NRP sees growth despite rocky market

LARGE American coal leaseholder Natural Resources Partners has noted the tougher coal markets in making its 2009 guidance, yet still forecasts total revenues to jump 11% from last year’s guidance to $US294-338 million.
NRP sees growth despite rocky market NRP sees growth despite rocky market NRP sees growth despite rocky market NRP sees growth despite rocky market NRP sees growth despite rocky market

Courtesy Natural Resource Partners.

Blair Price

NRP expects 2009 net income to range between $US170 million and $US202 million with net income for its unit holders to be around $US1.67-2.12 per unit.

The company also declared a fourth-quarter 2008 distribution of US53.5c per unit, a one cent increase from last time, with the payment to be made on February 13 to unit holders on the record as of February 5.

In the 2009 guidance NRP expects to rein in some $US207-244 million of distributable cash flow, up 12% from the mid-range of its most recent 2008 guidance.

As a master limited partnership company, NRP will reserve some $US24.7 million for principal repayments on its long-term debt, up from $US17.2 million reserved last year.

When preparing its 2009 guidance, NRP said it took into account mine closures and production cutbacks already announced by some of its lessees along with more normal production fluctuations.

However, NRP made the point that 90% of thermal coal is committed and priced at significantly above 2008 levels and 60% of metallurgical coal is priced from mines operating on its properties, with met coal representing 24% of the 2009 production on its leases.

NRP factored in the acquisition of Gatling Ohio in this year’s second quarter in making its guidance.

NRP president and chief operating officer Nick Carter noted the changes triggered by the ongoing financial crisis.

“These are uncertain times in the coal markets and the economy. In light of this uncertainty we have diligently worked with our 68 lessees in arriving at what we believe are realistic ranges in the guidance for 2009,” he said.

NRP makes the bulk of its revenue from coal royalties and has substantial coal property holdings and supporting infrastructure of various mines, in Appalachia, the Illinois Basin and the Powder River Basin.

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