Signature Sponsor
Natural Resource Partners L.P. Reports Fourth Quarter and Full Year 2018 Results

 

 

March 8, 2019 - "NRP ended the year delivering another robust quarter of financial results, highlighted by the favorable Hillsboro settlement and the successful sale of our construction aggregates business," stated NRP’s President and Chief Operating Officer, Craig Nunez. “We generated significant amounts of cash from operations as we continued to see strong demand for our metallurgical and thermal coal throughout 2018. Additionally, the sale of our construction aggregates business for $205 million accelerated the de-levering and de-risking of our capital structure as we used the net cash proceeds to repay $143 million of debt to date, and plan to use the remaining proceeds to repay our Opco notes as they amortize in 2019, all at par value. This has been a transformative year for NRP and we are focused on continuing to position the company for a more secure future.”


NRP's liquidity was $306.0 million at December 31, 2018, consisting of $101.8 million of cash, $104.2 million of cash restricted for debt repayment ($49 million of which was used to repay Opco notes in January 2019) and $100.0 million of borrowing capacity available under its credit facility. NRP's consolidated Debt-to-Adjusted EBITDA ratio at December 31, 2018 was 3.0x, down over 15% from 2017 and down over 40% from the high of 5.3x at year-end 2015.


NRP declared a cash distribution of $0.45 per common unit and a cash distribution of $7.5 million on NRP’s preferred units for the fourth quarter of 2018. NRP's distribution coverage ratio over the last twelve months, excluding proceeds from sale of assets included in discontinued operations, was 8.4x before taking into account the $30 million annual distribution on NRP's preferred units, and 7.1x after taking into account the preferred unit distribution.


Coal Royalty and Other


Total coal production and the average coal royalty revenue per ton remained stable compared to the prior year quarter as NRP continued to see strong coal pricing driven by solid export demand and stable domestic markets for metallurgical and thermal coal. Approximately 65% of NRP's coal royalty revenues and approximately 45% of its coal royalty production was derived from metallurgical coal during the three months ended December 31, 2018.


Net income and Adjusted EBITDA increased compared to the prior year quarter primarily as a result of the $25 million Hillsboro litigation settlement; Net income was partially offset by a $16.8 million increase in non-cash asset impairments.


Distributable cash flow and Free cash flow increased compared to the prior year quarter primarily as a result of the $25 million Hillsboro litigation settlement and increased cash receipts from higher metallurgical prices and production.


Soda Ash


Soda Ash segment operating performance was consistent with the prior year quarter as improved international sales pricing during the fourth quarter of 2018 was partially offset by increased freight costs.


Adjusted EBITDA, Distributable cash flow and Free cash flow decreased $2.5 million due to lower fourth quarter cash distributions received from Ciner Wyoming.


Corporate and Finance


Corporate and Finance segment Net income, Free cash flow and Distributable cash flow results improved compared to the prior year quarter primarily due to lower interest as a result of continued repayment of debt.


Coal Royalty and Other


Full year 2018 total coal production remained stable and the average coal royalty revenue per ton increased as a result of higher metallurgical and thermal coal prices and higher metallurgical coal production driven by solid export demand and stable domestic markets for metallurgical and thermal coal, partially offset by lower thermal coal production as a result of capital constraints and declining overall demand for certain of our lessees, as well as temporary relocation of certain production off of NRP's coal reserves in the Illinois Basin. Approximately 65% of NRP's coal royalty revenues and approximately 55% of its coal royalty production was derived from metallurgical coal during the year ended December 31, 2018.


Net income and Adjusted EBITDA increased compared to the prior year primarily as a result of the $25 million Hillsboro litigation settlement; Net income was partially offset by a $15.3 million increase in non-cash asset impairments.


Distributable cash flow and Free cash flow increased compared to the prior year primarily as a result of the $25 million Hillsboro litigation settlement in addition to increased cash receipts from higher metallurgical prices and production and increased cash from other revenues.


Soda Ash


Soda Ash segment operating performance increased compared to the prior year primarily as a result of Ciner Wyoming's litigation settlement of a royalty dispute that resulted in $12.7 million of income. This increase was partially offset by a $4.9 million decrease in income primarily due to lower production and sales resulting from unexpected repairs during scheduled outages and ore grade degradation.


Adjusted EBITDA, Distributable cash flow and Free cash flow decreased $2.5 million compared to the prior year as a result of lower cash distributions received from Ciner Wyoming in the fourth quarter of 2018.


Corporate and Finance

 

Corporate and Finance segment results improved compared to the prior year primarily due to lower interest as a result of continued repayment of debt and lower employee-related costs. 

 

To read the full results with financial figures, click here