Nok Corp. shares rose sharply Thursday after the Japanese company announced plans to sell a chunk of its stockholdings and return at least 67.5 billion yen ($501.0 million) to shareholders through dividends and buybacks over the next three years.
The shares were 16% higher at Y1,780 at the end of the morning session after rising as much as 25% earlier.
The Japanese maker of oil seal and other industrial and electronic products said Wednesday after market close that it would sell a quarter of its policy stockholdings in terms of market value and distribute at least Y37.5 billion in total dividends by the fiscal year ending March 2026.
Nok said it would also buy back Y10.0 billion worth of its own shares in the fiscal year that started in April and decide on additional repurchases for the following years.
The company held Y110.66 billion of stocks on its balance sheet as of the end of March 2022, including shares of Toyota Motor Corp., Daikin Industries Ltd. and Mitsubishi UFJ Financial Group Inc. Nok has said it holds stocks of its business partners partly in anticipation of better business relationships.
The size of planned dividends and buybacks are large relative to the company’s earnings. In February, Nok projected net profit to drop 59% to Y10.50 billion on revenue of Y717.40 billion for the fiscal year ended March 31.