Nexa Resources S.A. Q1 2026 Earnings Recap

Nexa’s stock dropped 14.3% post-earnings as investors reacted negatively to a cautious outlook underscored by operational disruptions, margin pressure in smelting, and temporary production constraints, despite solid headline EBITDA and higher metal prices.

Key Takeaways

• Adjusted EBITDA rose to $283 million with a near 32% margin, driven by higher metal prices (notably silver up 164% YoY) and improved volumes.
• Mining zinc production increased 18% year-over-year to 79,000 tonnes, though sequentially impacted by rain, community blockades, and shaft constraints in Peru.
• Mining cash cost net of byproducts was a strong negative $0.76 per pound, below guidance, but smelting cash costs edged above guidance at $1.40 per pound, pressured by low treatment charges and higher concentrate purchases.
• Smelting segment margin remained weak at 8%, reflecting structural pressures on global smelter economics despite volume gains.
• Free cash flow was negative due to seasonality and working capital build-up, with normalization expected in coming quarters; regulatory approvals and integration projects remain on track but extend risk into 2027.