Nickel Industries shares climb on record earnings

Nickel producer Nickel Industries (ASX:NIC) had a stellar day on the ASX after posting record earnings, bolstering its final dividend, and launching a US$100 million share buyback program. 

Shares in the $2.57 billion company climbed more than 20% to $0.72 on 30 January 2024 after the company reported group earnings before interest, tax, depreciation, and amortisation (EBITDA) of US$135.4 million for the December quarter of 2023. 

Nickel Industries reminds investors that this comes against a backdrop of Australian closures and write-downs in the nickel space.

With cash, receivables, and inventory of more than US$1.3 billion at hand at the end of December, the company increased its final dividend by 25% to $0.025 compared the its final 2022 dividend of $0.02. 

The company will also return more profits to shareholders through its on-market buyback program, announced in tandem with its quarterly financial report. 

“We are pleased to report yet another record quarter of EBITDA from operations despite challenging nickel market conditions, which has seen a record number of nickel operations globally become loss-making or stop production. 

The results once again highlight our unique position as one of the world’s largest diversified, low-cost nickel producers. 

Given the two recent back-to-back record quarters which have delivered us EBITDA from operations of US$256 million combined, we are pleased to announce an increased final dividend for 2023 of 2.5 cents per share which is a 25% increase on our 2023 interim dividend of 2 cents per share – this reflects our ability to deliver strong EBITDA and production in a weak nickel price environment and our very strong balance sheet.” 

“The results once again highlight our unique position as one of the world’s largest diversified, low-cost nickel producers”

From the company’s Rotary Kiln Electric Furnace (RKEF), Nickel Industries posted record quarterly production of 34,450 tonnes of nickel metal and record sales of 34,427 nickel metal tonnes.

However, softer nickel prices over the December quarter meant quarterly EBITDA from RKEF came in at US$85.1 million compared to the September quarter’s US$97.6 million. 

Meanwhile, Nickel Industries’ 10% share of production from the Huayue Nickel Cobalt Project contributed US$8.3 million to quarterly EBITDA.

Finally, the company also posted record nickel ore production of 4.26 million wet metric tons from its Hengjaya Mine, resulting in record Hengjaya EBITDA of US$42 million compared to the September quarter’s US$23.1 million. 

Hengjaya also received a ‘Green PROPER’ rating from the Indonesian Environmental and Forestry Department for the second year in a row, which Werner says reflects the company’s continued focus on being an environmental, social, and governance (ESG) leader in the country. 

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Images: Nickel Industries
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Written By Joshua Smith
Joshua Smith has years of experience in the media sector, having worked as a markets reporter, features writer, and editor since completing a Communications and Journalism degree and a Creative Writing degree. Josh is an avid board game fan and a self-professed coffee snob.