Nexa Reports 2Q26 Net Income of US$98 Million and Adjusted EBITDA of US$286 Million

Nexa delivers strong earnings growth and higher CAPEX, but copper output drops sharply.

What the company is saying

Nexa Resources S.A. frames its second quarter 2026 update around robust financial and operational performance, highlighting a net income of US$98 million and a 78% year-over-year increase in Adjusted EBITDA to US$286 million. The company emphasizes improved mining and smelting results, increased treated ore volumes, and higher zinc and lead production, while downplaying the 31% year-over-year decline in copper output. CAPEX is presented as both elevated (US$89 million for the quarter) and disciplined, with unchanged 2026 guidance at US$381 million, and the Cerro Pasco Integration Project's budget raised to US$180 million. The narrative asserts operational normalization at Cajamarquilla after a fire and continued progress on major projects, but provides limited numerical detail for these claims. Shareholder actions, including a US$17.5 million share premium reimbursement and board mandate renewals, are positioned as evidence of stability. The tone is measured and factual, with little promotional language and a focus on headline achievements.

What the data suggests

The reported net income of US$98 million marks a substantial improvement from US$13 million in the prior year quarter, though it is down from US$118 million in the previous quarter. Adjusted EBITDA of US$286 million, up 78% year-over-year, and net revenues of US$908 million, up 28%, confirm a strong upward trend in profitability and sales. Zinc production rose 8% to 79kt, and lead output increased 2% to 15kt, but copper production fell 31% year-over-year to 6.3kt, indicating a significant operational challenge in that segment. CAPEX of US$89 million is 24% higher quarter-over-quarter and 3% higher year-over-year, with US$9 million allocated to the Cerro Pasco Integration Project, whose total budget has risen from US$138 million to US$180 million. Net leverage improved to 1.40x from 2.28x a year ago, reflecting stronger balance sheet health. The data lacks segment-level profitability and cash flow details, and several operational and ESG claims are not substantiated with numbers. Overall, the figures support the company's narrative of financial improvement, but mask weakness in copper output and provide limited transparency on cost drivers.

Analysis

The announcement is largely factual and supported by clear, measurable financial and operational results. Key profitability metrics such as net income (US$98 million), Adjusted EBITDA (US$286 million, up 78% YoY), and net revenues (US$908 million, up 28% YoY) are disclosed alongside production and CAPEX figures. Most claims are realised and numerically substantiated, with only a minority of statements being forward-looking (e.g., project timelines and guidance reaffirmations). The tone is positive but proportionate to the results, and there is no evidence of narrative inflation or overstatement. While some operational and ESG initiatives are mentioned without detailed numerical support, these are ancillary to the main financial disclosures and do not inflate the investment signal. The capital outlays discussed are paired with clear progress updates and do not rely on long-dated, uncertain returns.

Risk flags

• ●Copper production declined 31% year-over-year to 6.3kt, a material operational setback that could impact revenue and margins if not reversed. The announcement does not provide a clear explanation or mitigation plan for this drop.
• ●The Cerro Pasco Integration Project's CAPEX estimate increased from US$138 million to US$180 million, and the timeline for commissioning key infrastructure slipped from 4Q26 to 1Q27. Cost overruns and schedule delays are common risks in mining capital projects and can erode returns.
• ●Several operational and ESG claims, such as the normalization of Cajamarquilla operations and safety improvements, are not supported by detailed numerical evidence. This limits the ability to independently verify progress and assess the effectiveness of management responses to incidents.
• ●Net leverage improved to 1.40x, but the absence of a full balance sheet and cash flow statement means liquidity and debt servicing capacity cannot be fully assessed. Any deterioration in commodity prices or further operational disruptions could strain financial flexibility.
• ●Regulatory approvals for key projects, including environmental impact studies for El Porvenir and Atacocha, are still pending and expected in 1Q27. Delays or adverse decisions by SENACE could impact project timelines and future production.

Bottom line

Nexa's Q2 2026 results show clear financial improvement, with net income and EBITDA both up sharply year-over-year and net leverage down to 1.40x. The company is spending more on growth projects, notably raising the Cerro Pasco Integration Project's budget to US$180 million and pushing completion into 2027, which delays returns on this capital. Copper output is a weak spot, down 31% year-over-year, and the company provides little detail on how it will address this. While the share premium reimbursement and board renewals signal stability, the lack of granular segment data and unsubstantiated operational claims limit full transparency. The main takeaway is that Nexa is delivering on profitability and project investment, but faces execution and commodity risk, especially in copper. Investors should focus on copper recovery, project delivery against new timelines and budgets, and watch for more detailed disclosures on costs and cash flow to better assess sustainability of the current financial trajectory.

Announcement summary

(NYSE: NEXA) Nexa Resources S.A. reported net income for the second quarter of 2026 of US$98 million, compared to US$13 million in 2Q25 and US$118 million in 1Q26. Adjusted EBITDA reached US$286 million, up 78% year-over-year, while net revenues totaled US$908 million, up 28% year-over-year. Zinc production reached 79kt, up 8% year-over-year, and lead production increased 2% to 15kt, while copper production declined 31% year-over-year to 6.3kt. CAPEX totaled US$89 million in 2Q26, up 24% quarter-over-quarter and 3% year-over-year, with 2026 CAPEX guidance of US$381 million remaining unchanged. The company expects to recover affected volumes at Cajamarquilla in the second half of the year and maintains its 2026 guidance for mining production, smelting sales, costs, CAPEX, and exploration, project evaluation, and other expenses. Nexa increased the total estimated CAPEX for the Cerro Pasco Integration Project from US$138 million to US$180 million, with completion of the tailings pumping system now expected in 1Q27 and start of pumping operations in early 3Q27. Shareholders approved a share premium reimbursement of US$17.5 million, or US$0.132136 per share, payable on August 11, 2026, to shareholders of record as of July 28, 2026.

Disagree with this article?