Natural Resource Partners Reports 24% Revenue Decline in Q2 2025

Natural Resource Partners L.P. (NRP) reported a decline in financial performance for the second quarter of 2025, with total revenues and other income amounting to $50.1 million, down 24% from $65.5 million in the same period last year. The decrease was primarily driven by lower royalty revenues from coal and reduced contributions from its soda ash segment. For the six months ended June 30, 2025, total revenues were $110.6 million, a 22% decrease compared to $142.0 million in the prior year. The partnership's net income for the second quarter was $34.2 million, down from $46.1 million in the previous year, while net income for the first half of 2025 was $74.5 million, compared to $102.3 million in 2024.

The decline in revenue was attributed to lower metallurgical coal sales prices and volumes, which significantly impacted the Mineral Rights segment, where revenues fell by 22% to $103.5 million for the first half of 2025. The soda ash segment also experienced a 22% decrease in revenues, totaling $7.1 million, primarily due to lower sales prices. The partnership's operating cash flow decreased to $80.0 million for the first half of 2025, down from $128.1 million in the same period last year, reflecting the challenges faced in both segments.

In terms of operational metrics, NRP's coal sales volumes for the first half of 2025 were relatively stable at 14.3 million tons, with a slight increase in the Illinois Basin but declines in other regions. The average coal royalty revenue per ton decreased by 22% to $4.70, reflecting the overall market conditions. The partnership continues to explore opportunities in carbon neutral revenue, although the timing and likelihood of additional cash flows from these initiatives remain uncertain.

Strategically, NRP has made significant changes to its capital structure, including a reduction in long-term debt from $127.9 million at the end of 2024 to $87.1 million as of June 30, 2025. The partnership's leverage ratio improved to 0.5x, indicating a stronger balance sheet. NRP also declared a cash distribution of $0.75 per common unit in February 2025 and a special distribution of $1.21 per common unit in March 2025, reflecting its commitment to returning value to unitholders despite the challenging market conditions.

Looking ahead, NRP anticipates continued pressure on coal prices due to stagnant global steel demand and regulatory uncertainties. The partnership expects to maintain its focus on optimizing its mineral rights portfolio and exploring new revenue streams, particularly in carbon neutral initiatives. Future distributions will be evaluated quarterly by the Board of Directors, taking into account profitability, cash flow, and market conditions.