MOSCOW - Russian metals and mining giant Norilsk Nickel is not yet generating free cash flow on a stable enough basis to resume dividend payments, but does not rule out doing so in future, head of investor relations Mikhail Borovikov told reporters on Thursday.

Nornickel this year failed to pay dividends on its 2022 results for the first time in 14 years, citing "negative geopolitics" without explicitly mentioning the Ukraine conflict and the Western economic sanctions it has triggered.

Borovikov said the decision on dividends rested with the two key shareholders.

"What could influence [their decision] is, of course, the company's ability to generate free cash flow without jeopardising capital investment, jeopardising debt, jeopardising normal operations," he said.

"Now the situation with cash flow is improving, but we would not say that all the risks are behind us ... When we understand that we have reached a normal cash flow track, then we would, of course, like to use cash flow as a basis for the payment of dividends."

Free cash flow increased by 28% in the first half, year-on-year, to $1.3-billion. In all of 2022, it decreased by 25% to $1.1-billion.

Dividends are a sensitive subject for Nornickel.

Disagreements on the issue have for years been the main reason for on-and-off rows between its powerful main owners, chief executive and largest shareholder Vladimir Potanin and aluminium producer Rusal.

A decade-old shareholder agreement protecting dividend payouts expired at the end of 2022, again putting them at odds.

Borovikov said it was a sound idea to buy back shares from non-residents, following the example of Russia's Magnit, but that Nornickel was not considering the issue since it required the diversion of significant funds.

It is, however, seriously considering a share split to boost market liquidity, Borovikov said.

Nornickel's shares were trading down around 1.8% at 1647 GMT in Moscow at 16 592 roubles, off an earlier low at 16,376.