Nexa Resources Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
July 28, 2023

There are 7 speakers on the call.

Operator

Good morning, and welcome to Nexa Resources' 2nd Quarter 2023 Conference Call. All participants will be in a listen only mode. This event is being recorded and is also being broadcast via web cast and may be accessed through Nexa's Investor Relations website, where the presentation is also available. After today's presentation, there will be an opportunity to ask questions. And that will soon be answered.

Operator

I would now like to turn the conference over to Mr. Rodrigo Camarosano, Head of Investor Relations, for opening remarks. Please go ahead.

Speaker 1

Good morning, everyone, and welcome to Nexa Resources' Q2 2023 earnings conference call. Thanks for joining us today. During the call, we will be discussing the Company's performance as per the earnings release that we issued yesterday. We encourage you to follow along with this on screen presentation through the webcast. Before we begin, I would like to draw your attention to Slide number 2, as we will be making forward looking statements about our business, and we just ask that you refer to the disclaimer and the conditions surrounding those statements.

Speaker 1

It is now my pleasure to introduce our speakers. Joining us today is our CEO, Inacio Rosado our CFO, Jose Carlos del Valle and our Senior Vice President of Mining, Leonardo Coel. So now, I will turn the call over to Ignacio for his comments. Ignacio, please go ahead.

Speaker 2

Thank you, Rodrigo, and thanks to everyone for joining us this morning. Please let's move now to Slide number 3, where we will begin our presentation. Let me begin by giving you a brief overview of our Q2 of 2023. We continue to experience a volatile macroeconomic scenario as weak economic indicators from China came in below expectations. Additionally, returns over the global growth outlook in addition to persistent inflation in some sectors of important economies and tight monetary policy are negatively affecting base metal prices, especially zinc, the main metal in our portfolio.

Speaker 2

In the Q2, zinc price fell 19% quarter over quarter and 35% year over year. In this difficult scenario, we are working on a portfolio of initiatives focused on cost reduction, CapEx and working capital optimization, which I will discuss in more detail later in the presentation. Our net revenue for the quarter reached $627,000,000 24% down year over year, mainly driven by lower LME metal prices compared to the Q2 of 2022. Net revenues decreased by 6% quarter over quarter, also reflecting the lower LME metal prices, which was partially offset by higher mining production and metal sales volumes. Our adjusted EBITDA in the Q2 of this year was $72,000,000 compared to the $133,000,000 in the Q1 of this year.

Speaker 2

This performance was mainly explained by the impact of lower LME metal prices as explained initially. Despite the significant drop in prices, we were able to deliver a positive cash generation and we would like to reaffirm that our 2023 annual guidance remains unchanged. Aripuana is progressing well. And at the end of June, the plant downtime hours reduced significantly. The plant reached 76% of that nameplate capacity, while the recovery rates improved as well as the quality of the concentrates.

Speaker 2

In terms of exploration activities, our brownfield exploration programs are moving towards increasing the life of the mine in our mining operations. As mentioned also in our previous presentation, we are prioritizing the studies related to the PASCO integration project to consolidate a robust strategic organic growth option for Nexa in the near future. We remain confident in the long term fundamentals of our industry and our business. We will continue focusing on safety, productivity and cost control in order to create value for all of our shareholders. Now moving to Slide number 4.

Speaker 2

In Slide 4, regarding the operating performance of the mining segment, you can see that zinc production increased to 81,000 tonnes, up 2% year over year, mainly explained by an increase in treated ore volume and the startup of the Aripuana mine. Compared to the Q1 of this year, zinc production was up 8% explained by the resumption of operations at Cerro Lindo and higher volumes from Aripuana. In relation to cash cost, mining cash cost in the Q2 of this year increased to $0.37 per pound compared to CAD0.16 per pound in the Q2 of last year, mainly explained by lower byproduct prices and higher TCs. However, our cash costs in the first half of twenty twenty three positively exceeded what we forecasted in our guidance for the year, decreasing almost $0.10 per pound compared to the lower end of the range. Looking at the cost per run of mine, which is the one metric that we control, it decreased quarter over quarter due to higher ore mine and the implementation of initiatives to reduce our costs.

Speaker 2

Now moving to Slide number 5. In Slide number 5, regarding the operating performance of the Smelting segment, metal sales totaled 149,000 tonnes in the Q2 of 2023, down 2% from the Q2 of last year and up 4% compared to the Q1 of this year. The quarter over quarter performance is may explain by slightly higher production volumes and sales strategy in line with our working capital improvement initiatives. Smelting cash cost in the Q2 of this year decreased to $1.12 per pound compared to $1.46 per pound in the Q2 of last year and $1.25 per pound in the Q1 of this year. In both periods, this decrease was mainly explained by lower LME zinc prices affecting the cost of concentrate purchases, which were partially offset by lower by products prices.

Speaker 2

Our conversion cost, which is the metric that we control, remained flat quarter over quarter. Now moving to Slide 6. On this slide, I would like to highlight the competitive position of our Mining and Smelting segments. In times of tight prices, it is important to understand how resilient and competitive our portfolio of operations is. As you can see, our Mining and Smelting segments are positioned in the lower quartiles of the cost curves.

Speaker 2

This competitiveness is supported by flagship polymetallic mines and smelter operations with competitive energy costs, access to raw materials under competitive conditions in addition to adequate logistic costs and operational efficiency. Now moving to the next slide. In Slide number 7, I would like to highlight the productivity program we are performing at some of our mining operations. It is a broad program that seeks to operate on different efficiency levels, including initiatives such as higher availability of mine equipment, manpower reduction, optimization of mining methods and reduction of scope and rates of our main contractors. All of these initiatives are aimed to increase productivity, reduce our headcount, reduce fixed and variable costs and optimize investments and working capital.

Speaker 2

The next stage of this problem will extend to our other mines and our smelter operations, which we expect to start in the next few weeks. Ramp up activities at Aripuana continue to progress significantly and we are currently focused on a steady increasing plant throughput rate, asset reliability, reduction of plant downtime hours as well as improving metal recoveries and concentrate rates and quality. During the quarter, treated ore volume was 372,000 tonnes, an increase of 100,000 tons from previous quarter, while zinc production reached 6,500 tons, up 166% quarter over quarter. In the next slides, we will see some of these improvements. For the upcoming quarters, we expect to conclude the adjustments related to the bottlenecks in the pumping and piping systems that we mentioned in the previous quarter and further improve the recovery and concentrate grades.

Speaker 2

We also continue with mine development activities at AddEX and Link mines. The exploration activities in the quarter progress as planned, and we are focused on upgrading the mineral resource at the Babasu deposit and expanding again our mineral reserves at the end of 2023. Now moving to the next slide. On this slide, I will talk about the progress of some of our main KPIs for the ramp up phase of Aripuana. Starting with the planned downtime in the upper left side, we noted a reduction of 32% quarter over quarter.

Speaker 2

Average planned capacity utilization increased by 32% in the 2nd quarter to 60 6% and in June utilization reached 76%. This utilization already includes the planned downtime hours. Therefore, if we do not consider those hours, the utilization would be at much higher levels. That is why we are focused on plant reliability. Finally, we can see the progress of SIM recovery, which reached 63% in June compared to 48% in March and the quality of concentrate in zinc increased significantly.

Speaker 2

Now moving to the next slide. On slide number 10, you can see that compared to the Q1 of 2023, zinc production grew by 156%, reaching 6,500 tons in the 2nd quarter. Copper grew by 36%, while lead and silver production grew by 37% 61%, respectively. That said, we are confident with the progress of the operation and we will remain focused on completing the ramp up in the coming months. Now moving to Slide 11.

Speaker 2

On this slide, I would like to highlight that we continue to advance with the technical studies for the PASCO integration project. As we have been discussing in previous calls, this is a project with the potential to unlock important value for Nexa through economies of scale, cost improvement and extension of the life of the asset. We have 4 work fronts underway, focusing on the integration of the underground mines, increasing the capacity of the El Porvenir plant, increasing the capacity of tailings storage facilities as well as studies for support functions. Exploration activities are following our program for the year, which already included activities focused on supporting the mineral inventory for the project. We are moving forward with the project and expect to submit it for approval by our Board of Directors in the Q4 of this year.

Speaker 2

Now I will turn over the call to Jose Cano del Valle, our CFO, who will present our financial results. Jose, please go ahead.

Speaker 3

Thank you, Ignacio. Good morning to everyone. I will continue on Slide 12. As you can see, beginning with the chart on your upper left, total consolidated net revenues for the 2nd quarter decreased by 24% year over year, mainly due to lower LME metal prices and slightly lower smelting sales volume. Compared to the Q1 of 2023, net revenue decreased by 6%, also driven by lower LME metal prices.

Speaker 3

This decline was partially offset by higher mining production and an increase in sales volumes. In the first half of the year, consolidated net revenues reached $1,300,000,000 versus $1,600,000,000 in the first half of twenty twenty two, a decrease of 17%. Consolidated adjusted EBITDA in the Q2 of 2023 was $72,000,000 compared to $302,000,000 in the Q2 of 2022. This important reduction was driven primarily by 35% and 11% declines in zinc and copper prices respectively, as well as by higher operating costs related to the startup of Aripana. Compared to the Q1 of 2023, adjusted EBITDA decreased by 46%, explained by lower metal prices and by the negative impact of the exchange rate, partially offset by higher byproduct volumes and a positive hedge effect.

Speaker 3

In the first half of this year, consolidated adjusted EBITDA reached $205,000,000 versus $519,000,000 in the same period of last year, also explained by the reasons mentioned a moment ago. Now let's move to the next slide 13. On the top left of the slide, we can see that in the first half of twenty twenty three, we invested $116,000,000 in CapEx of which sustaining investments including mine development totaled $115,000,000 The total investment in the second quarter was $60,000,000 As mentioned by Ignacio, we have been implementing initiatives and programs focused on cost reduction and on working capital and CapEx optimization. It is likely that some of these initiatives may result in lower CapEx intensity for the year. Therefore, we may revise downward in the next quarter our guidance for 2023.

Speaker 3

With regards to mineral exploration and project evaluation, we invested a total of $44,000,000 in the first half of twenty twenty three, of which $23,000,000 was related mineral exploration and mine development to support exploration activities. Now let's move on to the next slide in which I will discuss our cash flow generation in the Q2 of the year. For the Q2 of 2023 and starting from our $72,000,000 of adjusted EBITDA net of non operational items, we paid almost $40,000,000 related to interest and taxes and spent $63,000,000 in sustaining CapEx in our operations including Aripuana. Additionally, loans and investments had a negative impact of $6,000,000 We then had a positive impact of $6,000,000 due to the effects of foreign exchange on our cash and cash equivalents balance driven by the appreciation of the Brazilian real against the U. S.

Speaker 3

Dollars. Finally, there was a positive contribution of $83,000,000 due to an improvement in working capital, in part as a result of management initiatives implemented in the Q2 of 2023. Combining all the effects described above, our free cash flow in the Q2 of 2023 was $34,000,000 Now moving to slide 15. On this slide, you can see that our liquidity remains healthy and that we continue to present a solid balance sheet with an extended term debt profile. Cash balance increased and net debt declined in the Q2 of 2023 as a result of positive cash flow generation during the period.

Speaker 3

As a result, current available liquidity was approximately $721,000,000 including our undrawn revolving credit facility of $300,000,000 In relation to our debt, it has an average maturity of 4.2 years and a 5.6% average cost. It is important to mention that as of June 30, our total cash is sufficient to cover the payment of all our obligations maturing in the next 4 years, with only 2% of total debt maturing by the end of 2023. Finally, despite the $40,000,000 increase in our cash balance, leverage measured by the net debt to adjusted EBITDA ratio increased from 1.9 times to 2.8 times quarter over quarter, mainly because of lower adjusted EBITDA in the last 12 months driven by the prevailing trend of lower LME prices. Now moving to slide 16. Talking about some key market fundamentals.

Speaker 3

First, I should highlight that in the Q2 of 2023, LME zinc price averaged $2,356 per ton, down 35 percent from the Q2 of 2022 and 19% from the Q1 of 2023. The main reasons for this decline in LME metal prices were concerns about the health of the global economy, persistent high interest rates driven by resilient inflation in some sectors and in relevant economies and the lower than expected pace of recovery of the Chinese economy, driven in part by some key economic variables surprising to the downside last quarter. However, despite tight prices in the short term, we believe zinc fundamentals remain positive in the mid and long term, supported by potential lack of feasible supply to fulfill forecaster demand, which is expected to be driven by investments in constructions and the auto sector, now also boosted by electric vehicle sales. Regarding copper, the LME price is down 11% from the Q2 of 2022 and 5% from the Q1 of 2023. In terms of demand, we are all aware that copper will play a key role in the energy transition.

Speaker 3

On the supply side, volumes from greenfield and brownfield projects are expected to come online in 2024 2025, contributing to a mild surplus in the market, which could revert in the following years. Now, I will hand over the presentation back to Ignacio for his final remarks.

Speaker 2

Thank you, Jose Carlos. Before going on Slide number 17, I would like to mention one provision that impacted our net income in the Q2 of this year. In line with our last quarter's financial disclosures regarding an ongoing investigation of commercial and VAT tax related practices of certain of Nexa's customers between 2018 and 2022, I would like to inform that Nexa has been cooperating fully with the state of Minas Gerais authorities. Considering that the current deferred VAT state rules imply secondary liabilities for Nexa, if a customer with primary responsibility does not make the required payments to the state, Nexa may decide to voluntarily make some tax payments on behalf of these customers to avoid higher tax exposures in the future and reserves the legal right to recover such amounts from them in the future. This potential resolution can also include a contribution to the state of Minas Gerais to support its ESG related efforts and enhance its monitoring and investigating tools to avoid this type of situations in the future.

Speaker 2

Therefore, in connection with this situation, the company has decided to record a provision of approximately $70,000,000 for the Q2 of this year. We will keep the market informed as appropriate of the evolution of this situation. I would like to close the presentation by mentioning our priorities for the remaining of the year. We will continue working on completing the Arepa and R ramp up on our mineral exploration programs as well as on advancing with the studies related to the Cerro Pascua integration project. We will remain focused on productivity, aiming to reduce costs and optimize CapEx and working capital.

Speaker 2

This will contribute to strengthening our position in the current challenging price scenario in addition to supporting our balance sheet. We are confident we are on track to deliver our full year targets and with the guidance we laid out at the beginning of the year. Thank you all for attending this presentation. With that, we will be happy to take your questions.

Operator

We will now begin the question and answer session. We have up to 30 minutes for questions. We currently have no questions on the phone. We might be able to move over to webcast questions now.

Speaker 4

Hi, everybody. The first question thanks for the question. The first question is from, Hernan Hulslik from MetLife. The question is Nexa sits in the 1st quartile of mining cost curve, but yet with low zinc prices, the EBITDA margin was only 7%. Does it mean that higher cost producers are having negative EBITDA?

Speaker 5

Thank you, Rodrigo. Hi, this is Jose Carlo Del Valle, CFO. Thank you for the question. Here, the way I would see this is that certainly higher cost producers are facing are struggling with these prices. However, the results that we're seeing for Nexa don't necessarily represent what Nexa's future performance is going to be.

Speaker 5

One important item here is that Aripuana is still in a ramp up status, So that is going to continue to evolve favorably and contribute to our margin in the next few quarters. So that's one point. And there are always things that may not be that clear for the market in terms of provisions, for example. In this quarter, we have had close to $50,000,000 in provisions that somehow are not really seen by the market are related to NRV, to mark to market, legal provisions, which don't happen in a recurring way. So having said that, higher cost producers definitely see some difficulties at these prices, but I would say that the 7% margin that you're mentioning for Nexa is not representative of what Nexa could achieve under normal conditions with these prices.

Speaker 5

And to us

Speaker 6

I mean, Nacio and to what Jose Calvo is saying, in this case of this 7% and $72,000,000 which is really low for us, besides the provisions that Jose Carlo is saying, we have the effect of Aripuana. Aripuana is a mine that is still in the ramp up, so it's losing money and that influences that. And one comment that is important is that if you go a mine by mine and a smelter by smelter, which is the curve of the 1st quartile that you have, most of them at these prices make money. The thing is that, that money is being used in Aripuana and in other CapEx activities today. So going forward, I would say that with the programs that we are launching and with the profitability increase that we want in our mines and Aripuana now starting to be positive, the cash flow generation from all operations will improve and will reflect more or less that we are in the first and beginning of the second quartile.

Speaker 4

Okay. Thank you, Ignacio. Thank you, Jose Carlos. We have another question here from the audience. It comes from Diklam Hannan from Santander.

Speaker 4

Regarding the working capital cash generation, can you provide more detail on how this and how you anticipate these management actions to impact the working capital cash cycle in the second half of the year? Secondly, where you see EBITDA for the full year, given the guidance line items presently.

Speaker 5

Thank you, Rodrigo. Thank you, Declan also for your question. Here I would say that the key aspects here are related to mainly reusing inventory so that we can shorten the working capital cycle. And in part, it's simply the reversion of the negative working capital impact that we had in the Q1. And if you remember, I think it was in the last call, we said that this will revert in the next few quarters.

Speaker 5

So part of that is the reversion of this and the rest is related to initiatives, as I mentioned, mainly to reduce inventory, trying to optimize transportation and inventory levels in all the operating units to reuse working capital. In terms of EBITDA, as you know, this will be largely influenced by price, which we cannot predict. So it will be difficult to give you a view on this. What we can say is that we are reaffirming our production levels. So that's the one piece that we do control and we're always focusing on as well as on cost optimization.

Speaker 4

Okay. Thank you, Jose Carlos. We have another question from Jens Jens from Morgan Stanley. Could you please elaborate on VAT investigation provision? How certain is that the final one month pay will be $17,000,000 Will you be able to recover that amount from the customers through legal measures?

Speaker 6

Yes. The provision of this $70,000,000 that we have comprises all the customers that are involved in the investigation today. So we are certain that this amount is a 100% of the amount in investigation. What we are discussing with the authorities is that half of this amount, we will use tax credits that we have. We have accumulated over the years a lot of tax credits.

Speaker 6

So half of them will be used in paying this amount if we arrive at this condition. And the other half is going to be paid in installments, in monthly installments in 36 months. So that's more or less where we are in this regard. There is still an investigation for other 2 clients that is early days today. And we cannot provide any information on that because the process is just starting.

Speaker 4

Thank you, Ignacio. We have another question from Morgan Stanley. The company mentioned the possibility to revise down the CapEx guidance for the year. Where would Nexa reduce their investments if it comes to that?

Speaker 5

Yes. Thank you. Thank you again for the question here. It's too early to tell and we are not making that revision right now because we're evaluating what those areas will be, and that's why we believe that we will be we would be announcing this in the next quarter. But obviously, it will be in CapEx components that are not that critical to the company's performance or to the company's safety, and we will be announcing that once we complete the evaluation.

Speaker 4

Okay. Thank you, Jose Carlos. We have another question here. Sorry, I have one question from S&B Global West. There have been recurring roadblocks at Atacocha.

Speaker 4

Do you foresee further trouble with the communities this year?

Speaker 6

Yes. Actually, the Atacocha strategy has changed very much in the last 18 months. What we are doing now is that before Atacocha was work the communities around Atacocha were working on pressing the company, stopping the pit. So they claim more amounts on the agreements that were open at that time. So they were pushing the company to pay them more.

Speaker 6

And if not, I will stop the bid and I will commit vandalism around our offices and on our equipment. So the strategy we did was we changed and say, okay, we cannot negotiate with you in these terms. If we stop the pit and the operations are stopped, you will also suffer. And we have been legally demanding them. We have been firing some of the workers.

Speaker 6

And we have been cutting all the benefits that these communities workers of the communities were exposed. So they can feel the same as us that these stoppages hurt the company and themselves. So this has been the case for the last 18 months. Most of the communities understood that by doing that, there were a lose lose situation and we agree with most of the communities on an agreement that we close all our agreements, accounts are clear and we move forward as partners in developing the mine and developing the communities. This last stop of Mashcan, which is this small community, as I would say, the last one in this context, It took us almost a month.

Speaker 6

We received operations yesterday. We were speaking with the authorities and with them. And now we are talking in the same terms as before. So I would say that the answer to your question is given this new strategy, they know that it's a lose lose strategy. Stop if they stop us, I will see that in the coming months and complying with all the agreements that we have and making sure that the community also gains some of the business that generates Nexa, we don't see any other stoppages.

Speaker 6

Must having said that, this is Peru, it's very difficult in the context sometimes. We keep monitoring that, but I would say that there is a probability that we won't have any other stoppage in the coming months.

Speaker 4

Okay. Thank you, Ignacio. We have one question from Neil Botha from 961. Net leverage has increased a bit recently, currently at 2.8x net debt to EBITDA ratio. Where do you see this trading towards year end?

Speaker 4

Is there a risk of pressure on credit ratings if this weakening trend in leverage continues?

Speaker 5

Thank you, Rodrigo, and thank you, Neil, for the question. Yes, that is correct. Leverage has gone up. However, this increase is mainly related to lower prices and lower EBITDA that are consequence of the lower prices. So it's a part of the leverage that we don't really control much, right?

Speaker 5

The levers that we're focusing on are the ones we are trying to optimize with a business perspective, preserving cash, optimizing cost, increasing productivity. And the EBITDA is going to be a consequence of that on those factors that we can control. Prices, unfortunately, we cannot do much about. So we are we're just continuing to try to make sure that we have the most efficient operations. In line with that, I think it's also important to emphasize again that all of our operations make money at these prices.

Speaker 5

So that doesn't mean that we cannot improve this further. That's what we're working on right now, both at the mines and at the smelters. And if prices improve, that's better. In terms of rating agencies, we have close communication with them. They understand low price scenario.

Speaker 5

And as far as we know, there should be no impact on our current ratings.

Speaker 4

Thank you, Jose. We have one question from Orlando Barriga from Credicorp Capital. Good morning. Thanks for taking my question. I would like to know what can we expect in Aripuana for the following quarters, given the quarter on quarter increase?

Speaker 4

What are we going to be the cost there?

Speaker 6

Yes. It's a good question. And I think this also relates to another question that was asked and we haven't talked about that yet. In the Q2, we lost $30,000,000 in Aliparat because of the ramp up. I mean, the cost and the CapEx are higher than the metal we are selling.

Speaker 6

In the Q1, it was more, it was around $40,000,000 to $45,000,000 And in the 3rd and 4th quarter, we expect that these amounts are going to be much lower. You have seen the trends there, the downtime allowance that is very important for us because it creates reliability from the plants are going to go down. In July, it's going to be close to 100 hours and that's going to improve, recoveries are up, quality of concentrate is up. So the second half of this year is going create a positive environment for this ramp up. Having said that, to give you an idea of cost guidance today is early because we are still stabilizing the process and we are spending probably more CapEx to make sure that the plant is up and running on a 100% basis.

Speaker 6

We are spending some CapEx more in the mine, so we can prepare the mine to feed the plant in the right direction. So we are not comfortable giving you some of the costs that we have. What I can say is that the negative cash flows that we had in the first half are going to be much lower in the third quarter and hopefully positive in the 4th quarter. The guidance that we are giving around achieving nameplate capacity towards the end of the year It is still there. You guys can see the KPI that we are showing.

Speaker 6

So Aripuana is going in a very good direction. And that's actually what we can say today.

Speaker 4

Thank you, Ignacio. We have another question from JPMorgan Stanley. You mentioned that El Poisson's ramp up had a $30,000,000 negative impact on free cash flow in the second quarter. How much has the total accumulated impact since the start up of the total?

Speaker 6

Yes. As I was saying, this year, $30,000,000 in the 2nd quarter in the first quarter was almost $40,000,000 or $43,000,000 as I was saying. And we expect that this number is going to be much lower in the second half of the year because the ramp up I mean, the plant is going to generate more quality concentrate, cost will go down, CapEx is going to slow down. So second half of this year, we will be in a much better position and much better shape, I would say.

Operator

And with that, we will conclude our question and answer session. Now, we will hand over to Ignacio for his final remarks. Mr. Rosado, please go ahead.

Speaker 6

Thank you very much. Thank you very much all for attending this call. This was a very difficult quarter for us given the 35% decrease in prices of zinc. As you know, zinc is the main method we produce. We are conscious that this situation won't reverse soon.

Speaker 6

We know that China is still not getting all the indicators in the industrial segment that we need. The some positive indicators in the states are helping. That's why zinc price is recovering a little bit. But in any case, we are prepared to face this type of prices for the rest of the year. We will have to be prepared and probably the next year as well.

Speaker 6

So we are very committed to make sure that we produce positive cash flow. We are very committed that Anipuana will be up and running in the outlook that we are projecting. We are very committed achieve our guidance. And hopefully, when prices go down, we will benefit from that in our cash flow. The reduction of the debt is a priority for us as well.

Speaker 6

We spend a lot of money in our Adipana project. So, we are very aware that reduction of that is our priority. We are also committed on that. And you will see the trends that we are projecting in the coming quarters. And with that, I would like to thank everybody, and we will see you in 3 months presenting our Q3 results.

Speaker 6

Thank you. Thank you very much to everyone and have a good day.

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Earnings Conference Call
Nexa Resources Q2 2023
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