Nexa Resources S.a. · NYSE:NEXA
Nexa Resources — Q3 2022 Earnings Presentation
12 slides from Nexa Resources's earnings presentation, Oct 27, 2022
Slide 1: Nexa Reports Third Quarter 2022 Results including Adjusted EBITDA of US$103 Million
US$ million (except per share amounts) 3Q22 3Q21 9M22 9M21 Nexa Reports Third Quarter 2022 Results including Adjusted EBITDA of US$103 Million Luxembourg, October 27, 2022 – Nexa Resources S.A. (“Nexa Resources”, “Nexa”, or “Company”) announces today its results for the three and nine months ended S
Slide 2: 2022 production is tracking towards the low end of the guidance range
2022 production is tracking towards the low end of the guidance range and continues to be subject to risks around the ramp-up of a new mine, among other factors.
Slide 3: Compared to 2Q22, Adjusted EBITDA decreased by 64%
Compared to 2Q22, Adjusted EBITDA decreased by 64% mainly driven by (i) lower LME prices and changes in market prices that result in MTM adjustments of US$106 million; (ii) net negative hedge effect of US$18 million - primarily due to hedge mark-to-market adjustments resulting from lower LME prices
Slide 4: Adjusted EBITDA reconciliation to net income
US$ million 3Q22 2Q22 3Q21 9M22 9M21 During 9M22, adjusted EBITDA was US$598 million compared with US$568 million in the same period a year ago, driven mainly by higher zinc LME prices as well as changes in market prices due to MTM adjustments, and by-products contribution; partially offset by (i) h
Slide 5: Cost of sales in 3Q22 of US$193 million were relatively flat
Cost of sales in 3Q22 of US$193 million were relatively flat compared to 3Q21. Compared to 2Q22, cost of sales decreased by 10% mainly driven by lower operating costs due to lower volumes mined and treated, royalties, and workers’ participation provision. Run of mine mining cost in 3Q22 was relative
Slide 6: Compared to 2Q22, adjusted EBITDA also decreased
Compared to 2Q22, adjusted EBITDA also decreased. This decrease was mainly driven by (i) the negative price effect related to lower base metal prices and changes in market prices that result in MTM adjustments for a total amount of US$70 million; (ii) US$25 million due to lower sales volumes; and (i
Slide 7: Consolidated cash cost and AISC
Consolidated cash cost 3Q22 2Q22 3Q21 3Q22 vs. 3Q21 9M22 9M21 9M22 vs. 9M21 Cash cost and AISC 5 , 6 Cash cost net of by-products US$/t 1,267 156.6% 55.5% AISC net of by-products US$/t 2,115 1,213 1,205 75.5% 1,551 1,154 34.4% Cash cost net of by-products US$/lb 0.57 0.16 0.22 156.6% 0.31 0.20 55.5%
Slide 8: Zinc concentrate treatment charges
Zinc concentrate | treatment charges The smelters use zinc concentrate as feedstock, which is supplied from our mines and from third-party suppliers. In 3Q22, Nexa acquired 48% of zinc concentrate from our own mines, with the remainder supplied by third parties. Sources of Zinc Concentrate to Nexa S
Slide 9: Compared to 2Q22, adjusted EBITDA decreased by US$81 million
Compared to 2Q22, adjusted EBITDA decreased by US$81 million, mainly driven by (i) the net negative price effect of US$60 million related to lower zinc prices and changes in market prices that result in MTM adjustments ; and (ii) the net negative hedge effect of US$18 million, as previously explaine
Slide 10: Conversion cost, Cash cost and AISC
Consolidated 3Q22 2Q22 3Q21 3Q22 vs. 3Q21 9M22 9M21 9M22 vs. 9M21 Conversion cost, Cash cost and AISC 7 Smelting conversion cost US$/t 13.9% 32.3% Cash cost net of by-products US$/t 3,007 3,213 2,558 17.5% 3,065 2,377 28.9% AISC net of by-products US$/t 3,230 3,487 2,773 16.5% 3,298 2,544 29.6% Smel
Slide 11: Nexa's balance sheet remains solid, and liquidity remains strong
Nexa’s balance sheet remains solid, and liquidity remains strong. Cash and cash equivalents and financial investments (“total cash”) amounted to US$538 million at September 30, 2022, 15% lower compared to June 30, 2022, mainly driven by the continued investment over the quarter in excess of operatin
Slide 12: Only 1.2% (US$21 million) of the total debt matures in 2022
Only 1.2% (US$21 million) of the total debt matures in 2022, 13% (US$223 million) matures between 2023 and 2026, while 85% (US$1,407 million) of total debt matures after 2027. Financial leverage, measured by the ratio of net debt to adjusted EBITDA of the last twelve months, increased to 1.52x at Se