Shares of Pure Useful resource Companions L.P. NRP have gained 4.1% since reporting outcomes for the fourth quarter of 2024. This compares with the S&P 500 index’s 1.4% decline over the identical timeframe. Over the previous month, the inventory has inched up 1.3% in opposition to the S&P 500’s 4.7% decline.
Earnings Overview
Pure Useful resource Companions reported fourth-quarter 2024 diluted earnings per share of $3.15, a 27% lower from $4.31 within the prior-year quarter.
Revenues for the quarter have been $65.7 million, a 29.5% lower from $93.2 million within the fourth quarter of 2023. Full-year revenues declined 27.5% yr over yr to $268 million from $370 million. The drop was primarily led by weaker coal and soda ash pricing, offset by one-time carbon-neutral revenues and lease modification charges.
NRP reported web earnings of $42.8 million for the fourth quarter of 2024, down 34.2% from $65 million within the prior-year interval. The working money move stood at $66.2 million for the quarter, a lower from $77.8 million within the prior-year quarter. The free money move adopted the same pattern, declining to $66.9 million within the fourth quarter from $78.4 million within the year-ago quarter.
Pure Useful resource Companions LP Value, Consensus and EPS Shock
Natural Resource Partners LP price-consensus-eps-surprise-chart | Pure Useful resource Companions LP Quote
Different Key Enterprise Metrics
Mineral Rights Section
The Mineral Rights phase, which incorporates coal royalties, noticed a decline in monetary efficiency. Fourth-quarter web earnings for the phase fell 17% to $52.4 million from $63.1 million a yr in the past. Working and free money flows additionally declined $7.6 million and $7.5 million, respectively.
For the yr, web earnings decreased 15.9% to $206.4 million, whereas working and free money flows dropped $17.8 million and $17.6 million, respectively. The declines have been attributed to decrease metallurgical and thermal coal pricing, in addition to decreased gross sales volumes.
Roughly 80% of NRP’s fourth-quarter coal royalty revenues got here from metallurgical coal, with 75% for the total yr. The phase recorded $12 million in carbon-neutral revenues and lease modification charges within the fourth quarter, serving to offset among the losses from decrease coal costs.
Soda Ash Section
The Soda Ash phase struggled amid weak world demand and elevated manufacturing capability. The fourth-quarter web earnings plummeted 94.1% to $0.9 million from $14.7 million within the prior-year quarter. Full-year web earnings additionally declined 75.4% to $18 million from $73.1 million.
Pure Useful resource Companions obtained $39 million in money distributions from Sisecam Wyoming in 2024, marking a steep $43 million drop from the prior yr. The corporate attributed the downturn to a roughly 60% collapse in soda ash costs, which was pushed by extra world provide and weak demand from the development sector, notably in China. Administration expects the difficult pricing surroundings to persist for a number of years.
Administration Commentary
Throughout theearnings name president and COO Craig Nunez emphasised NRP’s ongoing efforts to deleverage and strengthen its stability sheet. The corporate has decreased greater than $1.3 billion in monetary obligations over the previous decade, leaving solely $142 million of debt as of 2024 finish.
Pure Useful resource Partnersalso elevated its credit score facility by $45 million to $200 million and prolonged its maturity to 2029. The corporate continues to concentrate on bettering monetary flexibility whereas sustaining excessive free money move technology.
On commodity markets, administration acknowledged that metallurgical and thermal coal costs stay weak and are unlikely to rebound within the close to time period because of tender world metal demand, low-cost pure gasoline and excessive coal stock ranges. Nevertheless, executives imagine that restricted coal provide funding, rising manufacturing prices and labor shortages will set up a better long-term worth flooring than the historic norms.
Soda ash pricing is predicted to stay subdued because the market absorbs the surplus provide, however Pure Useful resource Partnersbelieves that its low-cost positioning in Sisecam Wyoming gives resilience within the difficult surroundings.
Steering & Outlook
Administration has cautioned that 2025 is shaping as much as be a troublesome yr because of continued worth pressures throughout its key commodities. Regardless of this, NRP stays assured in its skill to generate a major free money move, notably as debt obligations decline additional.
The corporate additionally highlighted ongoing carbon-neutral initiatives, together with forest carbon sequestration, lithium manufacturing and renewable vitality initiatives. Nevertheless, the carbon sequestration market has been slower to develop than anticipated, and Exxon not too long ago opted to not renew its lease settlement for Pure Useful resource Companions’ underground carbon dioxide storage website in Baldwin County, AL.
Different Developments
NRP continued its dedication to shareholder returns, distributing $5.44 per frequent unit in 2024. This included common quarterly distributions of 75 cents per unit and a particular distribution of $2.44 per unit to cowl unitholder tax liabilities from 2023. In February 2025, the corporate declared a fourth-quarter distribution of 75 cents per unit, alongside a particular distribution of $1.21 per unit, to offset 2024 tax liabilities.
Moreover, Pure Useful resource Partnersfully redeemed its remaining most well-liked models at par, retired all excellent warrants, and accomplished its capital restructuring efforts. The corporate now has no remaining most well-liked fairness or warrant obligations, simplifying its monetary construction.
Conclusion
NRP’s fourth-quarter outcomes replicate the challenges posed by declining commodity costs, notably in its mineral rights and soda ash companies. Whereas the free money move stays robust, decrease costs are weighing on earnings.
Nevertheless, the corporate’s disciplined strategy to deleveraging, coupled with a dedication to shareholder returns, positions it favorably for long-term worth creation. Buyers will watch how the corporate navigates ongoing market headwinds whereas pursuing its carbon-neutral initiatives and sustaining monetary flexibility.
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