Our production reached the 2018 forecast for all metals. Zinc contained in concentrate production totaled 373 thousand tonnes, stable compared to the 375 thousand tonnes produced in the previous year. The production of zinc equivalent corresponded to 556 thousand tonnes. The decrease of 3% in comparison with the 571 thousand tonnes of zinc equivalent produced in the previous year was due to the lower production of copper, mainly driven by lower grades.
Production of metal contained in concentrate (thousand tonnes)
Our smelters delivered excellent performances, with production remaining stable during the year. Reaching the top of the sales forecast range for 2018. Sales of zinc products processed in our smelters (metallic zinc and zinc oxide) reached 617 thousand tonnes in the year, 4% above sales of 594 thousand tonnes in 2017, mainly due to the greater volume in the units of Cajamarquilla and Três Marias, which rose 6% and 3%, respectively.
Sales of smelter products (thousand tonnes)
Average price on the LME
Average price on the LME
Average price on the LME
Net revenue from our 2018 operations of US$ 2,491.2 million was 1.7% higher than the value recorded in 2017 (US$ 2,449 million) due to slightly higher LME prices combined with higher metals sales.
Our adjusted EBITDA was US$ 604.8 million, a decrease of 9.4% over 2017, as a result of higher costs incurred due to revisions in safety processes and mine development initiatives, mainly in Cerro Lindo. The adjusted EBITDA margin was 24.3% in 2018, down from 27.3% in the previous year.
Cost of sales amounted to US$ 1,889 million in the 12 months of the year, an increase of 7.8% compared to 2017. This reflects higher costs of the purchase of concentrate by our smelters in the first half of the year. Selling, general and administrative expenses totaled US$ 159.6 million for the year, 3.3% more than in 2017.
Financial results (US$ million)
13 Data published in 2017 has been revised.
14 Data published in 2016 and 2017 have been revised. GRI 102-48
Net debt/Adjusted EBITIDA
US$ 299.7 million
of Capex investment, 52% more than previous year.
Liquidity and debt
At December 31, 2018, our total gross debt was US$ 1,428.9 million (only principal), consisting mainly of (73%) of bonds issued by Nexa and its subsidiary Nexa Peru, of which US$ 700 million matures in 2027. Another 14% refers to loans through international banks. Only 1.6% of the debt (equivalent to US$ 23.3 million) expires in 2019.
The average maturity of our debt is 6.1 years and the average cost is 4.8%, mainly due to the impact of these ten-year bond issued in May 2017, with a coupon of 5.375% p.a. We ended the year with low net debt to Adjusted EBITDA ratio of 0.50x.
Net cash provided by operating activities totaled US$ 347.6 million. The lower cash generated by operations in 2018 was driven mainly due to lower gross profit.
We used US$ 158.1 million in net cash flow for investment activities in 2018, mainly due to the higher Capex throughout the year. Net cash flow from financing activities during the year was US$ 177.4 million, including the payment of US$ 80 million share premium in March.
Our cash position as of December 31, 2018 was US$ 1.1 billion considering cash & cash equivalents plus financial investments.
Our investments aligned with the strategic earmarking (Capex) totaled US$ 299.7 million in 2018. The expansion-related portion mainly consisted of deepening the Vazante mine (US$ 47 million) and the tailings dry stack implementation in the same unit (US$ 20 million).
Capex was US$ 40 million higher than expected as we accelerated some investments at the end of the year (approximately US$ 8 million related to the Magistral greenfield project and approximately US$ 7 million related to Vazante). We also accounted for US$ 14 million of operating expenses related to the integration of the El Porvenir and Atacocha mines that were reclassified to Capex, in addition to terms incurred in higher maintenance Capex in Cerro Lindo, due to mine development initiatives.
In addition to investments in Vazante, we completed the FEL3 phase and started the Aripuanã project in Brazil (US$ 19 million), and invested US$ 14 million in the conversion of the Cajamarquilla smelting process to jarosite to boost zinc recovery at the unit.
In 2019, we will increase our Capex compared to 2018, mainly due to the initial investment in the Aripuanã project, our most advanced greenfield project. We received the Aripuanã Installation License on December 20th 2018 and immediately began investments into the construction. We estimate that in 2019 approximately 35% (or US$ 140 million) will be spent on the estimated overall US$ 392 million in investments for this project.
Capex investments (US$ thousand)
During 2018, we repurchased 112,388 common shares at an average price of US$ 12.00 per share for a total of US$ 1,350 million. The repurchased shares represent 0.24% of the free float of common shares outstanding before the launch of the program. Under the program approved by the Board of Directors on September 20, 2018, Nexa may repurchase, directly or indirectly (through its subsidiaries), up to US$ 30 million of its outstanding shares during the 12-month period. The repurchased shares will not be canceled, but will be held in Treasury.