Nexa Resources (NEXA) Q4 2024 earnings summary

Executive summary

• Achieved second-highest annual Adjusted EBITDA of US$714M, with net revenues up 18% in Q4 and 8% for the year, and first positive consolidated free cash flow since Aripuanã investment cycle.

• Net debt/Adjusted EBITDA improved to 1.7x at year-end from 2.2x in Q3 and 3.3x in 2023, reflecting deleveraging and higher cash balance.

• Strategic divestments completed, including Morro Agudo, Pukaqaqa, and Chapi, with focus on high-return assets and portfolio optimization.

• New dividend policy adopted, targeting up to 20% of free cash flow with a minimum of US$0.08 per share.

• Investment grade ratings reaffirmed by S&P and Fitch, with stable outlook.

Financial highlights

• Q4 Adjusted EBITDA: US$197M, up 79% year-over-year; full year Adjusted EBITDA: US$714M, up 76%, with margin improving to 26%.

• Q4 net revenues: US$741M, up 18% year-over-year; full year net revenues: US$2,766M, up 8%.

• Free cash flow for 2024 reached US$163M, reversing negative FCF in 2023.

• Available liquidity at year-end: US$960M, including undrawn US$320M credit facility.

• Capex for 2024 was US$277M, mainly sustaining, below revised guidance due to portfolio optimization.

Outlook and guidance

• 2025 focus on increasing treated ore volumes, improving recoveries, and further cost optimization at Aripuanã, with full capacity expected in 2026 after new filter installation.

• Sustaining CapEx for 2025 guided at US$316M.

• Working capital effects expected to be neutral annually, with quarterly volatility.

• Exploration to remain focused on extending life of mine at key assets, with continued drilling at Integración and Cerro Lindo.

• Dividend policy effective from 2024 results, with up to 20% of free cash flow after sustaining CapEx.