Nexa Resources S.A. (NEXA): history, ownership, mission, how it works & makes money

A Brief History of Nexa Resources

Nexa Resources S.A. (Nexa BR) has undergone significant developments as of 2024, reflecting its strategic initiatives and financial maneuvers. The company is primarily involved in mining and smelting operations, focusing on zinc and copper production.

Financial Performance Overview

In the nine-month period ending September 30, 2024, Nexa reported net revenues of USD 2,025,563 thousand, an increase from USD 1,943,356 thousand in the same period of 2023. The gross profit for this period was USD 394,773 thousand, compared to USD 229,698 thousand in the previous year.

Debt and Financing Activities

In 2024, Nexa engaged in several financing transactions to optimize its capital structure. Key activities included:

• Issuance of a debenture for BRL 650,000 (approximately USD 130,099) with an annual interest rate of CDI plus 1.50% p.a.
• Completion of a bond offering amounting to USD 600,000 at an interest rate of 6.75% per year.
• Drawing from an ESG-linked credit line worth BRL 200,000 (approximately USD 40,030), maturing in March 2032.

Operational Highlights

Nexa's operational performance was impacted by several strategic decisions:

• Suspension of mining operations at the Morro Agudo Complex, effective May 1, 2024.
• Sale of Morro Agudo and Ambrosia mines for approximately BRL 60,565 (USD 10,895).

Market Dynamics and Challenges

The company faced challenges due to fluctuations in commodity prices. In September 2024, Nexa recognized a reduction of USD 21,084 related to its silver stream revenue, reflecting adjustments based on updated mining plans and market conditions.

Balance Sheet and Liquidity Position

As of September 30, 2024, Nexa's total liabilities were reported at USD 1,863,344 thousand, with significant components including:

These figures highlight Nexa's ongoing commitment to managing its financial obligations while pursuing growth opportunities in the mining sector.

A Who Owns Nexa Resources S.A. (NEXA)

Ownership Structure

Nexa Resources S.A. (NEXA) is predominantly owned by Votorantim S.A., which holds a significant 64.68% of its equity. Votorantim S.A. is a Brazilian privately-owned industrial conglomerate with diversified interests in various sectors including metals, steel, cement, and energy.

Shareholder Details

As of September 30, 2024, the details of the major shareholders are as follows:

Stock Performance

The stock price of Nexa Resources S.A. as of the end of September 2024 was approximately USD 7.50 per share, reflecting a significant change in valuation from the previous year. The market capitalization at that time was around USD 993 million.

Financial Overview

For the nine-month period ended September 30, 2024, Nexa Resources reported net revenues of USD 2,025.56 million, compared to USD 1,943.36 million for the same period in 2023. The company had a gross profit of USD 394.77 million in 2024.

Recent Developments

During the nine-month period ended September 30, 2024, Nexa undertook various financing activities, including a bond offering of USD 600 million at an interest rate of 6.75% per year, which was utilized to manage its debt profile effectively.

Debt Structure

As of September 30, 2024, Nexa's total debt was reported at USD 1,863.34 million.

Market Position

Nexa Resources operates large-scale, mechanized underground and open-pit mines, and is involved in smelting operations, primarily in Brazil and Peru. The company has established itself as a significant player in the mining sector, particularly in the production of zinc and copper.

Nexa Resources S.A. (NEXA) Mission Statement

Company Overview

Nexa Resources S.A. is a public limited liability company incorporated in Luxembourg, primarily engaged in the mining and smelting of zinc and other metals. The company operates large-scale underground and open-pit mines, alongside smelting operations in Peru and Brazil.

Mission Statement

Nexa Resources aims to be a leader in the sustainable production of metals, committed to operational excellence, environmental stewardship, and social responsibility. The mission emphasizes innovation and efficiency in mining practices, while fostering a culture of safety and respect for local communities.

Financial Performance Indicators

Operational Highlights

Nexa operates three polymetallic mines in Peru and two in Brazil, with a focus on sustainable practices. The company has made significant investments in technology and innovation to enhance productivity and reduce environmental impact.

Strategic Goals

• Enhance operational efficiency through technological advancements and innovation.
• Commit to sustainability and responsible mining practices, minimizing environmental impact.
• Engage and support local communities through social responsibility initiatives.
• Achieve financial stability and growth through strategic investments and cost management.

Recent Developments

In 2024, Nexa entered multiple financing agreements, including:

• A EUR 27,917,000 note agreement at a gross interest rate of 5.6% p.a.
• A BRL 650,000,000 debenture issuance with an interest rate of CDI plus 1.50% p.a.
• A USD 600,000,000 bond offering at an interest rate of 6.75% per annum.

Environmental and Social Governance (ESG) Initiatives

Nexa Resources is committed to ESG principles, focusing on:

• Reducing greenhouse gas emissions.
• Enhancing community engagement and support.
• Implementing sustainable mining practices.

Conclusion

Nexa Resources S.A. is dedicated to achieving its mission through a focus on sustainability, innovation, and community engagement, driving growth while maintaining a commitment to environmental stewardship and social responsibility.

How Nexa Resources S.A. (NEXA) Works

Corporate Overview

Nexa Resources S.A. operates as a mining and metals company, focusing primarily on the production and sale of zinc, copper, lead, and other minerals. The company is headquartered in Luxembourg and has significant operations in Brazil and Peru.

Financial Performance

For the nine-month period ended September 30, 2024, Nexa reported net revenues of USD 2,025,563 thousand, compared to USD 1,943,356 thousand in the same period of 2023. This represents an increase driven by higher sales volumes and improved prices for metals.

Production Statistics

Nexa's production activities are segmented into mining and smelting. For the nine-month period ended September 30, 2024, the company reported the following production metrics:

Cost Structure

In the nine-month period ended September 30, 2024, Nexa's cost of sales amounted to USD 1,630,790 thousand, resulting in a gross profit margin of approximately 19.5%.

Debt and Financial Obligations

As of September 30, 2024, Nexa's total debt was reported at USD 1,863,344 thousand, with a maturity profile as follows:

Market Position and Strategy

Nexa Resources focuses on sustainability and operational efficiency. The company is committed to reducing greenhouse gas emissions and improving its ESG (Environmental, Social, and Governance) performance. As of 2024, Nexa has set ambitious targets for reducing emissions and enhancing community engagement.

How Nexa Resources S.A. (NEXA) Makes Money

Revenue Streams

Nexa Resources S.A. generates revenue primarily through its mining and smelting operations. The company is involved in the extraction and processing of zinc, copper, lead, and silver, which are sold in various forms including concentrates and refined metals.

Cost of Sales

The cost of sales includes expenses related to raw materials, labor, and overhead associated with the mining and smelting processes. For the nine-month period ending September 30, 2024, the cost of sales amounted to $1,630,790, compared to $1,713,658 for the same period in 2023, reflecting a decrease of 4.8%.

Gross Profit and Operating Income

For the nine-month period ending September 30, 2024, Nexa reported a gross profit of $394,773, an increase from $229,698 in 2023, indicating improved operational efficiency. The operating income for the same period was $154,683 compared to an operating loss of $74,902 in the previous year.

Adjusted EBITDA

The Adjusted EBITDA for the nine-month period ending September 30, 2024, was reported at $517,425, compared to $296,213 in 2023. This significant increase reflects the company's efforts to optimize costs and enhance operational performance.

Net Financial Results

For the nine-month period ending September 30, 2024, Nexa reported net financial results of $(227,858), which is an increase in losses compared to $(133,603) in 2023. This reflects higher financial expenses, particularly due to interest on loans and financing.

Net Income

Nexa Resources S.A. reported a net loss of $(76,012) for the nine-month period ending September 30, 2024, compared to a net loss of $(183,051) in the same period of the previous year. The reduction in net loss indicates an improvement in the company's overall financial health despite ongoing challenges.

Debt Management

Nexa has various financing arrangements, including Eurobonds and loans from BNDES. As of September 30, 2024, total loans and financing amounted to $1,863,344, with an average interest rate of 6.43% for Eurobonds and varying rates for other credits.

Updated on 16 Nov 2024

Resources:

1. Nexa Resources S.A. (NEXA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Nexa Resources S.A. (NEXA)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Nexa Resources S.A. (NEXA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.