For the period ended September 30, the company reported revenues of $US82.2 million, versus $94.2 million during the same period last year.
Officials attributed the drop to a decrease in coal royalty revenues, which fell 26% from 2012 to $52.3 million due because of metallurgical and steam coal pricing.
NRP’s coal production volumes were up slightly year-on-year to 13.5 million tonne, and its average coal royalty revenue per ton fell 26% to $3.88 per tonne.
Company officials said that the rise was due primarily to higher production from its mines paired with lower prices, which were able to offset a decrease in central Appalachian production.
Met coal made up 32% of coal production as well as 42% of coal royalty revenues during the third period.
A big benefit for the MLP in the September quarter was its diversification into other asset classes.
Officials said in the report that revenues other than coal royalty revenues were up about 25% year-on-year. The increase, it said, was tied to revenues from its OCI Wyoming soda ash business and increases in aggregates and oil and gas revenues.
“These increases more than offset the slight decreases experienced in infrastructure revenues, which are primarily coal-related,” officials said.
Operating expenses and net income with both down during the period, the former due to lower general and administrative expenses and the latter from lower revenues and increased interest expense.
“Our diversification both within and outside of the coal business has helped temper the declines in both production and price of our central Appalachian coal," said president and chief operating officer Nick Carter said.
“In the third quarter NRP experienced increases in our Illinois Basin coal royalties and aggregates and oil and gas revenues in addition to the income stream from our…soda ash business, resulting in revenues and earnings in line with our updated guidance issued in August.”
Looking ahead, NRP officials acknowledge that the thermal coal market continued to be weak but said that, over the next quarter, it anticipated getting some clarity for next year and beyond while current contracts rolled over or off.
The company noted that the met coal market was seeing a gradual improvement from a recent low, and a recent benchmark price of $152 per metric tonne was $7/t over the prior quarter.
“The metallurgical coal recovery will not be a rapid one, but the global demand for steel continues to increase, and due to NRP's large exposure to metallurgical coal, particularly from central Appalachia, NRP will benefit as the market steadily improves,” Carter said.
“NRP continues to believe that the partnership's diversification efforts will help to dampen the impact of the weaker coal markets. NRP's 2013 guidance issued in August reflected the impact of the weaker coal markets and NRP still believes that its 2013 results will be within the previously issued ranges.”
