Natural Resource Partners LP (NRP) 2025 Q2 法說會逐字稿

Thank you for standing by. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Natural Resource Partners LP Second Quarter 2025 earnings conference call. (Operator Instructions). I would now like to turn the call over to Tiffany Sammis, Investor Relations. Please go ahead.

感謝您的支持。我叫凱瑟琳，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 2025 年第二季財報電話會議。（操作員指令）。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 second quarter 2025 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 2025 年第二季電話會議。今天的電話會議正在進行網路直播，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 和執行副總裁 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. These risks are discussed in NRP's Form 10-K and other Securities and Exchange Commission filings.

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。這些風險在 NRP 的 10-K 表格和其他證券交易委員會文件中進行了討論。

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 second quarter press release, which can be found on our website. 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.

我們不承擔因任何原因公開修改或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。我們第二季的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。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 $46 million of free cash flow in the second quarter of 2025 and $203 million of free cash flow over the last 12 months. This was achieved while the prices for our three key commodities metallurgical coal, thermal coal and soda ash traded at or near our estimates of operators' cost of production. With prices for coal and soda ash trading at cyclical lows and many operators struggling to remain profitable, we are quite pleased with the partnership's ability to generate robust levels of free cash flow.

謝謝你，蒂芙尼，大家早安。NRP 在 2025 年第二季產生了 4,600 萬美元的自由現金流，在過去 12 個月中產生了 2.03 億美元的自由現金流。這項成就是在我們三種主要商品冶金煤、動力煤和純鹼的交易價格達到或接近我們對營運商生產成本的估計的情況下實現的。由於煤炭和純鹼價格處於週期性低位，許多業者都在努力保持獲利，我們對合作夥伴能夠產生強勁的自由現金流的能力感到非常滿意。

The goal of our deleveraging strategy established 10 years ago was to achieve a cost and capital structure that would allow us to generate substantial cash flow and earn competitive rates of profit throughout commodity price cycles. We believe the partnership's performance is evidence of success in that regard.

我們十年前製定的去槓桿策略的目標是實現一種成本和資本結構，使我們能夠在整個商品價格週期中產生大量現金流並獲得有競爭力的利潤率。我們相信合作關係的表現證明了這一點的成功。

While previous commodity price declines posed risks to NRP solvency, this newfound financial strength has allowed us to continue making steady progress on our deleveraging strategy through this downturn. Based on our current free cash flow run rate, we are on track to pay off substantially all debt by the middle of next year and be in a position to substantially increase unitholder distributions starting next August.

雖然先前大宗商品價格下跌對 NRP 償付能力構成了風險，但新獲得的財務實力使我們能夠在經濟低迷時期繼續穩步推進去槓桿戰略。根據我們目前的自由現金流運行率，我們預計在明年年中之前償還幾乎所有債務，並能夠從明年 8 月開始大幅增加單位持有人的分配。

Metallurgical and thermal coal markets remain under pressure due to soft demand for steel, cheap natural gas, and relatively high coal inventories. We believe many operators are operating at razor-thin margins, selling coal at or near their cost of production, while some operators are likely underwater at these prices. We would not be surprised to see supply rationalization emerge across the industry in the coming quarters.

由於鋼鐵需求疲軟、天然氣價格低廉以及煤炭庫存相對較高，冶金煤和動力煤市場仍面臨壓力。我們認為，許多業者的利潤微薄，以生產成本或接近生產成本的價格出售煤炭，而一些業者可能在這樣的價格下陷入虧損。如果未來幾季整個產業出現供應合理化，我們不會感到驚訝。

NRP has been in the coal royalty business a long time, and we are veterans of commodity price cycles. The current environment has the classic hallmarks of a coal market downturn, excess supply, soft demand, and lack of identifiable catalysts to turn the market around. But there is one aspect of the current environment that is different from what we have observed in the past, namely, we believe many operators across the US are in better financial shape than in previous downturns.

NRP 長期從事煤炭特許權使用費業務，我們是商品價格週期的老手。當前環境具有煤炭市場低迷、供應過剩、需求疲軟以及缺乏扭轉市場趨勢的明顯催化劑的典型特徵。但當前環境有一個面向與我們過去觀察到的不同，即我們認為美國許多業者的財務狀況比以往的經濟低迷時期要好。

They tend to have more conservative capital structures, better cost structures, and limited near-term reclamation and pension liabilities. We believe this fact bodes well for the industry in general, which should have better financial flexibility to manage through this downturn.

它們往往擁有更保守的資本結構、更好的成本結構以及有限的短期回收和退休金負債。我們相信，這一事實對整個行業來說是個好兆頭，該行業應該擁有更好的財務靈活性來度過這次經濟衰退。

NRP is generating more free cash flow than in previous cyclical troughs. This is one beneficial impact for us from the post-COVID inflationary surge. As the marginal cost of production for coal has risen, the breakeven coal sales prices for operators have also increased. As a royalty owner, we benefit from higher sales prices without having to bear the risk and burden of our operators' higher cost of production.

NRP 產生的自由現金流比之前的周期性低谷時期要多。這是新冠疫情後通膨飆升給我們帶來的一個有利影響。隨著煤炭邊際生產成本的上升，業者的損益兩平煤炭銷售價格也隨之上漲。作為特許權使用費所有者，我們可以從更高的銷售價格中受益，而不必承擔營運商更高生產成本的風險和負擔。

The soda ash market also remains significantly oversupplied, which has driven sales prices below the cost of production for most producers. And in some regions, we believe prices are at or below even the variable cost of production. While we believe this price environment is unsustainable long term, we have not yet seen meaningful supply rationalizations necessary to rebalance the market.

純鹼市場仍然嚴重供過於求，導致大多數生產商的銷售價格低於生產成本。在某些地區，我們認為價格甚至等於或低於生產的變動成本。雖然我們認為這種價格環境長期來看是不可持續的，但我們尚未看到重新平衡市場所必需的有意義的供應合理化。

It is our view that it will likely take several years for demand to grow and/or supply to rationalize sufficiently for the market to reach a price equilibrium consistent with historical norms. We expect distributions from Sisecam Wyoming to remain at historically low levels, potentially zero, for the foreseeable future. We continue to hold an optimistic view of the long-term fundamentals of the soda ash market in general and about our investment in Sisecam Wyoming in particular, as it benefits from being one of the world's lowest-cost producers.

我們認為，需求成長和/或供應充分合理化以使市場達到與歷史規範一致的價格平衡可能需要幾年時間。我們預計，在可預見的未來，懷俄明州西塞卡姆的分佈將保持在歷史最低水平，甚至可能為零。我們繼續對整個純鹼市場的長期基本面持樂觀態度，特別是對我們對懷俄明州西斯凱姆的投資持樂觀態度，因為它是世界上成本最低的生產商之一。

We have no significant progress to report on our carbon-neutral initiatives over the last quarter. The general market for most C&I activities is stagnant as political, regulatory and market uncertainties pose significant hurdles for developers contemplating large capital investments for carbon-neutral projects.

上個季度，我們的碳中和措施並沒有取得重大進展。由於政治、監管和市場不確定性給考慮對碳中和項目進行大規模資本投資的開發商帶來了重大障礙，大多數商業和工業活動的整體市場處於停滯狀態。

To summarize, the collective market for our three key commodities is as negative as it's ever been. Despite this, the partnership continues to generate robust levels of free cash flow that are being used to pay down debt. Based on free cash flow run rates currently, we expect to pay off substantially all of our debt in the coming months and be in a position to significantly increase unitholder distributions starting next August.

總而言之，我們三種主要商品的整體市場狀況比以往任何時候都更糟。儘管如此，該合夥企業仍繼續產生強勁的自由現金流，用於償還債務。根據目前的自由現金流運行率，我們預計在未來幾個月內償還大部分債務，並能夠從明年 8 月開始大幅增加單位持有人的分配。

With that, I will turn it over to Chris.

說完這些，我將把麥克風交給克里斯。

Thank you, Craig. In the second quarter of 2025, NRP generated $34 million of net income and $46 million of both operating and free cash flow. Our mineral rights segment generated $40 million of net income and $46 million of operating and free cash flow. When compared to the prior-year second quarter, our mineral rights segment net income decreased $13 million, while operating and free cash flow each decreased $11 million. These decreases were primarily due to weaker coal markets, resulting in lower metallurgical and thermal coal sales prices.

謝謝你，克雷格。2025 年第二季度，NRP 創造了 3,400 萬美元的淨收入以及 4,600 萬美元的營運和自由現金流。我們的礦產權部門產生了 4000 萬美元的淨收入和 4,600 萬美元的營運和自由現金流。與去年同期第二季相比，我們的礦產權部門淨收入減少了 1,300 萬美元，而營運和自由現金流分別減少了 1,100 萬美元。這些下降主要是由於煤炭市場疲軟，導致冶金煤和動力煤銷售價格下降。

Regarding our second quarter 2025 met thermal coal royalty mix, metallurgical coal made up approximately 70% of our coal royalty revenues and 55% of our coal royalty sales volumes. Our soda ash segment generated $3 million of net income and $5 million of operating free cash flow during the second quarter of 2025.

關於我們 2025 年第二季的冶金動力煤特許權使用費組合，冶金煤約占我們煤炭特許權使用費收入的 70% 和煤炭特許權使用費銷售量的 55%。我們的純鹼部門在 2025 年第二季創造了 300 萬美元的淨收入和 500 萬美元的經營自由現金流。

Net income decreased by $1 million compared to the prior year second quarter, while operating and free cash flow each decreased by $3 million. These decreases were due to lower sales prices driven by weak glass demand from the construction and automobile markets and the influx of new natural soda ash supply from China. We expect prices and our distributions received from Sisecam to remain at these lower levels until demand rebounds or there is a significant supply response, most likely from higher cost synthetic production.

與去年同期相比，淨收入減少了 100 萬美元，而營業現金流和自由現金流分別減少了 300 萬美元。下降的原因是建築和汽車市場對玻璃的需求疲軟以及來自中國的新天然純鹼供應的湧入導致銷售價格下降。我們預計，價格和我們從 Sisecam 獲得的分配將保持在較低水平，直到需求反彈或出現顯著的供應反應，最有可能的是來自成本較高的合成生產。

Moving to our corporate and financing segment. Q2 2025 net income, operating cash flow and free cash flow all improved to $2 million as compared to the prior year period due to less debt outstanding, resulting in lower interest costs and less cash paid for interest.

轉到我們的企業和融資部門。由於未償還債務減少，導致利息成本降低和支付的利息現金減少，2025 年第二季的淨收入、營運現金流量和自由現金流量均比去年同期提高至 200 萬美元。

Regarding our quarterly distributions, in May of 2025, we paid the first quarter distribution of $0.75 per common unit. And today, we announced the second quarter 2025 distribution of $0.75 per common unit that will be paid later this month. And with that, I'll turn the call over to Kathleen, our operator, for questions.

關於我們的季度分配，2025 年 5 月，我們支付了第一季每股 0.75 美元的分配。今天，我們宣布 2025 年第二季每股普通股分配 0.75 美元，將於本月稍後支付。說完這些，我將把電話轉給我們的接線生凱瑟琳，回答她的提問。

(Operator Instructions) David Speer, Nitor Capital Management.

（操作員指示）Nitor Capital Management 的 David Speer。

Hi, how are you, guys? Good morning. Given all the weakness in the different areas, whether it be coal or soda ash, at the point at which you guys get to debt free, are there any realistic opportunities to pick up additional royalty assets or soda ash assets? I mean, just it seems like given the weakness you're seeing, that could be a possibility?

嗨，大家好嗎？早安.考慮到煤炭和純鹼等不同領域的弱點，當你們擺脫債務時，是否有任何現實的機會來獲得額外的特許權使用費資產或純鹼資產？我的意思是，考慮到您所看到的弱點，這可能是一種可能性？

The -- let's just talk about first the mineral rights market, the market for mineral rights around the country. It's a very fragmented market with many different owners that own many different types of mineral interest. It's not a very well-organized market. So transactions have to be done on a one-off type basis. So there's always possibilities to find those types of investments, but generally speaking, there's not very much trading activity that takes place in those. So it's not something that's very common.

我們先來談談礦產權市場，也就是全國的礦產權市場。這是一個非常分散的市場，有許多不同的所有者擁有不同類型的礦產權益。這不是一個組織良好的市場。因此交易必須以一次性的方式完成。因此，總是有可能找到這些類型的投資，但一般來說，這些領域的交易活動並不多。所以不是很常見的事情。

But is that something that was off the table given the priority of delevering and once that has been paid off, that you could possibly look at some acquisitions on an unlevered basis?

但是，考慮到去槓桿的優先事項，這是不可能的事情嗎？一旦還清債務，您是否有可能在無槓桿的基礎上考慮一些收購？

I'll tell you that once that we achieve what we think of as our version of a fortress balance sheet, our three priorities for cash are going to be: number one, unitholder distributions; number two, unit repurchases at material discounts to our estimates of intrinsic value; number three, opportunistic investments as you speak of, where we can acquire assets that fall within our circle of confidence, I guess, I'd say, at bargain prices.

我告訴你，一旦我們實現了我們所認為的堡壘資產負債表，我們對現金的三個優先事項將是：第一，單位持有人分配；第二，以低於我們估計的內在價值的重大折扣回購單位；第三，正如你所說的機會性投資，我們可以以便宜的價格收購符合我們信心範圍的資產。

Got it. All right. I appreciate that. And then outside of the carbon-neutral initiatives, is there any other -- are there any other opportunities across your land, whether it be rare earths or some other type of mineral or commodity that's not really there right now that might be a possibility in the future?

知道了。好的。我很感激。那麼，除了碳中和舉措之外，還有其他——你們的土地上還有其他機會嗎，無論是稀土還是其他類型的礦物或商品，這些現在還不存在，但將來可能會有潛力？

I believe the answer to that question is yes, but I do not know that the answer to that question is yes. We like to think that we own through our vast footprint, literally thousands, if not hundreds of thousands of coal options on greatness. Areas that may have value at some point in time in a different economic environment or in a different -- when a new mineral is found or a new deposit is found. But I cannot say right now that there is anything we're looking at specifically.

我相信這個問題的答案是肯定的，但我不知道這個問題的答案是否是肯定的。我們喜歡認為，透過我們廣泛的足跡，我們擁有數千個，甚至數十萬個偉大的煤炭選擇權。當發現新的礦物或新的礦藏時，這些區域可能在不同的經濟環境或不同的時間點具有價值。但我現在還不能說我們正在具體關注什麼。

Okay. I appreciate it, guys. Thank you so much.

好的。我很感激你們。太感謝了。

You bet.

當然。

[John Mason], Aegis Companies.

[約翰梅森]，Aegis 公司。

I asked a couple of quarters ago about when you guys are thinking about the next phase of capital returns. And I know you mentioned that the debt doesn't need to go to $0 necessarily, but you're going to focus on the highest cost debt. I think it's been like -- that was like in Q3 last year. So are you guys thinking basically like the OpCo credit facility, you want to get to $0? Or how are you guys thinking about it in terms of the timing?

幾個季度前我問你們何時考慮下一階段的資本回報。我知道您提到債務不一定需要降至 0 美元，但您將關注成本最高的債務。我認為就像——就像去年第三季的情況一樣。那麼，你們基本上是否像 OpCo 信貸安排一樣，想將價格降至 0 美元？或者你們對於時間安排有什麼看法？

Yes.

是的。

And that concludes our Q&A session. I will now turn the conference back over to Craig Nunez for closing remarks.

我們的問答環節到此結束。現在我將會議交還給 Craig Nunez 並請他致閉幕詞。

Thank you very much, and thank you all of you for participating in our call. We look forward to talking to you next week or next quarter, and we thank you for supporting NRP.

非常感謝，也感謝大家參加我們的電話會議。我們期待下週或下個季度與您交談，並感謝您對 NRP 的支持。

Ladies and gentlemen, that concludes today's call. Thank you, everyone, for joining. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。謝謝大家的參與。您現在可以斷開連線。