Natural Resource Partners L.P.
) reported first quarter 2013 earnings of 43 cents per unit, down
8.5% from the year-ago earnings.
Earnings, however, surpassed the Zacks Consensus Estimate by
4.9%. GAAP and pro forma earnings were identical owing to the
absence of one-time items.
Natural Resource Partners' revenue recorded a 3% upsurge
totaling $94.3 million driven by rise in revenues other than coal
royalty partially offset by a decline in coal royalty
The reported quarter revenue topped the Zacks Consensus
Estimate by 6.0%.
Natural Resource Partners Production Update
Coal production during the quarter rose sharply by 14% from
the year-ago quarter to 13.8 million tons. Metallurgical coal
contributed 27% to the overall production, lower than the
year-ago share of 30%.
Natural Resource Partners production in the Appalachian region
grew 5% year over year. This was further supported by expansion
in production across the Illinois, Northern River Powder and Gulf
Coal royalty revenue slipped 9% to $54.4 million from the
prior-year quarter. This happened due to lower realizations from
the Central Appalachian operations. Average coal royalty per ton
also declined 20% year over year.
Revenues other than coal royalty, surged 25% to $39.9 million
in the reported quarter.
Total operating costs and expenses of Natural Resource
Partners during the quarter totaled $31.8 million, up 17.6% from
the prior-year quarter. A 19% and 29.5% increase in depreciation,
depletion and amortization as well as general and administrative
expenses led to the cost upturn.
Interest expenses rose to $14.6 million from $13.6 million in
the year-ago quarter.
Cash from operating activities during the quarter was $43.9
million versus $49.5 million in the prior-year quarter.
In the first quarter, distributable cash flow was $44.5
million, down 10.1% from the year-ago period. This was due to
lower revenues from coal royalty.
Cash and cash equivalents as of Mar 31, 2013 were $76.2
million versus $149.4 million as of Dec 31, 2012. The substantial
decrease in Natural Resource Partners' cash balance from the
year-ago quarter was due to acquisitions, and principal and
Long-term debt as of Mar 31, 2013 was $1.1 billion versus $0.9
billion as of Dec 31, 2012.
With natural gas price on the rise, Natural Resource Partners
anticipates improvement in the U.S. steam coal market. The
partnership's leeses are ready to welcome any encouraging signs
in the market but are in no hurry to reopen mines and are waiting
a little before going for an increase in production level.
Other Coal Company Releases
Alpha Natural Resources
) reported a loss of 47 cents per share for the first quarter of
2013, narrower than the Zacks Consensus Estimate of a loss of 58
Walter Energy Inc.
) posted operating loss per share in the first quarter of 2013 of
64 cents, much narrower than the Zacks Consensus Estimate of a
loss of 88 cents.
Arch Coal Inc.
) reported first-quarter 2013 pro forma loss of 34 cents per
share, marginally wider than the Zacks Consensus Estimate of a
loss of 32 cents.
Natural Resource Partners delivered promising results in the
first quarter 2013 with both earnings and revenue beating our
expectations. The partnership's diversified asset basket lends
constancy to its revenue stream. The acquisition of stake in OCI
Wyoming is expected to provide significant upside given the
increasing demand for soda ash in Asia.
Moreover, Natural Resource Partners is expected to gain from
higher metallurgical coal demand on the back of thriving steel
markets in India, China and South America.
On the other hand, transportation cost pressure and expiration
of contract with a Clint Group affiliate would pose challenges to
Natural Resource Partners.
The partnership currently retains a Zacks Rank #3 (Hold).
Headquartered in Houston, Texas, Natural Resource Partners L.P.
engages in the business of owning and managing mineral reserve
properties. It primarily owns coal, oil and gas reserves across
the US, generating royalty income for the partnership.
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