Natural Resource (NRP) Q3 2026 Earnings Call Transcript

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DATE

Nov. 4, 2026

CALL PARTICIPANTS

• President and Chief Operating Officer – Craig Nunez
• Chief Financial Officer – Chris Zolas
• Executive Vice President – Kevin Craig
• Investor Relations – Tiffany Sammis

TAKEAWAYS

• Free Cash Flow — $44.8 million for the third quarter, driven by strong performance in the Mineral Rights segment.
• Common Unit Distribution — $2.34 per unit for the third quarter, representing a significant increase from the $0.75 distribution paid in the second quarter.
• Debt Repayment — $13.1 million was paid during the quarter to fully retire the Opco credit facility.
• Remaining Debt — $14.3 million as of Sept. 30, with management reporting it expects to repay the balance in Dec. 2026.
• Mineral Rights Free Cash Flow — $47.1 million, an increase of $2.0 million year over year due to higher metallurgical coal pricing and volumes at certain properties.
• Last 12 Months Free Cash Flow — $166 million before accounting for the soda ash business investment made earlier in the year.
• Metallurgical Coal Revenue Mix — 70% of coal royalty revenues and 45% of coal royalty sales volumes were derived from metallurgical coal in the third quarter.
• Total Coal Sales Volumes — 8.2 million tons for the third quarter, an increase from 7.5 million tons in the prior year period.
• Regional Coal Volumes — 6.0 million tons from Appalachia, 1.5 million tons from the Illinois Basin, and 0.5 million tons from the Northern Powder River Basin.
• Average Coal Royalty Revenue — $4.40 per ton, a decrease from $4.51 per ton in the prior year period.
• Soda Ash Segment Net Loss — $4.2 million, compared to a $2.4 million loss in the prior year period, reflecting lower sales prices in an oversupplied international market.
• Soda Ash Distributions — $0 received from Sisecam Wyoming in the third quarter, with management expecting zero distributions until the market returns to equilibrium.
• Net Income — $26.5 million for the third quarter, a decrease of $4.4 million versus the prior year period.
• Operating Cash Flow — $44.0 million for the quarter, compared to $41.1 million in the third quarter of 2025.
• Available Liquidity — $251.7 million at quarter end, comprised of $51.7 million in cash and $200.0 million in revolving credit capacity.
• Interest Expense — $0.6 million for the quarter, a decrease of $1.2 million year over year due to lower outstanding debt.
• Soda Ash Investment — $39.2 million was invested in the soda ash business during the nine months ended Sept. 30, 2026.
• Mineral Rights Net Income — $36.9 million for the quarter, decreasing $3.9 million year over year primarily due to increased depletion expense.
• Diluted Net Income Per Unit — $1.95 per common unit for the third quarter, compared to $2.28 in the prior year period.
• Southern Appalachia Royalty Rate — $11.73 per ton, the highest realized rate among the partnership’s reporting coal basins.

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RISKS

• Nunez stated, “Diesel is up more than 75% this year, which raises costs all along the supply chain and squeezes operator margins,” noting a negative impact on the coal supply chain.
• Nunez reported that the soda ash segment faces “too much supply, too little demand, and no quick fix,” as increased exports from China continue to depress international prices.
• Nunez stated, “International prices have stopped falling, but have settled at levels that are below the cost of production of most producers,” regarding the current soda ash market.
• Management noted that weak global steel demand continues to “keep a lid” on metallurgical coal prices, while cheap natural gas and high stockpiles keep thermal coal prices muted.

SUMMARY

Natural Resource Partners L.P. (NRP +0.51%) reported third quarter results that highlight the completion of a multiyear strategy to de-lever the balance sheet and pivot toward returning capital to unitholders. Management reported that the partnership has nearly eliminated its outstanding debt, enabling a substantial increase in quarterly distributions based on generated free cash flow. The Mineral Rights segment continues to serve as the primary cash generator for the partnership, while the Soda Ash segment remains pressured by an oversupplied international market. The board of directors declared a third quarter distribution of $2.34 per unit, representing a distribution of free cash flow in excess of estimated unitholder tax liabilities.

• Management indicated that the board will evaluate distributions quarterly, weighing results against liquidity needs, unit repurchases, and potential acquisitions.
• Nunez reported that the soda ash market rebalancing is expected to take years to complete as high-cost synthetic plants modernize or shut down.
• The partnership reported that for 2027, current market indicators do not point to a material change in metallurgical or thermal coal pricing.
• Nunez stated that the partnership’s Sisecam Wyoming investment remains one of the lowest-cost soda ash operations globally, providing protection during the current market downturn.
• Management stated that the partnership continues to explore value creation through carbon sequestration and renewable energy on its acreage, although no material developments were reported this quarter.
• Nunez noted that the partnership will continue to apply a strict test for retained cash, requiring the generation of more than a dollar of intrinsic value for every dollar kept by the board.

INDUSTRY GLOSSARY

• Metallurgical Coal: A specialized grade of coal used primarily in the production of steel.
• Thermal Coal: Coal used by utilities and power plants to generate electricity.
• Soda Ash: Sodium carbonate, an industrial chemical used in glass manufacturing, detergents, and chemicals.
• Trona: A sodium-rich mineral mined and processed into soda ash.
• Wheelage: A fee paid for the right to transport coal or other minerals across a property.
• Opco: An abbreviation for an operating company, often a subsidiary that holds assets and debt.
• Free Cash Flow: A measure of financial performance calculated as operating cash flow minus capital expenditures.

Full Conference Call Transcript

Operator: Hello, everyone. Thank you for joining us, and welcome to the Natural Resource Partners L.P. third quarter 2026 earnings conference call. After today’s prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Tiffany Sammis, Investor Relations. Tiffany, please go ahead.

Tiffany Sammis: Thank you. Good morning, and welcome to the Natural Resource Partners Third Quarter 2026 Conference Call. Today’s call is being webcast, and a replay will be available

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