Natural Resource Partners Q2 Earnings Call Highlights

Natural Resource Partners Q2 Earnings Call Highlights

Natural Resource Partners NYSE: NRP reported second-quarter 2026 net income of $25 million, operating cash flow of $41 million and free cash flow of $42 million, as its mineral rights business continued to provide cash generation despite challenges in coal and soda ash markets. President and Chief Operating Officer Craig Nunez said the partnership generated $163 million of free cash flow over the trailing 12 months before accounting for the $39 million invested in its soda ash business during the first quarter. He also said NRP repaid its bank revolver in July and now has $14 million of debt remaining.

“Barring something unforeseen, we intend to raise distributions significantly in November,” Nunez said.

Mineral Rights Segment Remains Primary Cash Generator NRP’s mineral rights segment generated $36 million of net income and $45 million in both operating cash flow and free cash flow during the second quarter. Segment net income declined $3 million from the prior-year quarter, largely reflecting higher depreciation, depletion and amortization expense following revised mine plans at certain longwall thermal coal mines, which increased per-ton depletion rates. The decline was partly offset by higher revenue from increased metallurgical and thermal coal volumes and pricing at certain properties, Chief Financial Officer Chris Zolas said. Operating cash flow and free cash flow in the mineral rights segment each declined $1 million year over year. Zolas attributed the change primarily to higher recoupments during the quarter, partly offset by increased cash received from minimum payments. Metallurgical coal represented about 70% of NRP’s coal royalty revenue and 45% of coal royalty sales volumes in the second quarter, according to Zolas. Nunez said both metallurgical and thermal coal markets had stabilized and improved modestly from recent lows, though he declined to predict commodity-price movements. He emphasized that the mineral rights segment has consistently produced cash through coal cycles. On thermal coal, Nunez said higher oil prices can encourage associated natural gas production, potentially pressuring North American thermal coal prices. He also cited increasingly competitive renewable energy as a long-term headwind for thermal coal.

Soda Ash Results Pressured by Oversupply NRP’s soda ash segment generated $7 million of net income during the quarter, down from the prior-year period as international soda ash oversupply reduced selling prices and demand for flat glass weakened. Operating cash flow and free cash flow for the soda ash segment each fell $5 million from a year earlier. The decline reflected the absence of a distribution from Sisecam Wyoming in the second quarter, compared with a $5 million distribution received in the same quarter last year. Zolas said NRP does not expect dis...