PVR Partners L.P. continues to share more benefits with its unitholders through consistently increasing the quarterly cash distribution rate. The partnership announced a new quarterly cash distribution rate of 55 cents per unit on all of its outstanding limited partner units.
This marks a rise of 1.9% from 54 cents per unit paid in Nov 2012 and 7.8% from 51 cents per unit paid in Feb 2012. The distribution will be paid on Feb14, 2013, to unitholders of record as of Feb 8, 2013.
The partnership has a long history of increasing distributions. With the latest distribution, PVR Partners has hiked the quarterly distribution to limited partners consecutively in each of the past eight quarters.
PVR Partners’ cash distribution depends primarily on cash flow that includes cash flow from financial reserves and working capital borrowings. The cash distribution does not solely depend on profitability, which can be affected by non-cash items. Hence, the partnership can sustain cash distribution even when it is incurring losses.
However, softness in the coal market continues to impact the prospects of the partnership. The partnership generates a substantial amount of revenue through coal royalties, which have declined significantly as its lessees have curtailed production owing to lower demand and fall in coal prices. PVR Partners L.P. currently retains a Zacks #4 Rank (Sell).
Besides PVR Partners, some other partnerships having exposure to natural gas pipelines have also raised their quarterly cash distribution rates. Sunoco Logistics Partners L.P. (SXL - Analyst Report) , Plains All American Pipeline LP (PAA - Analyst Report) and ONEOK Partners L.P. (OKE - Analyst Report) have raised their fourth quarter distribution by 5%, 3.7% and 3.6% sequentially to 54.50 cents, 56.25 cents and 71 cents, respectively.
Radnor, Pennsylvania-based PVR Partners manages coal and natural resource properties as well as natural gas gathering and processing businesses.