa Resources S.A.

Nexa Resources S.A. Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Q4 2025 Performance:

  • Net Revenues: $903 million (up 18% sequentially, 22% YoY)
  • Adjusted EBITDA: $300 million (33% EBITDA margin)
  • Net Income: $81 million ($0.38 per share)
  • Free Cash Flow: $51 million
  • Net Leverage: Improved to 1.7x from 2.2x in Q3 2025

• Full Year 2025 Performance:

  • Zinc Production: 316,000 tons (met guidance)
  • Total Metal Sales: 567,000 tons
  • Full Year Net Revenues: $3 billion (up 9% YoY)
  • Adjusted EBITDA: $772 million (26% margin)
  • Net Income: $223 million ($1 per share)
  • Free Cash Flow: -$105 million (reflecting debt reductions and dividends)

2. Strategic Updates and Business Highlights

• Mining Operations:

  • Zinc production in Q4 reached 91,000 tons, with Aripuanã achieving its highest quarterly production to date.
  • Improved operational stability and cost management led to a consolidated mining cash cost of negative $0.58 per pound in Q4.

• Smelting Division:

  • Total zinc sales were 142,000 tons in Q4, but production at Brazilian smelters was constrained by lower demand for zinc oxide.
  • Smelting segment generated $573 million in net revenues for the year.

• Cerro Pasco Integration Project:

  • Preparatory studies for Phase 2 are ongoing, with a focus on maximizing value from the mineral district.
  • The project is expected to enhance profitability and extend the life of the mine.

• Exploration Success:

  • Positive drilling results across key assets, confirming geological potential and supporting future production.

3. Forward Guidance and Outlook

• 2026 Expectations:
  • Anticipated continued operational stability and cash generation, particularly from Aripuanã as it ramps up production capacity with the installation of the fourth filter.
  • Gradual improvement in treatment charges expected due to increasing global mine supply.
  • Focus on maintaining financial discipline and exploring value-accretive opportunities, particularly in copper.

4. Bad News, Challenges, or Points of Concern

• Free Cash Flow: Negative free cash flow of -$105 million for the year reflects significant capital allocation towards debt reduction and dividends.
• Smelting Challenges: Lower production at Brazilian smelters and soft demand for zinc oxide constrained the smelting segment's performance.
• Market Volatility: The company faces potential risks from macroeconomic factors affecting zinc and copper prices, as well as ongoing political instability in Peru, which could impact operations.

5. Notable Q&A Insights

• Aripuanã Production: Management expressed confidence in stabilizing production despite seasonal rainy conditions, with expectations for full capacity in the second half of 2026.
• Silver Streaming: While there is interest in silver, management is not prioritizing additional silver streaming agreements at this time, focusing instead on existing commitments and cash flow generation.
• Cerro Pasco Integration: No specific timeline for accessing high-grade reserves at Atacocha, but ongoing drilling is expected to yield valuable insights in the next couple of years.
• Political Environment in Peru: Management remains cautiously optimistic about the economic context despite political noise, emphasizing strong community relationships and operational stability.

This summary encapsulates Nexa Resources S.A.'s financial performance, strategic initiatives, and outlook while highlighting both opportunities and challenges facing the company.