Nexa Resources (NEXA) Q1 2025 earnings summary

Executive summary

• Net revenues reached $627 million in Q1 2025, up 8% year-over-year, despite lower production and sales volumes due to heavy rainfall and operational challenges at key sites.

• Adjusted EBITDA was $125 million, down 3% year-over-year and 36% sequentially, with a margin of 20%.

• Net income reached $29 million, reversing prior losses, supported by foreign exchange gains and cost discipline.

• Company remains focused on cost control, operational improvements, and advancing strategic projects like Cerro de Pasco integration and Aripuana expansion.

• Guidance for FY25 reaffirmed, with improved performance expected in both mining and smelting segments.

Financial highlights

• Net revenues increased 8% year-over-year, driven by higher metal prices, but declined 15% sequentially due to lower sales volumes and prices.

• Adjusted EBITDA margin was 20%, within historical range; gross profit was $127 million, up from $88 million in 1Q24.

• Free cash flow was negative $226 million, mainly due to a $265 million negative working capital impact, including a $61 million one-off tax payment.

• Total cash stood at $401 million, with net debt at $1,488 million and net debt/LTM Adjusted EBITDA at 2.1x.

• Average debt maturity extended to 8 years after new $500 million bond issuance.

Outlook and guidance

• 2025 production and sales guidance reaffirmed for all metals and segments; 2Q25 expected to see higher mining and smelting volumes as weather improves.

• Leverage expected to return to or below 2024 levels by year-end as working capital normalizes.

• CapEx guidance for 2025 remains at $347 million, with disbursements to accelerate.

• Exploration and project evaluation guidance reaffirmed at $88 million for 2025.

• Market fundamentals for zinc, copper, and silver remain strong due to low inventories and energy transition demand.