Natural Resource Partners L.P. Q2 FY2026 earnings call

• Overall Financial Performance

  • NRP generated $42 million of free cash flow in Q2 2026, and $163 million of free cash flow over the trailing 12 months, excluding the $39 million invested in the Sodash business in Q1 2026
  • The company has fully paid off its bank revolver, with only $14 million of total debt outstanding as of the call
  • A Q2 2026 distribution of 75 cents per common unit was announced, to be paid later in the month, matching the Q1 2026 distribution level

• Coal Market Update

  • Both metallurgical and thermal coal markets have stabilized after prior declines, with modest improvement off recent lows; no near-term catalyst is expected to push prices sharply higher
  • The mineral rights segment has consistently generated stable cash flow across all coal market cycles, and remains the company's most dependable cash generator
  • High oil prices increase associated natural gas production, which puts downward pressure on North American thermal coal prices, while lower oil prices support thermal coal pricing; growing renewables competitiveness creates a long-term headwind for thermal coal demand

• Soda Ash Market Update

  • The global soda ash market remains oversupplied, with no quick fix for the current imbalance; international prices have found a floor, but this floor is below most producers' cost of production, so the downturn is expected to continue
  • Domestic soda ash prices currently hold an unusually large premium to international prices, because annual domestic contract pricing has not yet adjusted to the drop in international spot prices; this premium is expected to narrow as 2027 delivery contracts are negotiated in 2026, leading to lower domestic prices ahead
  • Approximately 4% of global soda ash capacity has been announced for extended closure, an early sign that market excess is beginning to correct, as supply and demand will eventually rebalance over time

1. Mineral Rights Segment: Generated $36 million of net income, and $45 million of operating and free cash flow in Q2 2026. Compared to Q2 2025, net income decreased by $3 million, and operating/free cash flow each decreased by $1 million. In Q2 2026, metallurgical coal accounted for approximately 70% of total coal royalty revenue and 45% of coal royalty sales volume. This segment contributed 144% of consolidated Q2 2026 net income and 107% of consolidated operating/free cash flow.
2. Soda Ash Segment: Q2 2026 net income decreased by $7 million year-over-year, and operating/free cash flow each decreased by $5 million year-over-year. No distribution was received from the Sister James, Wyoming operation in Q2 2026, compared to a $5 million distribution in Q2 2025. This segment had a net negative impact on consolidated results relative to the prior year period.
3. Corporate and Financing: Q2 2026 net income improved by $2 million year-over-year, and operating/free cash flow each improved by $1 million year-over-year, driven by lower interest costs from reduced outstanding debt. This segment offset net declines from the other two segments to deliver positive consolidated improvement.

• Barring unforeseen adverse events, management intends to raise the company's distribution significantly starting in November 2026
• Distributions from the Sister James, Wyoming soda ash operation are not expected to resume until soda ash demand rebounds or there is sufficient permanent supply reduction in the depressed market
• Management does not attempt to predict short-term commodity price movements, and expects the current soda ash downturn to continue for some time before market correction occurs

• Geopolitical conflict, global shipping disruptions, and ongoing tariff disputes create market uncertainty, with unknown resolution outcomes that could impact performance
• Thermal coal faces sustained long-term headwinds from the increasing competitiveness of renewable energy
• The global soda ash market is currently oversupplied, with prices at unprofitable levels for most producers; domestic soda ash prices are expected to decline as contract renewals close the gap with depressed international spot prices
• All forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from management's current expectations, as detailed in the company's SEC filings

There were no analyst or investor questions submitted during the Q&A portion of the call. After an open waiting period for questions, the call moved directly to closing remarks from management.