On November 3, 2023, Natural Resources Partners LP (NRP, Financial) released its third quarter 2023 earnings report. The company reported a net income of $63.8 million and operating cash flow of $78.9 million. The free cash flow for the quarter stood at $79.6 million.
Financial Highlights
NRP generated $80 million of free cash flow in Q3 2023. The company also paid a second quarter 2023 common unit distribution of $0.75 per unit. NRP redeemed $50 million of preferred units at par with cash, leaving $72 million of the original $250 million preferred units outstanding. The company also repurchased 812,500 warrants in September and 650,000 warrants in October with $56 million in cash, leaving 1.54 million of the original 4 million warrants outstanding.
NRP had another robust quarter with $80 million of free cash flow generated in the third quarter of 2023 as a result of continued strong performance from our mineral rights assets and a significant cash distribution from our soda ash investment," said Craig Nunez, NRP's president and chief operating officer. "We also made noteworthy progress towards our goal of eliminating all preferred units and warrants by redeeming $50 million of preferred units at par with cash and repurchasing a total of 1.46 million warrants for $56 million in cash."
Segment Performance
The Mineral Rights segment saw a decrease in net income, operating cash flow, and free cash flow for Q3 2023 compared to the prior year period. This was primarily due to certain carbon neutral initiative transactions and higher oil and gas royalty revenues in Q3 2022. The Soda Ash segment's net income decreased due to lower international sales prices and an increased sales mix into the lower-priced international market. However, operating cash flow and free cash flow improved due to a higher cash distribution received from Sisecam Wyoming.
Future Outlook
NRP's board of directors declared a Q3 2023 cash distribution of $0.75 per common unit to be paid on November 21, 2023. The board also declared a $2.15 million cash distribution on NRP's outstanding preferred units. Future distributions will be determined on a quarterly basis by the board of directors.
As of September 30, 2023, NRP's available liquidity was $45.4 million, consisting of $18.4 million of cash and $27.0 million of borrowing capacity available under its revolving credit facility.
Explore the complete 8-K earnings release (here) from Natural Resources Partners LP for further details.
