NRP - Earnings call transcript Q3 2020 | Natural Resource Partners L.P.

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Operator

[00:00:02] Thank you for standing by and welcome to the Natural Resource Partners LP third quarter twenty twenty earnings call. At this time, all participants are really listen only mode. After the speakers presentation, there will be a question and answer session to ask a question.

During the session, you will need to press star one on your telephone.

If you require any further assistance, please. zero. Star Press like Sammis, now the over conference I of to Investor Tiffany Manager Relations. to would hand Please go ahead.

Tiffany Sammis

[XX:XX:XX] Thank call. Partners be third being you. Natural and available quarter the Good webcast twenty morning on and our twenty replay conference a Today's website. is welcome call will to Resource

Operating Kevin me Vice Craig, Joining Chief President are Chief Zolas of Nunez, Craig Chris today Executive Financial and Coal. President Officer, Officer, and

events. looking different statements Exchange in our These Antakya's Commission for today comments any include looking forward publicly to Form views and may undertake uncertainties are about We update and could results Securities future involve Some obligation reason. no our of other our These that matters statements. statements forward filings. and revise risks from risks actual looking XXK forward discussed reflecting or and any cause to our materially

intend include Our which website. to comparable like specific remind most Strache segment. and directly reconciliations discuss comments measures, digital third that to I public three addition, today not press commentary market and any are our also additional on details our the be in found quarter Measures non-cash to or gap. our do would financial included we can for our operations or fundamentals, and disclosures resources, questions particular policy regarding everyone with outlook detailed business release,

call Craig our Newmark, Chief the Officer. to to over I turn like Now, would president and Operating

Craig Nunez

partnership remote in protocols. is the and usual. All government operate good our Tiffany, are rules CDC [XX:XX:XX] morning. employees as business safe [XX:XX:XX] imposed work continues you, company party guidelines, Thank conducting under Our and and to

soda them? we and glass electricity rebound and the began for for and authorities Our ash quarter, are management of steel, businesses and has succession in Demand outlook improved. coal third place. in our to Should the plans need delegations

However, ongoing expect volatile of as result uncertainties. to a markets remain we

XX flexibility off significant provides covid-XX to maintain pandemic, to generate flow continue paid which cash with cash debt. flow forty these liquidity, free down XX challenging last of managing dollars debt the million the dollars six us and continue We strong of financial through and million generated With and over months paying we free times.

Our markets we million cash two hundred liquidity employee, our dollars unused placement debt, and was will and remaining of of forward. borrowing one consisting private dollars preferred hundred their and have distributions paying quarter after the our million free going shown lows, second flow and hundred coal one cash from is million which two of flow amortization the dollars. one ended point of and capacity. million lessees common with quarter of cushion, benefit sixteen on and sixteen dollars improvement units We and our our thermal cash this Metallurgical expect five

of help emerge quarter manages to of which flow also cash which them outlook to is percent with investment last those segment, bankruptcy, lease our us we mentioned, soda and benefits our coal million year. costs. into began focus in coal entered foresight our from than forsight, compounded a the greater as revenues, represents amendments payments fixed XX had for for level line been payments provide The worked certainty conditions for to plan year we coal nine at the it to the on covid-XX and and make NRP cash to As by third million dollars quarter. flow we Bottom The continue fixed continues develop amendments this industry [XX:XX:XX] agreed to pandemic. generate anticipated free difficult see a pursuant over improving. ash We next totaling to forty through thermal forty two to the market

these management percent and and large finding demand rebounding compared in from continue demonstrated flow to additional covid-XX of testament demand. the paying expenses, credit The taken and is June in has up visibility Craig. covenant steps seven expenditures, share volumes until Despite our size our they confidence aggressive over operating liquidity. sales capital turn including management I or structure to the reducing continuing right quarter. twenty delaying revolving third Jenners Wyoming pandemic, business these Chris. with quarter in Stotish that, the ash to were navigate actions you, negotiating a solidify details to recent supported generating second Wyoming's the would Thank positive distributions stakeholders downturn I'd like GINNER capital expect debt to us down appreciation The global its is like to Soda cover to on new have in strengthen headroom developments, customers. partnership's facility greater not cash during our transformative we Chris ability cash And the and and who the all resume do sustainability to to call improvement efforts. express the taken my to financial the general years. free

Chris Zolas

morning, good everyone. And [XX:XX:XX]

During continuing coal of income quarter, four Similar continued the and generated Are the of and XX year metallurgical results covid-XX volumes as quarter, to twenty. net were and a of market metallurgical weakened sold primarily income royalty prior operating twenty generated sales operating cash in third as lower the quarter to impact economies. segment's disruptive coal quarter to Twenty twenty from twenty operations. prices global seven from prior for net compared and due on other in coal Both million were and lower quarter, its third quarter. the pandemic third the compared the to million U.S. this million year last cash of flow we nine twenty generated million flow segment

metallurgical approximately our a of percent up the total sales during approximately terms coal and sales of coal revenue of coal our In royalty royalty twenty. volumes coal XX third percent of Twenty made quarter mix, royalty XX

revenues the distributions And in to year were are year by lower the Twenty suspension lower compared by quarter Domestic secular Jenner, challenged third income the utility continued market Twenty and weaker lower the covid-XX to the to and as the soda quarter compared ash, pricing export in the properties. remain demand lower and quarter domestic other coal as coal low resulted thermal third million markets our previous prices, shift compared soda demand, so second in gas by the coal soda our In weakened export energy and distribution quarter pandemic. thermal renewable from segment, markets revenue that's XX to was pandemic. due twenty to of quarter twenty with to due six of segment thermal addition, of business lower and driven Wyoming. covid-XX previous million prior Moving to by [XX:XX:XX] our natural primarily due by the

As distributions effectively, mentioned we as been last during major economies to discussed covid-XX to turbulent flexibility market Wyoming General and on to conditions. suspend to this operate timing quarter, call in order blow of financial Craig generally a greater the our times has delay industry capital pandemic continues the while expenditures these and provide decided soda earnings and and the to better global earlier, navigate weekend

encouraged distribution confident respect in Our quarter Enemy's cash during of operate Twenty primarily company ultimate one we to power to distribution have seven third business, earnings While we're twenty we the and down a flow the improved prior quarterly August, quarterly a remain million [XX:XX:XX] to as distributions we twenty. business in General point interest quarter of that of lower so and Sodus due our XX to expense Regarding or quarter, million pandemic, the with our costs the cents we on preferred unable to debt. and holders effectively Twenty to ability predict remain covid-XX pay second and cash [XX:XX:XX] to business. five continue by may long compared unit corporate in that's by the a financing his paid term per impact segment

distribution. addition, morning, quarter In Twenty cash twenty a declared third this we

seven preferred holders, point unit Forty half one million cash in investors. half required five bond as five per cents by to distribution common our one our unit and and in kind, a

remain cash [XX:XX:XX] industry business a in to environment. over and this things I'll those protecting liquidity priority to in uncertain for focused control can call on And back continue operator the questions. on global and the we our turn with clear We

Operator

on please one if a you, to Thank handset. star [XX:XX:XX] like question, you ask would telephone your press

from Levin, the benchmark company. Please question ahead. go Mark comes first Our

open. Your is line

Mark Levin

to Craig. Craig very [XX:XX:XX] congratulations some through And My to Thanks Great. continuing pretty, on navigate pretty much. is tough question markets.

I the remember can't the been quarter. remember I the for potential cushion It to So about flow might have talked last before cash you turn negative. free quarter

basis. dollars a on and I month XX was trailing think half it a million one

success, of how Just curious the And ball on, cushion. as you the thoughts markets that you crystal to kind at if about, about free know, look in going cash know you know, your you you flow over, think of what's have and course. any

Craig Nunez

morning, did get Good that in you. cash for to talk I that turn make the Good flow that there. to free questions. to think good still It's [XX:XX:XX] call. cushion to previous Mark. comment is prospect Yes, negative I still your

by would not flow got to flow dollars make to think relation continue numbers for could minimize obligations and liquidity think a about quarter at it So it we I that to instance, time. payments negative as to liquidity currently basis, fact on have. still, the that cash that that always the flow of to But we years XX for on to the many think a to in our I compare five I cushion, cushion of quarters. all liquidity doesn't the We our that pull [XX:XX:XX] risk although of just second flow million you the think the flow clearly, here, and in cash I think out through number think you XX million think the a particular catch that have that's our know, cash turn if free million don't. have. let's reason back for any cushion ball cash. the that and roll have. there's seeing month here those think succeeding we cash period the XX on give have debt trying to any the our in things two say our My that turns way again know, we me that quarters negative. negative and significant quarter, we likely The I And negative of we're dollars, we to that, we and I'm an about dollars weak considerable about flow cushion fairly positive and cash on certainly negative turns We've you I have, rebounds, certainly is very that let's most hundred cash in that cushion we basis, our million and third it's in annual know, believe turn cushion we cash crystal of to the of worth and a dollars, as how look sixteen

Mark Levin

I helpful next [XX:XX:XX] Ok, to into Kind that's question, that. speak but asked can give I respect don't the and that's now you generally. fact of which my in that want specific, maybe before, know certainly you anything I've very kind dovetails of

have of position know accelerating you know, if do is of pay you a that access and you environment not the kind do you counterbalance how versus, know, for you in? balance sixty How in fact You guess you makes have much think referenced I lot the of liquidity, two you're you do do know, a You do is coal have now the liquidity limited, I markets? think How down. just million companies sense an lot of liquidity right NRP right two? you how dollars debt, the of there to most that any, it And you obviously, liquidity. appropriate debt, capital

Craig Nunez

two I'd that [XX:XX:XX] Well, there's like answering points emphasize I question. think in to

it's a I think great question.

still The exactly in right with is light going forward to covid know play liquidity, I we the see what uncertainties for point how know don't it's number is don't the out. of going first but

Second second wave here. Europe, wave in

that our on is won't going look in want XXX how about the the now? now like but XX the the the on be right to parent fact really our we the XX are how range feel bonds. right. the we course, are to beneficial at know, with those by inroads the of things that or feel be somewhere that at were You acquire future you manage difficult we play I those are pretty give there would with with can't good couple out of our where just at to those about in those large [XX:XX:XX] out respect I liquidity issue those Secondly, where with investors we we and don't we're what majority Almost co threshold So to keen percent And but of [XX:XX:XX] to want are there's have situation feels pretty cap bonds bonds, are we're don't there's acquiring it and of buy in it's vast a those I are to sophisticated are back we it should It We owned to where how we If it. those that with of feel the mature bonds that But would panicking for comfortable, good XXXX. sellers. be Feels and bonds through have institutional to it's real be as some a where Americans, down there going be result a million with word below of the should structure we us appropriate. paying in the market a associated debt always use not months, to to owning those I handful literally option to technical a the years. a early, prices we feel bonds, capital bonds, comfortable. of to threshold, feels but it we fall and of now owners, percentage, if remember track plus. bonds. feel somewhat owners make

Mark Levin

kind [XX:XX:XX] it, sitting sure don't I have of the call and again, you sort It and I to question of I you makes guys make and, be guidance, know, But, we're know, know frame know, but here total know, I you want correctly. my of, give to you beginning sense you November.

looks obviously has been So of have seemingly the and like up the prices down first month back that pandemic. come lows from production the

get production or it from from you're year, reserve you what from you on look You were of the you of you does know, your pace get feel holders? you does land, likely the color of the it any months out same, like think to on stay know, over, provide your last your three kind perspective, the any kind know, reserves better, it's about production as as on can of your seeing a

Craig Nunez

some, comment and he of defer will to [XX:XX:XX] I'll who head make our the to if general wants then Craig, division to I'll I'll a Kevin our is add to I coal and pricing Medan is looking our outlook that's is generally for and on than thermal than for that say our year production better is now. and assets, next our coal that's it

improvement. add And to so I'll we you Kevin, like are do you expecting that? some to general would

Kevin Craig

third the the one, But Mark. [XX:XX:XX] good been seen quarter third There Thanks, some it agree would second in lows here of and to of during more off the twenty, with And there the has some into like. a up, off you generally, that will it's improvement. you even we've quarter. guys. believe the for mean, morning, economic going which as then overall better certainly would, be lows, tougher and depths. a the we the generally, market they'll in on the the what But thermal see issues, know, of higher price natural natural second quarter prices than go pandemic, those quarter in gas after is be the I be would lows that. Twenty bias Twenty Certainly twenty of volatility positive volatility I we the quarter if and second little move. look

Mark Levin

perspective, seeing? trying similar from royalty much of change guidance, a what we've third perspective, quarter or a anticipate, again, we in sort [XX:XX:XX] least too of So from should to without been quarter at lot just fourth to versus a but give production

Kevin Craig

quarter the not predict to to would So significant quarter. a change third, I quarter compared fourth [XX:XX:XX]

Mark Levin

Ok. [XX:XX:XX]

Craig Nunez

us [XX:XX:XX] that hits we lock pay produce mind, contract they Mark, you're as a they before there's time sell know it, keep a sell lessees produce aware, start it, to lag They see then they volumes. I then royalty. and for They movement in. it, in our or They first. it

bit a always there's time. So a lag of

Mark Levin

or that and surety that you that makes suppose, could makes underwriting. may you not issue, what your or mean, from to I And is that more with providers. feel how are they're has of to sort kind bond curious risk do know, they it that may you particular know, lessees and from issue. more just do I'm cash they're you assessed your vulnerability? they a the relates from do that industry collateral third question issue you ultimately assess I you guys there's as Final increasing seem party customers? be you mean, how Yeah, Do just looking of it [XX:XX:XX] for like those you for know, to their of broader relevance, sense. know, which

Craig Nunez

me Let here. Yeah. off start [XX:XX:XX]

saw materializes, you our we that with they'd have not those [XX:XX:XX] liabilities during handle financial year, have that have reclamation they We've third XX, that most me with had condition and and my not type timeframe. our not parties. the of obtain last in and lessees, we relevant to was concerns there issue whether went addressing were able us, to and wants add that most difficulty financial numerous Let they back that in were this he that the XX sell in from we opinion, over the same Kevin and the It we that here, start add bankrupt, surety would seen in to thing. they to became not XXXX type can with that able as whether XX off really bonds to know, were had this be that issues timeframe. there of were And point in had losses of and the like number lessees in we to bonds be at

issue in we where something past. it's actively been that that don't works I that, liabilities, pollution, say of to also jurisprudence. it us see at States, confident we as in of awake don't you as United now, the night. in law just first all are in in way historical all, types keeps potential the which I We're And it So in significant our cetera, is operations very the legal we those reclamation in the operate, et the the not the also not is us involved has an the of liability in a for lessor jurisdictions that of know, of think that the would line lessees. coming the

So it's issue. important not trying an say to a it's

credit cetera. the factors to into It's to we et don't risks issue we around while certain. make our We bond, But out and comply have high now, with the our add on enter business want to now. we that right operators we say one to don't it right are a on I that? of [XX:XX:XX] they very when want Companies you list there, worthiness. went pressing to sensitive it's the to Kevin, with consider to of sure permits the to ability to them, with see

Kevin Craig

follow think [XX:XX:XX] And covered as Though? Craig, I question. let's up a you it. Mark,

it think covered well. very you I

Mark Levin

And last me. [XX:XX:XX] for question

what will there if the on an regulations you House. again,. thinking thermal a curious White over next know, be change you? is know, you you a But could from far I in specific from like few guess the know You the I'm watching change as for that company be the your you obviously, But a and from in as the you'd owner, know, there House just types see situation, what affect have might You NRP, a mean, directly change can know, reserve and know, debate U.S. exists energy wait just how perspective happens the and White from for? is anything potential as of as we'll occur. impact cool a I'm to I we what days. on, coal just

Craig Nunez

their of I'll the of of, [XX:XX:XX] in first directly not direct to The is here at our are of something cetera. let the branch emitters in way others you concern mining of operations. pollution, take et emitter not are and types know, in add our of executive Washington [XX:XX:XX] high stab is for me, to and this We of business. any a a change level to in lessees COX, that significant

the know, know, could indirectly, us consumed if as coal So you factor a decline. that we there you secular regulation. is impact know, in Also, be to more long there's thermal the term stringent is,

is business is smaller And so the continues impact as just truly But States. primarily of just gas smaller it I in is impact its side, the reasons, its coal, including And we will believe that part types prices. are economic not built the by getting thermal which is power reasons, that it's are new the regulatory our that decline, plants our for fired fact to United thermal of coal is and the that day. there business all natural on on the being

brown. demand pull demands tied demand in are believe are ash steel that driven not we by principally believe metal are they're for On for which and steel it. green the put global automobile glass ash, on which and of is for the soda by those I by GDP that industries, metallurgical that side, the associated they're which demands to global on putting soda or uses many make our and Many the which glass, again driven demand construction green, I were ash influenced soda products, and to for And are mechanisms of heavily that type and uses GDP. demand packaging type are

that So or I but a in see administration based opinion, on just that that's tough. also, don't really significant And that know, about I how I in our to business, us direct trace even saw coal we was to it was change I administration judging when impact our much on through the it's the Congress the change impact there regulatory if improving you don't that four the don't place on see that positive the ago tried in cetera. way. just et flipped, not a a years was the And in the burden talk was business, took and we whole

Mark Levin

get very one by that's that going Yeah, marked I, I've here phone had to helpful. it that's more. about. that's the off just And thing I [XX:XX:XX] because one I'm Hmm. appreciate Interesting.

Craig Nunez

for as coal, our due sequester we're actually time. away very this off the to five, [XX:XX:XX] that business But coal road. looking we've four the future they're that their green, and that becoming sounds actually we here that big soda COX. transforming we're pretty are Yeah, a owner asset do to NRP the millions Not be to number three, downturn into. a use our distant pursuing we're our at of down about moment thermal talk that And initiatives we will and to thermal but with talk And forward something topic A know, are sure. are ash the of that much they're but of that XX, tremendous, and and I have pore strange yet that to XX pursuing space hoping at and these goes as coal green point. we these all too future. hope that base, not at sure. is things little of look it become to are XX, activities And combined coal very acres be secular such we like, we know our we been in production about subsurface unrelated a you tens but the prepared or the have to business, company dreams, to to and years do some

Mark Levin

organic combination. through or through how? means I is that mean, acquisition or And [XX:XX:XX]

Craig Nunez

at we're not able you a or structure, to we not know, in that projects. large we're [XX:XX:XX] intensive a point our in such this capital in capital Well, acquisitions be time that have mode would as

yes, and we've own So, we some mean, it what the great got really country. around be assets, would subsurface organic. some I

there's anything to though, timeline that put think I we're any something any it's can a that And so just to on. there. potential of or we it you, tell working Can't it, to numbers lot it.

Mark Levin

[XX:XX:XX] raising in to portfolio about is that way potential you that right any, you're in see of know, Interesting anything the that actually now the that ask right you the I interesting. base anything know, or and you if asset size scale is was should is sales, comfortable that if for looks there's asset we any that, is there's cash any that that if with now? know, pretty or you know, anticipate, regard you some the going

Craig Nunez

always is there to it will the that is entertain if feel we have We But in worth at willing to someone else feel than has moment, else us. NASA more we is discussions that to be [XX:XX:XX] any we don't that that a someone situation.

Mark Levin

Not helpful. Thank [XX:XX:XX] all for Fair the enough. appreciated. all you the this very morning. time Much

Craig Nunez

Thank [XX:XX:XX] you. You bet.

Operator

[XX:XX:XX] to ask handset. telephone this turn please, a your one closing And I remarks. Nuñez you again, on would call if star at Craig point, press like for to question, will And the back

Craig Nunez

of everyone. you soon. Stay [XX:XX:XX] support we your joining appreciate call. safe to very you and the all continued Thank again much and Appreciate partnership. of thank talking for healthy, the We you to it. And look forward

will Bye. great day. have a We

Operator

our much you Thank you very joining disconnect. This may call today. for [XX:XX:XX] now us concludes and

Natural Resource Partners (NRP) 5 Nov 202020 Q3 Earnings call transcript