Nickel Industries Ltd (ASX: NIC) shares are having a very strong session.
In morning trade, the ASX 200 nickel stock is up 17% to 70.5 cents.
Image source: Getty Images
Why is this ASX 200 stock jumping?
There are a couple of reasons why investors have been buying this nickel producer's shares on Tuesday.
The first is the release of a quarterly update which revealed record production and sales volumes.
According to the release, production came in at a record of 34,450 tonnes of nickel metal. This is up from 29,367 tonnes during the previous quarter.
This allowed the ASX 200 stock to sell a record 34,427 tonnes of nickel metal. This was an 18% increase on the prior corresponding period.
There were no records for its earnings, though. Softer pricing led to EBITDA falling quarter on quarter to US$85.1 million from US$97.6 million.
Nevertheless, at the end of the quarter the company had cash, receivables, and inventory of US$1,302.5 million.
What else is happening?
Also getting investors excited was news that the ASX 200 stock is planning to return funds to investors through an on-market share buyback.
Nickel Industries intends to return up to US$100 million of additional capital to shareholders over the next 12 months, in addition to dividends.
Speaking of dividends, this morning the company announced a revised dividend policy. The new policy will see between 30% and 60% of free cash flow returned to shareholders by way of regular dividends declared on an interim and final basis each financial year.
The ASX 200 stock's managing director, Justin Werner, said:
Nickel Industries has transitioned into a position to target higher shareholder returns via our new Capital Management Framework through strong operating performance. The revised dividend policy represents a significant uplift from existing dividend levels and will allow for greater returns to shareholders. We are pleased to announce an initial on-market share buyback as we strongly believe the current share price undervalues the Company.
