Nexa Reports 3Q26 Adjusted EBITDA of US$301 Million; Aripuanã Plant Utilization Reaches 90% in September

Nexa delivers strong EBITDA growth but posts a net loss due to non-cash charges.

What the company is saying

Nexa Resources S.A. highlights a robust operational and financial performance for Q3 2026, emphasizing a 62% year-over-year increase in Adjusted EBITDA to US$301 million and a 23% rise in net revenues to US$937 million. The company frames these results as evidence of its integrated business model's resilience, citing higher zinc prices and improved by-product contributions as key drivers. CEO Ignacio Rosado underscores the company's ability to capture value across the mining and smelting value chain, while also noting safety improvements and El Niño preparedness. The narrative acknowledges a net loss of US$47 million, attributing it to a US$124 million non-cash impairment on Brazilian smelting assets and a US$51 million silver-streaming remeasurement, neither of which affected cash flow. Nexa also communicates progress at Aripuanã, increased CapEx guidance to US$420 million for 2026, and continued advancement of the Cerro Pasco Integration Project. The announcement details the pending sale of Votorantim’s controlling stake to Boliden, expected to close in Q1 2027, and addresses recent credit rating downgrades and their implications for debt management.

What the data suggests

The disclosed figures show Nexa’s Q3 2026 Adjusted EBITDA at US$301 million, up 62% year-over-year, with net revenues of US$937 million, up 23%. Adjusted EBITDA margin expanded to 32.1%. Free Cash Flow was US$73 million, and net leverage improved to 1.24x, reflecting a stronger LTM Adjusted EBITDA of US$1,169 million. Despite these improvements, Nexa reported a net loss of US$47 million, driven by a US$124 million non-cash impairment and a US$51 million silver-streaming remeasurement, both non-cash items. Mining output was mixed: zinc production rose 1% year-over-year to 85kt, lead increased 4% to 18kt, but copper fell 30% to 6.0kt. Smelting production of zinc metal and oxide was 159kt, up 8% year-over-year, with sales of 146kt. By-product sales, including 532koz of silver and 3.2kt of copper cement, also increased. CapEx for Q3 was US$111 million, with cumulative investments in the Cerro Pasco Integration Project reaching US$31 million. Liquidity remains strong at US$735 million, including a US$320 million undrawn revolving credit facility. The company’s operational and financial disclosures are comprehensive, though project milestone details are less granular. Credit ratings were downgraded by S&P to 'BB+' and placed on watch by Fitch, triggering a required tender offer for the 2028 Notes at 101% of principal upon closing of the Boliden transaction.

Analysis

The announcement provides a thorough and balanced update, with most claims supported by detailed financial and operational data for Q3 2026. Key profitability metrics (Adjusted EBITDA, margin, Free Cash Flow) and operational figures are disclosed, but the company still reported a net loss due to non-cash impairments. Forward-looking statements (e.g., project completion, regulatory approvals, and the Boliden transaction) are clearly separated from realised results and are not exaggerated in tone. The upward revision in CapEx guidance and ongoing investments signal significant capital intensity, with some benefits (e.g., Cerro Pasco Integration Project) only expected to materialise in late 2026 or 2027. However, the language remains factual and avoids promotional overstatement. The gap between narrative and evidence is minimal, with only a modest degree of optimism around project timelines and transaction closings.

Risk flags

• ●The net loss of US$47 million, despite strong EBITDA and cash flow, highlights ongoing exposure to asset impairments and accounting adjustments, which could recur if market or operational conditions deteriorate.
• ●The upward revision of 2026 CapEx guidance to US$420 million and ongoing large-scale investments increase capital intensity and execution risk, particularly if project milestones at Aripuanã or Cerro Pasco face delays or cost overruns.
• ●The pending change of control to Boliden introduces uncertainty, as closing is contingent on regulatory approvals and could trigger further rating actions or debt tender requirements, impacting financial flexibility.
• ●Recent credit rating downgrades by S&P and a negative watch from Fitch may raise Nexa’s cost of capital and limit access to debt markets, especially if further downgrades occur or if the company’s leverage worsens.
• ●Copper production declined 30% year-over-year, indicating operational challenges at Cerro Lindo and Aripuanã that could affect future by-product credits and overall profitability if not addressed.

Bottom line

Nexa’s Q3 2026 update shows strong operational momentum, with EBITDA, margins, and cash flow all improving, but the company remains vulnerable to non-cash losses and capital intensity. The near-term outlook is shaped by the pending Boliden acquisition, which, if completed as planned in Q1 2027, will trigger a mandatory tender offer for the 2028 Notes and could further affect credit ratings. Operationally, project execution at Aripuanã and Cerro Pasco is on track but will require continued capital outlays and careful management to avoid overruns. The company’s liquidity position is solid, but rating downgrades and copper production declines are warning signs. Investors should focus on the closing of the Boliden deal, progress on project milestones, and any further rating actions as the most immediate drivers of value and risk.

Announcement summary

(NYSE:NEXA) Nexa Resources S.A. reported Adjusted EBITDA of US$301 million for the third quarter of 2026, representing a 62% increase year-over-year and a 5% increase quarter-over-quarter. Net revenues for the quarter totaled US$937 million, up 23% year-over-year and 3% quarter-over-quarter. Net leverage improved to 1.24x from 1.40x in 2Q26, driven by stronger LTM Adjusted EBITDA of US$1,169 million and lower net debt. Adjusted EBITDA margin expanded to 32.1%, up 7.7 percentage points year-over-year and 0.6 percentage points quarter-over-quarter. Free Cash Flow reached US$73 million during the quarter. The company reported a net loss of US$47 million, primarily due to a US$124 million non-cash impairment related to Brazilian smelting assets and a US$51 million silver-streaming remeasurement adjustment, both of which did not involve cash outflows. Aripuanã's average plant utilization increased to 84% from 71% in 2Q26, reaching 90% in September, supported by the fourth tailings filter. Nexa revised its 2026 CapEx guidance upward by 10% to US$420 million, mainly to accelerate mine development at Aripuanã, advance the Cerro Pasco Integration Project, and account for the appreciation of the Brazilian real. CapEx for 3Q26 totaled US$111 million, up 25% quarter-over-quarter and 24% year-over-year, with US$15 million allocated to Phase I of the Cerro Pasco Integration Project, bringing cumulative investments in the project to US$31 million in the first nine months of 2026. Net cash from operating activities was US$185 million, and cash, cash equivalents, and financial investments totaled US$415 million at quarter-end. Total available liquidity, including an undrawn US$320 million revolving credit facility, reached US$735 million. Mining production highlights included zinc production of 85kt (up 1% year-over-year and 7% quarter-over-quarter), lead production of 18kt (up 4% year-over-year and 18% quarter-over-quarter), copper production of 6.0kt (down 30% year-over-year and 4% quarter-over-quarter), and silver production of 2.9 million ounces (broadly stable year-over-year and up 8% quarter-over-quarter). Smelting production of zinc metal and oxide totaled 159kt (up 8% year-over-year and 28% quarter-over-quarter), with sales of 146kt (down 2% year-over-year and up 9% quarter-over-quarter). By-products included sulfuric acid sales of 178kt (up 18% quarter-over-quarter), silver content sales of 532koz (up 23% year-over-year and 14% quarter-over-quarter), and copper cement sales of 3.2kt (up 60% year-over-year and 14% quarter-over-quarter). The Cerro Pasco Integration Project advanced with all civil works, major equipment assembly, access road, and Atacocha Dam raise completed; mechanical completion is expected by December 2026, with commissioning through 1Q27 and tailings pumping expected to start in early 3Q27, pending regulatory approvals. Environmental Impact Study Modifications for El Porvenir and Atacocha are under evaluation, with approvals expected in March and April 2027, respectively. The life-of-mine of the El Porvenir Dam at elevation level 4070 was extended through September 2027. Safety performance improved, with the total recordable injury frequency rate declining to 1.34 from 1.50 in 3Q25, despite 19% more hours worked. Nexa prepared for the 2026-2027 El Niño event by building strategic zinc concentrate inventories and engaging a climate-risk consultancy to assess potential impacts in Brazil and Peru. In Peru, 100% of energy requirements for 2027 are contracted; in Brazil, uncovered energy positions represent less than 10% of expected 2027 consumption. At Cerro Lindo, a backfill optimization project reduced cement consumption by approximately 20% versus budgeted levels in the first nine months of 2026. At Juiz de Fora, 3,000 tonnes of Waelz Aggregate were supplied for road paving, replacing virgin crushed stone and avoiding an estimated 44 tCO₂e. Community initiatives in 3Q26 included two health campaigns in Peru serving 466 patients, and eight campaigns in 9M26 serving 1,446 patients. Nexa's scholarship program in Peru supported 1,168 higher education students. The Community Contact Channel in Brazil received 236 contacts since June 2026, with an average response time of two business days. In September 2026, Nexa participated in Exposibram 2026 in Brazil and EXPOMINA Perú 2026. Carlos Alberto Hilário de Andrade, Vice President of Human Resources and Corporate Affairs, will retire after serving since April 2025, and Livia Desenso Monteiro will assume the position effective November 1, 2026. On August 27, 2026, Votorantim S.A. entered into a definitive agreement to sell its 64.68% controlling stake in Nexa to Boliden, with closing expected in the first quarter of 2027, subject to regulatory approvals. Following closing, Boliden is expected to launch a voluntary cash tender offer for all remaining Nexa shares and mandatory tender offers for certain Nexa subsidiaries in Peru. Nexa is expected to remain a separate company incorporated under Luxembourg law, with its management team remaining in place. On August 31, 2026, Fitch Ratings placed Nexa's 'BBB-' ratings on Rating Watch Negative and affirmed National Scale Long-Term Ratings at 'AAA(bra)' with a Stable Outlook. On October 27, 2026, S&P Global Ratings lowered its long-term ratings on Nexa and its senior unsecured notes to 'BB+' from 'BBB-', with a 'Stable' outlook, and affirmed its 'A-3' short-term issuer credit rating. As a result, Nexa will be required to make a change of control tender offer for the 2028 Notes at 101% of principal within 30 days after closing with Boliden. A change of control tender offer for the 2034 and 2037 Notes would only be triggered if Fitch also downgrades those notes. The company continues to evaluate alternatives for its outstanding debt as part of ongoing liability management and gross debt reduction strategies for 2026. Moody's rating remains unchanged.

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