Natural Resource Partners LP (NRP) 2024 Q4 法說會逐字稿

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Natural Resource Partners LP fourth quarter 2024 earnings conference call. (Operator Instructions)

感謝您的支持。我叫凱特，今天我將擔任您的會議主持人。現在，我歡迎大家參加 Natural Resource Partners LP 2024 年第四季財報電話會議。（操作員指令）

I would now like to turn the call over to Tiffany Sammis, Investor Relations. Please go ahead.

現在我想將電話轉給投資者關係部的 Tiffany Sammis。請繼續。

Thank you. Good morning, and welcome to the Natural Resource Partners fourth quarter 2024 conference call. Today's call is being webcast, and a replay will be available on our website. Joining me today are Craig Nunez, President and Chief Operating Officer; Chris Zolas, Chief Financial Officer; and Kevin Craig, Executive Vice President.

謝謝。早上好，歡迎參加自然資源合作夥伴 2024 年第四季電話會議。今天的電話會議將進行網路直播，重播將在我們的網站上提供。今天與我一起出席的還有總裁兼營運長 Craig Nunez；財務長 Chris Zolas；以及執行副總裁凱文·克雷格（Kevin Craig）。

Some of our comments today may include forward-looking statements reflecting NRP's views about future events. These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward-looking statements.

我們今天的一些評論可能包括反映 NRP 對未來事件的看法的前瞻性陳述。這些事項涉及風險和不確定性，可能導致我們的實際結果與我們的前瞻性陳述有重大差異。

These risks are discussed in NRP's Form 10-K and other Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP measures are included in our fourth quarter press release, which can be found on our website.

NRP 的 10-K 表格和其他證券交易委員會文件中討論了這些風險。我們不承擔因任何原因修改或公開更新任何前瞻性聲明的義務。我們今天的評論還包括非公認會計準則財務指標。我們的第四季新聞稿中包含了更多詳細資訊以及與最直接可比較的 GAAP 指標的對賬，您可以在我們的網站上找到。

I would like to remind everyone that we do not intend to discuss the operations or outlook for any particular coal lessee or detailed market fundamentals.

我想提醒大家，我們無意討論任何特定煤炭租賃商的營運或前景或詳細的市場基本面。

Now I would like to turn the call over to Craig Nunez, our President and Chief Operating Officer.

現在我想將電話轉給我們的總裁兼營運長克雷格·努涅斯（Craig Nunez）。

Thank you, Tiffany, and good morning, everyone. NRP generated $251 million of free cash flow, redeemed all remaining preferred units and settled all outstanding warrants in 2024. Additionally, we increased our credit facility capacity by $45 million to $200 million, and extended the maturity date of that facility by two years to 2029.

謝謝你，蒂芙尼，大家早安。NRP 產生了 2.51 億美元的自由現金流，贖回了所有剩餘的優先股，並於 2024 年結清了所有未償還的認股權證。此外，我們將信貸額度增加了 4,500 萬美元，達到 2 億美元，並將該信貸額度的到期日延長兩年至 2029 年。

We remain steadfast in our commitment to delever and derisk the partnership, which we believe is the best way to maximize intrinsic value per unit. We have paid off over $1.3 billion of financial obligations over the last 10 years and currently have only $142 million of debt remaining.

我們始終堅定不移地致力於降低合作關係的槓桿率和風險，我們認為這是實現單位內在價值最大化的最佳方式。我們在過去 10 年裡已經償還了超過 13 億美元的債務，目前僅剩 1.42 億美元的債務。

Metallurgical and thermal coal prices dropped by half last year from the highs seen in 2023. We do not expect coal prices to rebound in the near term due to soft global steel demand low-priced North American natural gas and high coal inventory levels at electric generating facilities.

去年，冶金煤和動力煤價格較 2023 年的高點下跌了一半。由於全球鋼鐵需求疲軟、北美天然氣價格低廉以及發電廠煤炭庫存水準高，我們預期煤炭價格短期內不會反彈。

Over the long term, we believe limited investment in new coal supply increased production costs, labor shortages and ongoing secular demand trends for steel should provide support for metallurgical coal prices at higher levels when compared to long-term historical norms.

從長期來看，我們認為，新煤炭供應投資有限、生產成本增加、勞動力短缺以及鋼鐵持續的長期需求趨勢，應為冶金煤價格提供支撐，使其價格相對於長期歷史標準處於更高水平。

Thermal coal prices should also benefit from limited new investment, increased production costs and labor shortages. However, we expect these factors to be more than offset by the continued long-term secular decline in North American thermal demand.

動力煤價格也應受益於有限的新投資、生產成本增加和勞動力短缺。然而，我們預計這些因素的影響將被北美火力發電需求的長期持續下滑所抵消。

Turning to Soda Ash. We received $39 million in cash distributions from Sisecam Wyoming in 2024, a decrease of $43 million from the previous year. Global Soda Ash prices fell roughly 60% from the record highs of 2023 as the market was flooded with new production capacity and demand for flight class waned primarily due to slowing construction activity in China.

轉向純鹼。2024 年，我們從 Sisecam Wyoming 獲得了 3,900 萬美元的現金分配，比前一年減少了 4,300 萬美元。由於市場湧入大量新產能，且中國建築活動放緩導致艙位需求減弱，全球純鹼價格較 2023 年的歷史高點下跌約 60%。

These macroeconomic factors have created the most difficult market for soda ash producers in decades with sales prices currently below production costs for many producers. We believe it will take several years for the market to fully absorb excess capacity and drive prices materially higher.

這些宏觀經濟因素導致純鹼生產商面臨數十年來最艱難的市場，目前許多生產商的銷售價格低於生產成本。我們認為，市場需要幾年時間才能完全吸收過剩產能並大幅推高價格。

Sisecam Wyoming is not immune to these challenges, and we expect distributions paid to us to remain below historical levels for the next several years. But as one of the world's lowest cost producers, we believe we are well positioned to manage through this environment.

Sisecam Wyoming 並不能免受這些挑戰的影響，我們預計未來幾年支付給我們的分配額仍將低於歷史水平。但作為世界上成本最低的生產商之一，我們相信我們有能力應對這種環境。

Regarding our carbon-neutral initiatives, we continue to explore opportunities to lease our mineral and surface assets for permanent underground carbon dioxide sequestration, forest carbon sequestration, lithium production and the generation of electricity using geothermal, wind and solar energy.

關於我們的碳中和計劃，我們繼續探索機會租賃我們的礦產和地面資產，用於永久性地下二氧化碳封存、森林碳封存、鋰生產以及利用地熱、風能和太陽能發電。

Geothermal and leasing -- lithium leasing activity has picked up recently, but CO2 sequestration activity remains lackluster. Furthermore, Exxon has notified us that they will not be renewing their carbon dioxide sequestration lease in 2022 on our -- executed in 2022 on our Baldwin County, Alabama acreage.

地熱和租賃－鋰租賃活動最近有所回升，但二氧化碳封存活動仍低迷。此外，埃克森美孚已通知我們，他們將不會在 2022 年續約我們在阿拉巴馬州鮑德溫縣土地上的二氧化碳封存租約。

While we believe potential significant upside exists with our carbon-neutral assets in general and our CO2 sequestration for space, specifically, political, regulatory and market uncertainty continues to pose a challenge for developers contemplating large capital investments.

雖然我們相信我們的碳中和資產總體上以及太空二氧化碳封存方面具有巨大的潛在上升空間，但具體而言，政治、監管和市場不確定性仍然對考慮進行大規模資本投資的開發商構成挑戰。

2025 is shaping up to be a difficult year for our three key commodities. Lower prices will lead to lower free cash flow generation compared to recent years. But due to the dramatic strides made to delever the business, the NRP finds itself in a more attractive financial position today than at any time in over a decade. We are conservatively financed, generating large amounts of free cash flow relative to our remaining debt, with the potential for noteworthy increases in cash available for common unitholders as debt is paid off next year.

對於我們的三種主要商品來說，2025 年將會是艱難的一年。與最近幾年相比，價格下降將導致自由現金流產生減少。但由於在降低業務槓桿方面取得了巨大進步，NRP 發現其當前的財務狀況比十多年來的任何時候都更具吸引力。我們的融資比較保守，相對於剩餘債務，我們產生了大量的自由現金流，而且隨著明年債務的償還，普通股持有人可用的現金有可能顯著增加。

And with that, I'll turn it over to Chris for our financials.

說完這些，我會把我們的財務問題交給克里斯。

Thank you, Craig. In the fourth quarter of 2024, NRP generated $43 million of net income, $66 million of operating cash flow, and $67 million of free cash flow. For full year 2024, NRP generated $184 million of net income, a $248 million of operating cash flow and $251 million of free cash flow.

謝謝你，克雷格。2024 年第四季度，NRP 創造了 4,300 萬美元的淨收入、6,600 萬美元的營運現金流和 6,700 萬美元的自由現金流。2024 年全年，NRP 創造了 1.84 億美元的淨收入、2.48 億美元的營運現金流和 2.51 億美元的自由現金流。

In Q4, our Mineral Rights segment generated $52 million of net income, and $63 million of both operating and free cash flow. For the full year, the segment generated $206 million of net income, $242 million of operating cash flow, and $245 million of free cash flow.

第四季度，我們的礦產權部門創造了 5,200 萬美元的淨收入以及 6,300 萬美元的營運現金流和自由現金流。全年該部門創造了 2.06 億美元的淨收入、2.42 億美元的營運現金流和 2.45 億美元的自由現金流。

When compared to the prior year's fourth quarter, our mineralized segment net income decreased $11 million and both operating and free cash flow decreased $8 million. These decreases were primarily due to weaker coal demand that resulted in lower met thermal coal sales prices. However, they were partially offset by $12 million of revenues and $15 million of cash flow from onetime transactions in Q4 that primarily consisted of forest-related carbon neutral revenue and lease amendment fees.

與去年同期第四季相比，我們的礦化部門淨收入減少了 1,100 萬美元，營運現金流和自由現金流都減少了 800 萬美元。下降的主要原因是煤炭需求減弱，導致動力煤銷售價格下降。然而，這些收入和現金流部分抵消了第四季度的 1200 萬美元收入和 1500 萬美元一次性交易產生的現金流，這些交易主要包括與森林相關的碳中和收入和租約修改費用。

Full year 2024 net income compared to the prior year for our Mineral Rights segment decreased $39 million, and both operating and free cash flow decreased $18 million. Like the quarter-to-date variance, the full year decreases were primarily due to weaker coal markets in 2024 that resulted in lower met and thermal coal sales prices.

2024 年全年礦產權部門淨收入與前一年相比減少了 3,900 萬美元，營運現金流和自由現金流均減少了 1,800 萬美元。與本季迄今的差異一樣，全年下降主要是由於 2024 年煤炭市場疲軟導致冶金煤和動力煤銷售價格下降。

These full year decreases were partially offset by $23 million in revenue and $30 million of cash flow from onetime transactions that primarily consisted of forest-related carbon-neutral revenue, lease amount of fees, a pipeline-driven lost coal settlement, and recovery of disputed oil and gas royalties.

這些全年下降部分被 2,300 萬美元的收入和 3,000 萬美元的一次性交易現金流所抵消，這些交易主要包括與森林相關的碳中和收入、租賃費用、管道驅動的煤炭損失和解以及有爭議的石油和天然氣使用費的追償。

Regarding NRP's Q4 met thermal coal royalty mix, met coal made up approximately 80% of our coal royalty revenues and 60% of coal royalty sales volumes. And for full year 2024, met coal made up approximately 75% of our core royalty revenues, and 55% of our coal royalty sales volumes.

關於 NRP 第四季的冶金動力煤特許權使用費結構，冶金煤約佔我們煤炭特許權使用費收入的 80% 和煤炭特許權使用費銷售量的 60%。預計 2024 年全年，冶金煤約占我們核心特許權使用費收入的 75%，佔煤炭特許權使用費銷售額的 55%。

Shifting to our Soda Ash business segment. Net income in the fourth quarter and full year of 2024 decreased $14 million and $55 million, respectively, as compared to the prior year periods. In addition, operating and free cash flow for the fourth quarter and full year of 2024 decreased $5 million, and $43 million, respectively, as compared to the prior year periods.

轉向我們的純鹼業務部門。2024 年第四季和全年淨收入與去年同期相比分別減少 1,400 萬美元和 5,500 萬美元。此外，與去年同期相比，2024 年第四季和全年的營業現金流和自由現金流分別減少了 500 萬美元和 4,300 萬美元。

These decreases were primarily due to lower sales prices, driven by an oversupplied soda ash market and weakened demand for construction flat glass. Soda ash pricing has declined significantly from the record highs seen in 2023 and until demand for flat glass rebounds and the market is able to absorb the additional supply from China, we expect prices to remain muted and our distributions received from Sisecam to reflect the business' performance.

下降的主要原因是純鹼市場供應過剩和建築平板玻璃需求減弱導致銷售價格下降。純鹼價格已從 2023 年的歷史高點大幅下跌，在平板玻璃需求反彈且市場能夠吸收來自中國的額外供應之前，我們預計價格將保持低位，我們從 Sisecam 收到的分銷將反映業務的表現。

Moving to our Corporate and Financing segment. In 2024, we redeemed all of our remaining preferred units and warrants, leaving us with only $142 million of debt obligations at year-end. We also extended and lengthened the runway on our credit facility in 2024, expanding it by almost 30% from $155 million to $200 million, and extending the maturity date over two years to October 2029.

轉向我們的企業和融資部門。2024 年，我們贖回了所有剩餘的優先股和認股權證，年末我們的債務僅剩下 1.42 億美元。我們也延長了 2024 年信貸額度的期限，將其從 1.55 億美元擴大近 30% 至 2 億美元，並將到期日延長兩年至 2029 年 10 月。

For the Corporate and Financing segment's Q4 financial results, net income improved by $2 million compared to the prior year period, primarily due to lower employee-related expenses. In Q4, operating cash flow and free cash flow each improved by $1 million as compared to the prior year period, primarily due to lower interest payments due to less debt outstanding.

就企業和融資部門第四季的財務表現而言，淨收入較去年同期增加了 200 萬美元，主要由於員工相關費用的降低。第四季度，經營現金流和自由現金流較去年同期分別增加了 100 萬美元，主要原因是未償還債務減少導致利息支付減少。

For full year 2024, net income remained relatively flat and operating cash flow and free cash flow each decreased $2 million as compared to the prior year period. The decrease in full year operating and free cash flow were primarily due to higher cash paid for interest as a result of credit facility borrowings that were used to permanently retire the preferred units and warrants.

2024 年全年淨收入保持相對平穩，營運現金流和自由現金流與去年同期相比分別減少 200 萬美元。全年營業現金流和自由現金流的減少主要是由於用於永久退出優先股和認股權證的信貸借款導致支付的利息現金增加。

Keep in mind that while the elimination of the preferred unit distribution does not impact our free cash flow metric, no longer having to pay a 12% distribution on $250 million of preferred units saves us $30 million of annual cash outflow.

請記住，雖然取消優先單位分配不會影響我們的自由現金流指標，但不再需要對 2.5 億美元的優先單位支付 12% 的分配，可以為我們節省每年 3000 萬美元的現金流出。

Lastly, regarding our quarterly distributions, in November 2024, we declared and paid a third quarter distribution of $0.75 per common unit, and earlier this month, we declared and paid a fourth quarter distribution of $0.75 per common unit.

最後，關於我們的季度分配，2024 年 11 月，我們宣布並支付了第三季每股普通股 0.75 美元的分配，本月初，我們宣布並支付了第四季度每股普通股 0.75 美元的分配。

Today, we announced a special distribution of $1.21 per common unit to cover the tax liability associated with owning NRP common units in 2024.

今天，我們宣布每股普通股 1.21 美元的特別分配，以承擔 2024 年持有 NRP 普通股所涉及的稅務責任。

And with that, I'll turn the call over to Kate, our operator, for questions.

說完這些，我將把電話轉給我們的接線生凱特 (Kate) 來回答問題。

(Operator Instructions)

（操作員指令）

I will now turn the call back to Craig Nunez for closing remarks.

現在我將請克雷格·努涅斯作最後發言。

Thank you very much, Kate, and thank you all for joining our call, and have a great day. Goodbye.

非常感謝你，凱特，也感謝大家參加我們的電話會議，祝大家有個愉快的一天。再見。

Ladies and gentlemen, that concludes today's call. Thank you, and have a great day.

女士們、先生們，今天的電話會議到此結束。謝謝您，祝您有愉快的一天。