Record NRP revenue despite deflated Q4

WHILE master limited partnership Natural Resource Partners sealed up 2011 with record revenues, it posted an unfortunate $US14 million net loss during the final quarter on the market slump and projected lower results for this year.
Record NRP revenue despite deflated Q4 Record NRP revenue despite deflated Q4 Record NRP revenue despite deflated Q4 Record NRP revenue despite deflated Q4 Record NRP revenue despite deflated Q4

A Natural Resource Partners property. Courtesy NRLP

Donna Schmidt

The Houston-based company’s recorded net loss to the limited partners for the quarter ended December 31 was versus an income of $41.7 million last year.

Officials cited an impairment of the Gatlin Ohio property for the loss – the operation in Meigs County, Ohio was idled earlier this year due to adverse geologic conditions.

Fourth-quarter revenues totaled $97.7 million, a 26% year-on-year jump.

NRP posted a record full-year revenue of $377.7 million, a 25% rise over 2010, with metallurgical production accounting for 34% of production and 45% of the company’s coal royalty revenues.

Broken down by region, metallurgical coal production increases were realized in Appalachia, where it saw a 5% jump and the Illinois Basin, where output rose 22%.

Met coal also sold for much higher prices in 2011 than it did in 2010, the company said.

“NRP had a record year in 2011 for both revenues and distributable cash flow as a number of our lessees outperformed our expectations and we benefitted from strong markets for metallurgical coal,” president and chief operating officer Nick Carter said.

“Our earnings, however, were impacted by the impairments that we were required to record on the two Gatling mines in northern Appalachia.

“In spite of this unfortunate situation, we are pleased with our Cline relationship and the success of the Illinois mines.”

With the market slump settling in with the close of the year, Carter said NRP anticipated continued near-term weakness due to the mild weather, low natural gas prices and lower global demand for the met product.

“It is times like these that prove the value of maintaining a large cash balance, as well as the strength of our lessees,” he said.

Looking ahead to the new fiscal year, NRP said it was anticipating slightly lower results for 2012 versus 2011.

Projected coal royalty revenues could be between $265 million and $295 million whole-year with the midpoint of the range approximately flat with 2011.

NRP said total revenues should range from $335 million to $380 million in 2012, with the midpoint of the range representing a drop of about 4% from last year.

In its outlook, it said coal production tonnage would be between 52 million tons and 58Mt.

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