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Saturday November 25th, 2017 6:16AM

Ciner Resources LP Announces Third Quarter 2017 Financial Results

By The Associated Press

ATLANTA--(BUSINESS WIRE)--Nov 6, 2017--Ciner Resources LP (NYSE: CINR) today reported its financial and operating results for the third quarter ended September 30, 2017.

Third Quarter 2017 Financial Highlights:

Kirk Milling, CEO, commented: “Our 3rd quarter production performance illustrated that we are beginning to make progress with our efforts to improve both the utilization and reliability at our Wyoming facility. While our production and sales volumes remained below 2016 levels, our sequential production was up 5.6% and we believe we will see another modest increase in the 4th quarter. On the pricing front, we have raised our outlook for both international and domestic pricing as the soda ash market remains tight with pricing in Asia particularly strong.”

“While we have begun to see some of the initial benefits of our various production enabling projects, we expect most of the impact from these efforts to be realized in 2018. We are optimistic these improvements will have a positive impact on production stability and therefore our distributable cash flow.”

2017 Outlook:

Our 2017 full year outlook provided below has changed from our previous provided guidance as follows:

Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016

The following table sets forth a summary of net sales, sales volumes and average sales price, and the percentage change between the periods.

Consolidated Results

Net sales. Net sales increased by 1.2% to $122.5 million for the three months ended September 30, 2017 from $121.0 million for the three months ended September 30, 2016, driven by an increase in total average sales price of 4.2%, partially offset by a decrease in soda ash volumes sold of 2.9%. The increased international average sales price reflects the increase in freight costs driven by higher non-ANSAC export sales volume, primarily CIDT. The decrease in sales volumes are primarily due to lower production output compared to the prior period.

Cost of products sold. Cost of products sold, including depreciation, depletion and amortization expense, increased by 4.7% to $95.0 million for the three months ended September 30, 2017 from $90.7 million for the three months ended September 30, 2016, primarily due to an increase in freight costs of 19.0% to $35.1 million for three months ended September 30, 2017, compared to $29.5 million for the three months ended September 30, 2016. The increase in freight costs was driven by higher non-ANSAC export sales volumes, primarily CIDT. The higher incremental freight costs on non-ANSAC export sales is also reflected in the higher average international sales price. In the three months ended September 30, 2016, international sales primarily consisted of transactions to ANSAC. During the three months ended September 30, 2017 we also had higher maintenance expense that was partially offset by lower employee benefit costs, primarily resulting from changes to postretirement benefits.

Selling, general and administrative expenses. Our selling, general and administrative expenses decreased 9.5% to $5.7 million for the three months ended September 30, 2017, compared to $6.3 million for the three months ended September 30, 2016. The reduction was primarily driven by a higher proportion of employee time spent on Ciner Corp related activities in 2017, partially offset by higher professional services fees. In addition, we experienced lower selling and administrative fees relating to our affiliate, ANSAC.

Asset impairment charges. During the three months ended September 30, 2017, we incurred a $1.6 million asset impairment charge relating to certain assets, which became obsolete as a result of energy sourcing initiatives at our Wyoming facility.

Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016

The following table sets forth a summary of net sales, sales volumes and average sales price, and the percentage change between the periods.

Consolidated Results

Net sales. Net sales increased by 4.7% to $368.8 million for the nine months ended September 30, 2017 from $352.1 million for the nine months ended September 30, 2016, driven by increase in total average sales price of 6.6%, partially offset by a decrease in soda ash volumes sold of 1.7%. The increased international average sales price reflects the increase in freight costs driven by higher non-ANSAC export sales volume, primarily CIDT. The decrease in sales volumes are primarily due to lower production output compared to the prior period.

Cost of products sold. Cost of products sold, including depreciation, depletion and amortization expense, increased by 8.8% to $288.6 million for the nine months ended September 30, 2017 from $265.3 million for the nine months ended September 30, 2016, primarily due to an increase in freight costs of 27.9% to $111.0 million for the nine months ended September 30, 2017, compared to $86.8 million for the nine months ended September 30, 2016. The increase in freight costs was driven by higher non-ANSAC export sales volumes, primarily CIDT. The higher incremental freight costs on non-ANSAC export sales is also reflected in the higher average international sales price. In the nine months ended September 30, 2016, international sales primarily consisted of transactions to ANSAC. During the nine months ended September 30, 2017, we also had higher maintenance expense that was partially offset by lower employee benefit costs, primarily resulting from changes to postretirement benefits.

Selling, general and administrative expenses. Our selling, general and administrative expenses decreased 8.3% to $16.6 million for the nine months ended September 30, 2017, compared to $18.1 million for the nine months ended September 30, 2016. The decrease was primarily driven by lower selling and administrative fees relating to our affiliate, ANSAC, and a higher proportion of employee time spent on Ciner Corp related activities in 2017.

Asset impairment charges. During the nine months ended September 30, 2017, we incurred a $1.6 million asset impairment charge relating to certain assets, which became obsolete as a result of energy sourcing initiatives at our Wyoming facility.

CAPEX AND ORE TO ASH RATIO

The following table below summarizes our capital expenditures, on an accrual basis, and ore to ash ratio:

(1) Ore to ash ratio expresses the number of short tons of trona ore needed to produce one short ton of soda ash and includes our deca rehydration recovery process. In general, a lower ore to ash ratio results in lower costs and improved efficiency.

FINANCIAL POSITION AND LIQUIDITY

As of September 30, 2017, we had cash and cash equivalents of $13.8 million. In addition, we have approximately $88.9 million ($225.0 million, less $124.5 million outstanding and less standby letters of credit of $11.6 million) of remaining capacity under our revolving credit facilities. As of September 30, 2017, our leverage and interest coverage ratios, as calculated per the Ciner Wyoming Credit Facility, were 1.17 and 27.89, respectively.

CASH FLOWS AND QUARTERLY CASH DISTRIBUTION

Cash Flows

Cash provided by operating activities decreased to $45.2 million during the nine months ended September 30, 2017 compared to $103.9 million of cash provided during nine months ended September 30, 2016, primarily driven by $37.3 million of working capital used in operating activities during the nine months ended September 30, 2017, compared to $17.5 million of working capital provided by operating activities during the nine months ended September 30, 2016. The $54.8 million increase in working capital used in operating activities was primarily due to the $40.9 million increase in due-from affiliates.

Cash provided by operating activities during the nine months ended September 30, 2017 were offset by cash used in investing activities of $16.9 million for capital expenditures and cash used in financing activities during the nine month period of $34.2 million. The cash used in financing activities during the nine months ended September 30, 2017 was due to distributions paid of $70.9 million, partially offset by net borrowings and debt issuance costs on the Ciner Wyoming revolving credit facility of $36.7 million.

Quarterly Distribution

On October 26, 2017, the Partnership declared its third quarter 2017 quarterly distribution of $0.567 per unit. This is consistent with the distribution declared during the third quarter of 2016. The quarterly cash distribution is payable on November 20, 2017 to unitholders of record on November 6, 2017.

RELATED COMMUNICATIONS

Ciner Resources LP will host a conference call tomorrow, November 7, 2017 at 8:30 a.m. ET. Participants can listen in by dialing 1-866-550-6980 (Domestic) or 1-804-977-2644 (International) and referencing confirmation 5399369. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection. A telephonic replay of the call will be available approximately two hours after the call’s completion by calling 1-800-585-8367 or 404-537-3406 and referencing confirmation 5399369, and will remain available for the following seven days. This conference call will be webcast live and archived for replay on Ciner Resources’ website at www.ciner.us.com.

ABOUT CINER RESOURCES LP

Ciner Resources LP, a master limited partnership, operates the trona ore mining and soda ash production business of Ciner Wyoming LLC (“Ciner Wyoming”), one of the largest and lowest cost producers of natural soda ash in the world, serving a global market from its facility in the Green River Basin of Wyoming. The facility has been in operation for more than 50 years.

NATURE OF OPERATIONS

Ciner Resources LP owns a controlling interest comprised of a 51% membership interest in Ciner Wyoming. Natural Resource Partners L.P. (“NRP”) owns a non-controlling interest consisting of a 49% membership interest in Ciner Wyoming.

FORWARD-LOOKING STATEMENTS

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