Mesa Royalty Trust (MTR) Q2 2024 earnings summary

Executive summary

• Q2 royalty income fell to $305,372 from $1.78M YoY; distributable income was $223,651, or $0.1200/unit, versus $1.60M, or $0.8575/unit.

• H1 royalty income was $489,029 versus $2.62M YoY; distributable income was $345,680, or $0.1855/unit, versus $2.32M, or $1.2463/unit.

Financial highlights

• Q2 interest income was $24,417 versus $22,936; G&A expense rose to $59,138 from $54,275.

• H1 interest income increased to $48,645 from $43,023; G&A expense declined to $105,330 from $120,349.

• Cash and short-term investments were $2.03M at June 30, 2024, compared with $2.10M at Dec. 31, 2023.

Outlook and guidance

• The Trustee intends to build the Contingent Reserve to $2.0M; timing and additions will be determined monthly and may reduce cash available for distributions.

• Reserve funding needs and lower royalty receipts could limit or eliminate material distributions during the remainder of 2024 and beyond.

• Higher inflation, interest rates, and supply-chain disruptions are expected to raise operator expenses and adversely affect royalty income during 2024.