ASX 200 Undervalued Stock Paying Dividends

Team Veye | 10-Dec-2024

The best stocks of growing companies to invest in often have good growth potential. A few of these are also quality dividend stocks. One such stock for stable passive income is

Nickel Industries Limited (ASX: NIC)

Nickel Industries Limited, among the ASX best long term dividend stocks delivered a strong financial performance in the September 2024 quarter, achieving an EBITDA of US$108.4 million from operations. This was driven by higher earnings from the Hengjaya Mine and a notable improvement in the RKEF operations. The company produced 30,663 tonnes of nickel metal (on a 100% basis) from its RKEF projects, a 4.1% decline compared to the previous quarter due to planned maintenance at the Ranger Nickel (RNI) facility and regulatory issues at the Ranger Kalimantan Nickel (RKAB) site. Despite lower production, RKEF EBITDA increased 43.5% to US$60.0 million, reflecting stronger margins. The Hengjaya Mine contributed US$37.3 million in EBITDA, a significant 51.6% rise from the prior quarter, because of increased ore sales and the maiden dividend distribution from the operation. 

In terms of expansion, the company made notable strides with the conditional acquisition of the Sampala Project, a highly prospective nickel-cobalt project located close to its existing operations in Indonesia. The Sampala Project covers 6,654 hectares and contains an initial JORC-compliant resource of 2.3 million tonnes of contained nickel. This acquisition, which is expected to be finalized in 2025, will boost the company’s ore supply and enhance its self-sufficiency in nickel production. The project is approved for mining, and its development is well-advanced with the acquisition of 7,192 hectares of land, preliminary geological models, and metallurgical test work confirming its suitability for both HPAL and RKEF processing.

Nickel Industries is also making significant progress in its HPAL projects. The Huayue Nickel Cobalt (HNC) Project produced 21,248 tonnes of nickel and 2,017 tonnes of cobalt in the quarter, with the company’s share amounting to 2,125 tonnes of nickel. The project’s underlying EBITDA for the quarter was US$90.3 million. Additionally, the Excelsior Nickel Cobalt (ENC) project, in which the company holds a 44% interest, continues to progress towards construction, with the site prepared for the arrival of critical equipment from international suppliers. The ENC project aims to diversify the company’s production base with Class 1 nickel and intermediary nickel from HPAL processing.

Nickel Industries also continues to prioritize sustainability and ESG (Environmental, Social, and Governance) efforts. During the quarter, the company was recognized for its progress in ESG performance, with improved ratings from third-party agencies like S&P Global. The Hengjaya Mine achieved a significant milestone by receiving approval to develop a conservation biodiversity area within its mining concession. This area will protect endemic flora and fauna and serve as a site for research and education, reflecting the company's commitment to responsible mining practices and environmental stewardship.

Source: Company’s Report

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