The following is a summary of the Nexa Resources S.A. (NEXA) Q3 2024 Earnings Call Transcript:
Financial Performance:
Nexa Resources reported a strong quarter with total consolidated net revenues of $709 million, up 9% year-over-year, largely due to higher average LME prices.
Adjusted EBITDA was $183 million, 111% higher than the previous year's same quarter, with an EBITDA margin around 26%.
A decrease in net leverage ratio to 2.2, an improvement from previous quarters.Due to enhanced operational performance and high zinc prices, they have reduced their net leverage and improved their financial stability.
Business Progress:
Completed the sale of the Pukaqaqa greenfield project and a non-operational Peruvian subsidiary as part of their portfolio optimization strategy.
Advancements in the Cerro Pasco integration project, including the initiation of a tailings pumping system, are expected to prolong operational capabilities and conserve capital on high-return assets.
Achieved significant progress at the Aripuanã mine with increased treated ore volumes and subsequent EBITDA growth, despite facing some operational challenges.
Opportunities:
Continued tightness in the supply market for zinc presents an opportunity for sustained high prices, which Nexa is well-positioned to capitalize on.
Expansion initiatives like the Cerro Pasco project and enhancements at Aripuanã indicate a strategic focus on long-term production capability and efficiency.
Risks:
Discussed operational challenges including the need for an additional tailings filter at Aripuanã which limits the mine's capacity, restricting it to 90% throughout 2025.
Persistent negative TCs (Treatment and Refining Charges) in the market may impose financial pressures, prompting potential production cuts if unprofitable.
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