Message from the CEO GRI 102-10, 102-14
Major highlights in 2017 included IPOs on the New York and Toronto stock exchanges and the changing of our name to Nexa Resources. These significant events led us to a new governance level, proper for publicly traded companies and, especially, the markets in which our stock is traded.
We invested US$ 198 million in Capex (capital expenditures) on several fronts, all focused on the three axes of our strategic plan – Growth, Operational Excellence, and Market Development. Our greenfield projects progressed, in Aripuanã (Brazil), Magistral and Pukaqaqa (Peru), increasing our reserves of mineral potentials.
We also strengthened our commitment to innovation during the year. The Digital Mining project, which is part of our Automation and Information Master Plan (PDAI), is noteworthy as it encourages the application of digital technologies to make our mining activities more productive, competitive and safe. Particularly of importance were our energy efficiency and water recirculation gains, such as with our biomass boiler, already in operation at Três Marias unit; the equipment enabled us to substitute diesel oil with a renewable fuel, thus producing 22.1% fewer greenhouse gas emissions. In addition to a huge environmental gain, the initiative also led to cost savings.
From an operational perspective, it was a difficult year, mainly due to heavy rainfall in Peru in the first quarter, which impaired mining operations and transportation logistics. We also conducted our Peruvian mining processes in a manner designed to ensure higher levels of safety We were able to offset part of these losses during the second half thanks to sensible planning and the expertise of our mining and logistics teams.
On the other hand, the metal commodities market performed very well throughout the year, with zinc and copper prices reaching historically high levels – which, in a way, mitigated the drop in production. Another highlight was our May 2017 bond issue, worth US$ 700 million and maturing in 2027, which extends the average debt maturity to seven years. Both of these events had a positive impact on our financial indicators: net revenue totaled US$ 2.4 billion for the year (24.7% higher than in 2016) and adjusted EBITDA was US$ 668 million.
Unfortunately, we were saddened and frustrated with the loss of seven employees, contracted from third parties, whose deaths occurred within our operations – six in Peru and one in Brazil. For us, safety has always been and remains a core value. Throughout our history, we have worked hard to make our operations safer. Our innovation projects, whether to gain operational efficiency or to reduce costs, always are based on Safety as the central guiding principle of planning and execution. Consequently, such occurrences are inadmissible. We reviewed processes, reinforced security teams, invested in training leaders and employees and adopted new rules to prevent such events from happening again. We reiterate our regrets to all the families who lost their loved ones.
We adhere to the UN Global Compact, maintaining policies and practices in line with human rights, labor, environmental preservation and protection and anti-corruption principles. Resources allocated to social initiatives – mainly to the economic and social development of our surrounding communities – totaled approximately US$ 14.6 million. With new guidelines and redefined scope, we have re-launched our business volunteer program – now called Somos Todos (All Together). We devoted some 250,000 hours to staff training and professional development programs.
In 2017, we designed and put into practice our Global Integration Plan, which features activities and projects that are aligned with four fundamental pillars: structure, people, processes, and systems. The goal is to absorb the best practices in each country and strengthen our approach to being a unique and global company. Moreover, we want our people to feel like they are in the same “home” wherever they may be working.
As regards personnel management, we continue to invest in the development of our talents and the building of inspiring leadership. We invest in our employees, contributing to the fostering of ethical and transparent relationships with our stakeholders.
All of these activities are in full harmony with our vision for Nexa’s future. Our focus will remain on growth with competitiveness, creating and sharing value with the company’s stakeholders. To this end, we will continue to invest heavily in our people, in operational excellence and in the development of new markets, assuring financial discipline, training future leaders, and following a mining model concerned about the impact it has on society’s quality of life well-being.
Thus, fully and responsibly committed, we will be able to deliver that which we have pledged to our stakeholders. We thank our shareholders and investors, employees, customers, suppliers, communities and all other stakeholders who accompany us on this journey along the path to sustainable growth.
Thank you very much.