Nexa Resources (NEXA) Q4 2022 earnings summary

Executive summary

• 2022 net revenue reached $3.034 billion, up 16% YoY, and adjusted EBITDA set a record at $760 million amid global economic and operating pressures.

• Aripuanã began operating in July, with commercial production starting in November; the year also brought a new purpose, organizational restructuring, and expanded ESG commitments.

• The 2023 priority is cash generation to support business stability and financial health.

Financial highlights

• Net revenue was $3.034 billion in 2022, up 16% YoY, primarily due to higher LME zinc prices.

• Adjusted EBITDA was a record $760 million, compared with $744 million in 2021 and $419 million in 2020.

• Net income for 2022 was $631.6 million, versus $156.1 million in 2021 and a $652.5 million loss in 2020.

• CAPEX was $381 million, down from $508 million in 2021; mineral exploration investment was $44 million.

Outlook and guidance

• Aripuanã full-scale production is expected in H2 2023; the operation had 600,000 tonnes of ore stockpiled at year-end 2022 to support the estimated four-month ramp-up.

• At full capacity, Aripuanã is expected to average annual output of 70,000 tonnes of zinc, 24,000 tonnes of lead, 4,000 tonnes of copper, 1.8 million ounces of silver, and 14,500 ounces of gold over an 11-year mine life.

• The 2023 focus is cash generation, business stability, and financial health.

• ESG targets include a 20% absolute reduction in Scope 1 emissions by 2030, net neutrality by 2040, and net zero by 2050; Aripuanã is excluded from the baseline but included in the reduction target.