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NRP Q4 Earnings Drop Y/Y Amid Weak Coal, Soda Ash Prices
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Shares of Natural Resource Partners L.P. (NRP - Free Report) have gained 4.1% since reporting results for the fourth quarter of 2024. This compares with the S&P 500 index’s 1.4% decline over the same time frame. Over the past month, the stock has inched up 1.3% against the S&P 500’s 4.7% decline.
Earnings Overview
Natural Resource Partners reported fourth-quarter 2024 diluted earnings per share of $3.15, a 27% decrease from $4.31 in the prior-year quarter.
Revenues for the quarter were $65.7 million, a 29.5% decrease from $93.2 million in the fourth quarter of 2023. Full-year revenues declined 27.5% year over year to $268 million from $370 million. The drop was primarily led by weaker coal and soda ash pricing, offset by one-time carbon-neutral revenues and lease amendment fees.
NRP reported net income of $42.8 million for the fourth quarter of 2024, down 34.2% from $65 million in the prior-year period. The operating cash flow stood at $66.2 million for the quarter, a decrease from $77.8 million in the prior-year quarter. The free cash flow followed a similar trend, declining to $66.9 million in the fourth quarter from $78.4 million in the year-ago quarter.
Natural Resource Partners LP Price, Consensus and EPS Surprise
The Mineral Rights segment, which includes coal royalties, saw a decline in financial performance. Fourth-quarter net income for the segment fell 17% to $52.4 million from $63.1 million a year ago. Operating and free cash flows also declined $7.6 million and $7.5 million, respectively.
For the year, net income decreased 15.9% to $206.4 million, whereas operating and free cash flows dropped $17.8 million and $17.6 million, respectively. The declines were attributed to lower metallurgical and thermal coal pricing, as well as reduced sales volumes.
Approximately 80% of NRP’s fourth-quarter coal royalty revenues came from metallurgical coal, with 75% for the full year. The segment recorded $12 million in carbon-neutral revenues and lease amendment fees in the fourth quarter, helping offset some of the losses from lower coal prices.
Soda Ash Segment
The Soda Ash segment struggled amid weak global demand and increased production capacity. The fourth-quarter net income plummeted 94.1% to $0.9 million from $14.7 million in the prior-year quarter. Full-year net income also declined 75.4% to $18 million from $73.1 million.
Natural Resource Partners received $39 million in cash distributions from Sisecam Wyoming in 2024, marking a steep $43 million drop from the prior year. The company attributed the downturn to a roughly 60% collapse in soda ash prices, which was driven by excess global supply and weak demand from the construction sector, particularly in China. Management expects the challenging pricing environment to persist for several years.
Management Commentary
During the earnings call, president and COO Craig Nunez emphasized NRP’s ongoing efforts to deleverage and strengthen its balance sheet. The company has reduced more than $1.3 billion in financial obligations over the past decade, leaving only $142 million of debt as of 2024 end.
Natural Resource Partnersalso increased its credit facility by $45 million to $200 million and extended its maturity to 2029. The company continues to focus on improving financial flexibility while maintaining high free cash flow generation.
On commodity markets, management acknowledged that metallurgical and thermal coal prices remain weak and are unlikely to rebound in the near term due to soft global steel demand, low-cost natural gas and high coal inventory levels. However, executives believe that limited coal supply investment, rising production costs and labor shortages will establish a higher long-term price floor than the historical norms.
Soda ash pricing is expected to remain subdued as the market absorbs the excess supply, but Natural Resource Partnersbelieves that its low-cost positioning in Sisecam Wyoming provides resilience in the challenging environment.
Guidance & Outlook
Management has cautioned that 2025 is shaping up to be a difficult year due to continued price pressures across its key commodities. Despite this, NRP remains confident in its ability to generate a significant free cash flow, particularly as debt obligations decline further.
The company also highlighted ongoing carbon-neutral initiatives, including forest carbon sequestration, lithium production and renewable energy projects. However, the carbon sequestration market has been slower to develop than anticipated, and Exxon recently opted not to renew its lease agreement for Natural Resource Partners’ underground carbon dioxide storage site in Baldwin County, AL.
Other Developments
NRP continued its commitment to shareholder returns, distributing $5.44 per common unit in 2024. This included regular quarterly distributions of 75 cents per unit and a special distribution of $2.44 per unit to cover unitholder tax liabilities from 2023. In February 2025, the company declared a fourth-quarter distribution of 75 cents per unit, alongside a special distribution of $1.21 per unit, to offset 2024 tax liabilities.
Additionally, Natural Resource Partnersfully redeemed its remaining preferred units at par, retired all outstanding warrants, and completed its capital restructuring efforts. The company now has no remaining preferred equity or warrant obligations, simplifying its financial structure.
Conclusion
NRP’s fourth-quarter results reflect the challenges posed by declining commodity prices, particularly in its mineral rights and soda ash businesses. While the free cash flow remains strong, lower prices are weighing on earnings.
However, the company’s disciplined approach to deleveraging, coupled with a commitment to shareholder returns, positions it favorably for long-term value creation. Investors will watch how the company navigates ongoing market headwinds while pursuing its carbon-neutral initiatives and maintaining financial flexibility.
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NRP Q4 Earnings Drop Y/Y Amid Weak Coal, Soda Ash Prices
Shares of Natural Resource Partners L.P. (NRP - Free Report) have gained 4.1% since reporting results for the fourth quarter of 2024. This compares with the S&P 500 index’s 1.4% decline over the same time frame. Over the past month, the stock has inched up 1.3% against the S&P 500’s 4.7% decline.
Earnings Overview
Natural Resource Partners reported fourth-quarter 2024 diluted earnings per share of $3.15, a 27% decrease from $4.31 in the prior-year quarter.
Revenues for the quarter were $65.7 million, a 29.5% decrease from $93.2 million in the fourth quarter of 2023. Full-year revenues declined 27.5% year over year to $268 million from $370 million. The drop was primarily led by weaker coal and soda ash pricing, offset by one-time carbon-neutral revenues and lease amendment fees.
NRP reported net income of $42.8 million for the fourth quarter of 2024, down 34.2% from $65 million in the prior-year period. The operating cash flow stood at $66.2 million for the quarter, a decrease from $77.8 million in the prior-year quarter. The free cash flow followed a similar trend, declining to $66.9 million in the fourth quarter from $78.4 million in the year-ago quarter.
Natural Resource Partners LP Price, Consensus and EPS Surprise
Natural Resource Partners LP price-consensus-eps-surprise-chart | Natural Resource Partners LP Quote
Other Key Business Metrics
Mineral Rights Segment
The Mineral Rights segment, which includes coal royalties, saw a decline in financial performance. Fourth-quarter net income for the segment fell 17% to $52.4 million from $63.1 million a year ago. Operating and free cash flows also declined $7.6 million and $7.5 million, respectively.
For the year, net income decreased 15.9% to $206.4 million, whereas operating and free cash flows dropped $17.8 million and $17.6 million, respectively. The declines were attributed to lower metallurgical and thermal coal pricing, as well as reduced sales volumes.
Approximately 80% of NRP’s fourth-quarter coal royalty revenues came from metallurgical coal, with 75% for the full year. The segment recorded $12 million in carbon-neutral revenues and lease amendment fees in the fourth quarter, helping offset some of the losses from lower coal prices.
Soda Ash Segment
The Soda Ash segment struggled amid weak global demand and increased production capacity. The fourth-quarter net income plummeted 94.1% to $0.9 million from $14.7 million in the prior-year quarter. Full-year net income also declined 75.4% to $18 million from $73.1 million.
Natural Resource Partners received $39 million in cash distributions from Sisecam Wyoming in 2024, marking a steep $43 million drop from the prior year. The company attributed the downturn to a roughly 60% collapse in soda ash prices, which was driven by excess global supply and weak demand from the construction sector, particularly in China. Management expects the challenging pricing environment to persist for several years.
Management Commentary
During the earnings call, president and COO Craig Nunez emphasized NRP’s ongoing efforts to deleverage and strengthen its balance sheet. The company has reduced more than $1.3 billion in financial obligations over the past decade, leaving only $142 million of debt as of 2024 end.
Natural Resource Partnersalso increased its credit facility by $45 million to $200 million and extended its maturity to 2029. The company continues to focus on improving financial flexibility while maintaining high free cash flow generation.
On commodity markets, management acknowledged that metallurgical and thermal coal prices remain weak and are unlikely to rebound in the near term due to soft global steel demand, low-cost natural gas and high coal inventory levels. However, executives believe that limited coal supply investment, rising production costs and labor shortages will establish a higher long-term price floor than the historical norms.
Soda ash pricing is expected to remain subdued as the market absorbs the excess supply, but Natural Resource Partnersbelieves that its low-cost positioning in Sisecam Wyoming provides resilience in the challenging environment.
Guidance & Outlook
Management has cautioned that 2025 is shaping up to be a difficult year due to continued price pressures across its key commodities. Despite this, NRP remains confident in its ability to generate a significant free cash flow, particularly as debt obligations decline further.
The company also highlighted ongoing carbon-neutral initiatives, including forest carbon sequestration, lithium production and renewable energy projects. However, the carbon sequestration market has been slower to develop than anticipated, and Exxon recently opted not to renew its lease agreement for Natural Resource Partners’ underground carbon dioxide storage site in Baldwin County, AL.
Other Developments
NRP continued its commitment to shareholder returns, distributing $5.44 per common unit in 2024. This included regular quarterly distributions of 75 cents per unit and a special distribution of $2.44 per unit to cover unitholder tax liabilities from 2023. In February 2025, the company declared a fourth-quarter distribution of 75 cents per unit, alongside a special distribution of $1.21 per unit, to offset 2024 tax liabilities.
Additionally, Natural Resource Partnersfully redeemed its remaining preferred units at par, retired all outstanding warrants, and completed its capital restructuring efforts. The company now has no remaining preferred equity or warrant obligations, simplifying its financial structure.
Conclusion
NRP’s fourth-quarter results reflect the challenges posed by declining commodity prices, particularly in its mineral rights and soda ash businesses. While the free cash flow remains strong, lower prices are weighing on earnings.
However, the company’s disciplined approach to deleveraging, coupled with a commitment to shareholder returns, positions it favorably for long-term value creation. Investors will watch how the company navigates ongoing market headwinds while pursuing its carbon-neutral initiatives and maintaining financial flexibility.