Nexa Resources (NEXA) Q4 2021 earnings summary

Executive summary

• Record 2021 results: net revenue of US$2.6bn, up 34% YoY; adjusted EBITDA of US$704m versus US$403m in 2020; net income of US$156m after a US$653m loss in 2020, which included non-cash impairment effects.

• Production guidance was achieved across metals, and sales reached 619kt, up 6% YoY; Aripuanã construction advanced toward planned Q3 2022 startup.

Financial highlights

• Net revenue was US$2.6bn, up 34% YoY, driven by better international metal prices and higher sales volumes.

• Adjusted EBITDA reached a record US$704m, compared with US$403m in 2020; net income was US$156m versus a net loss of US$653m in 2020, affected by non-cash impairment accounting effects.

• Capital expenditures were US$508m; mineral exploration and project development investment, including technology, totaled US$85m.

• Covid-19 health measures and community support cost US$18m in 2021.

Outlook and guidance

• 2022 metal sales at the midpoint of guidance were expected to decline 7% YoY, with lower production in Peru and Brazil; consolidated production for 2022–2024 was expected to be 30kt below historical levels.

• A relevant Peruvian partner’s closure and a temporary Vazante production reduction were expected to constrain smelter supply in 2022.

• Aripuanã commercial production was scheduled for Q3 2022; revised project capex was US$625m, with heavy rains and Covid protocols pressuring costs and schedule.

• Strong demand for products was expected to continue in 2022; strategic priorities included cash generation, operational performance, growth projects—especially copper—and sustainability.