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% year-over-year)
  • Adjusted EBITDA: $300 million (33% margin)
  • Net Income: $81 million ($0.38 per share)
  • Free Cash Flow: $51 million
  • Net Leverage: Improved to 1.7x from 2.2x in the previous quarter.

• Full Year 2025 Performance:

  • Total Zinc Production: 316,000 tons (met guidance)
  • Total Metal Sales: 567,000 tons
  • Full Year Net Revenues: $3 billion (up 9% from 2024)
  • Adjusted EBITDA: $772 million (26% margin)
  • Net Income: $223 million ($1 per share)
  • Free Cash Flow: Negative $105 million due to debt reductions and dividends.

2. Strategic Updates and Business Highlights

• Mining Operations:

  • Zinc production increased to 91,000 tons in Q4, with Aripuanã achieving its highest quarterly production to date.
  • Cash costs improved to negative $0.58 per pound in Q4, reflecting operational efficiencies.

• Cerro Pasco Integration Project:

  • Preparatory studies for Phase 2 are underway, aiming for a life-of-mine extension of over 15 years.

• Exploration Success:

  • Positive results from exploration programs across key assets, confirming geological potential and supporting future production.

• Smelting Segment:

  • Q4 sales were 142,000 tons, with challenges noted in Brazilian smelters due to lower production and demand for zinc oxide.

3. Forward Guidance and Outlook

• 2026 Expectations:

  • Anticipated gradual improvement in mining supply and treatment charges, with a positive outlook for zinc prices supported by tight inventories.
  • Continued focus on operational stability and cash flow generation, particularly with the ramp-up of Aripuanã's fourth filter expected in mid-2026.

• Debt Management:

  • Commitment to reducing gross debt and enhancing financial flexibility, with plans to use excess cash for debt repayment.

4. Bad News, Challenges, or Points of Concern

• Negative Free Cash Flow:

  • The company reported a negative free cash flow of $105 million for the year, attributed to significant capital expenditures and shareholder distributions.

• Operational Constraints:

  • Lower production at Brazilian smelters and challenges in managing costs amid a tight concentrate supply environment.

• Market Volatility:

  • The company faces uncertainties related to global economic conditions, trade policies, and the impact of political instability in Peru on operations.

5. Notable Q&A Insights

• Aripuanã Production:

  • Management expressed confidence in overcoming seasonal rainy periods, with expectations for production stability and growth in 2026.

• Silver Streaming Agreement:

  • Current silver streaming agreement will step down from 65% to 25% in mid-2026, enhancing Nexa's exposure to silver prices.

• Cerro Pasco Integration Project:

  • No specific timeline for accessing high-grade reserves at Atacocha; ongoing drilling is expected to inform future plans.

• Debt Repayment Strategy:

  • Management indicated that any excess cash generated will be prioritized for debt repayment, reflecting a disciplined financial strategy.

• Political Environment in Peru:

  • Despite political instability, management remains optimistic about the economic context and relationships with local communities, indicating resilience in operations.

This summary encapsulates Nexa Resources S.A.'s financial performance, strategic initiatives, and outlook, while also addressing challenges and insights from the Q&A session.