Natural Resource Partners (NRP) Q2 2024 earnings summary

Executive summary

• Generated $57.3 million of free cash flow in Q2 2024 and $287 million over the last twelve months.

• Net income for Q2 2024 was $46.1 million, down from $70.3 million in Q2 2023, reflecting lower coal and soda ash prices but offset by non-recurring gains.

• Revenue for the six months ended June 30, 2024 was $141.95 million, down 25% year-over-year, driven by lower coal and soda ash prices.

• Progressed toward eliminating all financial obligations, reducing them to $240 million, down 35% year-over-year.

• Retired all remaining warrants and redeemed $40 million of preferred units, leaving $31.7 million outstanding.

Financial highlights

• Q2 2024 revenues were $65.5 million, down from $91.3 million in Q2 2023, mainly due to lower soda ash segment performance.

• Q2 2024 net income was $46 million; operating and free cash flow were $57 million.

• Declared and paid a $0.75 per common unit distribution for both Q1 and Q2 2024.

• Paid $2.15 million and $1 million in cash distributions to preferred unit holders for Q1 and Q2, respectively.

• Adjusted EBITDA for Q2 2024 was $57.7 million, down from $83.1 million in Q2 2023.

Outlook and guidance

• Management expects coal and soda ash prices to remain below 2022–2023 highs, with ongoing volatility in both markets.

• Soda ash prices are anticipated to remain low through 2024 and into 2025 as the market absorbs new supply.

• Long-term outlook for soda ash remains positive due to favorable fundamentals.

• The company continues to pursue carbon neutral revenue opportunities, including carbon sequestration and renewable energy projects.

• Anticipate sufficient cash generation to pay down revolver borrowings ahead of maturity.