Nickel Industries, which has operations in Indonesia, said on Tuesday it intends to start an on-market share buyback of up to $100 million, while reporting record quarterly output from its rotary kiln electric furnace (RKEF) projects.
The company’s combined sales from its Hengjaya Nickel, Ranger Nickel, Angel Nickel and Oracle Nickel RKEF projects were $492.2 million for the three months to Dec. 31, down 6.1% from the prior quarter, on the back of softer contract prices.
Shares of the firm jumped as much as 15% to A$0.69 and were set for their biggest intraday gain since Oct. 16, 2020.
“The integrated nature of the company’s operations and its position in the bottom quartile of the class-1 and class-2 cost curves has resulted in a significant financial outperformance relative to its global nickel peers,” Nickel Industries said.
A sharp slide in nickel prices over the past year, driven by a jump in Indonesian supply, has hit Australian nickel producers, leading to mine closures, production cuts and writedowns in recent months.
The Australia-listed specialty miner added it has seen a marginal improvement in nickel pig iron (NPI) prices in early 2024, compared with the multi-year lows witnessed in December.
RKEF’s production in the December quarter was 34,450 tonnes of nickel metal, 1.8% higher than the September quarter production.
The company also said it intends to return between 30% and 60% of its free cash flow to shareholders via regular dividends.
(By Shivangi Lahiri; Editing by Krishna Chandra Eluri)