Shares of Natural Resource Partners L.P. (NRP Quick QuoteNRP - Free Report) have increased 0.03% since reporting results for the third quarter of 2025. This compares with the S&P 500 index’s 1.2% decline over the same time frame. Over the past month, the stock has declined 2.3% against the S&P 500’s 1.3% growth, reflecting investor caution toward the partnership amid weaker commodity markets.

NRP reported net income of $30.9 million for the third quarter of 2025, down 20% from $38.6 million a year earlier. Total revenues and other income fell 17% to $49.9 million from $60.3 million in the prior-year quarter. Basic earnings per common unit declined to $2.31 from $2.55. The operating cash flow was $41.1 million compared with $54.1 million in the third quarter of 2024, and the free cash flow decreased 24% year over year to $41.8 million from $54.8 million.

Natural Resource Partners LP Price, Consensus and EPS Surprise

 

Natural Resource Partners LP price-consensus-eps-surprise-chart | Natural Resource Partners LP Quote

Segment Performance & Other Key Business Metrics

Mineral Rights Segment: Net income from the Mineral Rights segment rose to $40.9 million from $40.6 million a year ago. However, the operating and free cash flows decreased by $9.2 million and $9.1 million, respectively, due to lower metallurgical coal sales prices and volumes.

Coal royalty revenues dropped roughly 9% to $34.2 million, and combined average royalty revenue per ton declined to $4.51 from $5.24 in the prior-year period, largely because of soft global steel demand and low natural gas prices that suppressed the metallurgical and thermal coal markets. Roughly 70% of the company’s coal royalty revenues and 50% of sales volumes were derived from metallurgical coal.

Soda Ash Segment: Soda Ash net income fell sharply by $10.5 million year over year due to lower international sales prices. The operating and free cash flow each declined by $6.4 million as Natural Resource Partners received no distributions from its joint venture, Sisecam Wyoming LLC, in the third quarter. This compares with $7.8 million of distributions received in the first half of 2025.

Management noted that the global soda ash market remains oversupplied and that prices are at or below production costs for many operators, with weak demand from flat glass, automotive and solar panel sectors. NRP does not expect distributions from Sisecam to resume until high-cost producers exit the market or demand growth catches up with supply — a process that could take several years.

Corporate & Financing Segment: This segment reported a $2.6-million year-over-year increase in net income and $2.5-million growth in both operating and free cash flow, reflecting lower interest expenses due to debt reduction. Natural Resource Partners repaid $32 million in debt in the quarter and reported a leverage ratio of 0.4X at Sept. 30, 2025, down from 0.8X a year earlier. Available liquidity stood at $190.1 million, consisting of $31 million in cash and $159.1 million in available borrowing capacity.

Management Commentary

President and COO Craig Nunez emphasized that NRP continues to produce “substantial free cash flow despite ongoing depressed market conditions” for its three key commodities — coal, soda ash and carbon-neutral ventures.

During the earnings call, Nunez acknowledged that metallurgical coal markets are challenged by slowing global growth and soft steel demand, while thermal coal continues to struggle with low natural gas prices and renewable competition. He reiterated management’s view that North American thermal coal remains in long-term secular decline until proven otherwise.

On soda ash, Nunez described the current environment as a “generational bear market,” noting that global oversupply and weak demand have pushed prices to unsustainable levels. Nevertheless, he expressed confidence in Sisecam Wyoming’s ability to weather the downturn, calling it “one of the world’s lowest-cost producers” with a disciplined focus on cost management and system integrity.

Chief financial officer Christopher Zolas reinforced the company’s conservative capital management approach, highlighting Natural Resource Partners’ continued deleveraging progress. The partnership has retired nearly $130 million of debt over the past 12 months and expects to achieve its target of eliminating all outstanding debt next year.

Factors Influencing the Headline Numbers

Lower commodity prices across both coal and soda ash were the primary headwinds. Metallurgical coal prices weakened in line with declining global steel production, while thermal coal remained pressured by abundant inventories and cheap natural gas. The lack of distributions from Sisecam Wyoming materially reduced NRP’s earnings and cash flow contributions from the Soda Ash segment.

Additionally, the termination of a sub-surface carbon sequestration lease by Occidental Petroleum underscored challenges in the emerging carbon capture market, including high capital costs and regulatory uncertainty.

Operating expenses were stable year over year, with Natural Resource Partners maintaining a zero-based budgeting approach to control costs. The company continued to benefit from lower interest expenses due to reduced debt, which partially offset the decline in segment-level income.

Guidance & Outlook

While management refrained from issuing specific financial guidance, NRP anticipates continued weakness in coal and soda ash markets through 2026. Nunez stated that the partnership expects to remain free cash flow positive despite these headwinds and reaffirmed its intent to continue deleveraging.

He reiterated that the company’s long-term goal is to achieve a “fortress balance sheet,” defined as maintaining no permanent debt and at least $30 million in cash reserves. Once achieved, Natural Resource Partners intends to prioritize higher unitholder distributions and consider opportunistic unit repurchases if units trade at a discount to intrinsic value.

Other Developments

In the quarter, NRP maintained its quarterly cash distribution of 75 cents per common unit, payable Nov. 25, 2025. The company also noted the cessation of Occidental Petroleum’s carbon sequestration lease on its acreage in Polk County, TX, following a similar lease termination by Exxon in Alabama last year. Although none of Natural Resource Partners’ 3.5 million acres of CO2 sequestration pore space is currently leased, management views these assets as long-term “out-of-the-money call options,” with potential upside if the carbon capture industry matures.

Additionally, NRP continues to lease acreage for lithium production in the Smackover formation across southern Arkansas and northeast Texas, signaling diversification beyond its legacy coal and soda ash businesses.