On February 28, 2025, Natural Resources Partners LP (NRP, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year of 2024. The company, a diversified natural resource entity, manages a portfolio of mineral properties in the United States, including coal, trona, soda ash, and other resources. NRP operates primarily through its Mineral Rights and Soda Ash segments, with the majority of revenue generated from the Mineral Rights segment.
Financial Performance and Challenges
NRP reported a net income of $42.8 million for the fourth quarter and $183.6 million for the full year of 2024. Operating cash flow stood at $66.2 million for the quarter and $248.5 million for the year, while free cash flow was $66.9 million and $251.2 million, respectively. Despite these figures, the company faced challenges due to lower metallurgical and thermal coal pricing, which impacted the Mineral Rights segment. The decrease in coal prices was attributed to muted steel demand and mild weather conditions, among other factors.
Key Financial Achievements
NRP achieved significant financial milestones in 2024, including generating $251 million in free cash flow and redeeming $72 million of preferred units at par. The company also repurchased 1.54 million warrants, leaving none outstanding. Additionally, NRP executed a five-year $200 million credit facility maturing in 2029, enhancing its financial flexibility.
Segment Performance
The Mineral Rights segment experienced a decrease in net income by $10.7 million in the fourth quarter and $39.1 million for the full year compared to the previous year. This was primarily due to lower coal pricing and volumes. The Soda Ash segment also faced challenges, with net income decreasing by $13.9 million in the fourth quarter and $55.2 million for the year, driven by lower international sales prices and weaker global demand.
Corporate and Financing Developments
NRP's corporate and financing costs decreased by $2.4 million in the fourth quarter due to lower employee and interest expenses. However, for the full year, these costs increased by $0.5 million due to higher interest expenses from revolver draws used to redeem preferred units and warrants. The company's consolidated leverage ratio was 0.6x at the end of 2024, reflecting its efforts to de-leverage and de-risk its financial position.
Special Distribution and Future Outlook
NRP declared a special cash distribution of $1.21 per common unit to cover unitholder tax liabilities for 2024. The board of directors will determine future distributions on a quarterly basis, considering factors such as profitability, cash flow, and market conditions. Despite the challenges in coal and soda ash markets, NRP remains committed to maximizing intrinsic value per unit.
“In 2024, NRP generated $251 million of free cash flow, redeemed all of the remaining 12% preferred units, retired all outstanding warrants, and ended the year with only $142 million of financial obligations, solely consisting of debt,” said Craig Nunez, NRP's president & chief operating officer.
Conclusion
Natural Resources Partners LP navigated a challenging year with strategic financial maneuvers and a focus on de-leveraging. While market conditions for coal and soda ash remain difficult, the company's efforts to enhance liquidity and reduce financial obligations position it for potential future growth. Investors and stakeholders will be keenly watching how NRP adapts to ongoing market dynamics and capitalizes on its diversified resource portfolio.
Explore the complete 8-K earnings release (here) from Natural Resources Partners LP for further details.
