Loading...
•
Mar 31, 2022
Ramaco Q1 2022 Earnings Report
Reported record quarterly financial performance, driven by favorable market conditions and increased production levels.
Key Takeaways
Ramaco Resources reported a record first quarter 2022, with net income of $41.5 million and Adjusted EBITDA of $64.1 million, driven by favorable market conditions and increased production. The company was impacted by rail service delays, which negatively impacted EPS by $0.38 and Adjusted EBITDA by $23.0 million. They anticipate a record second quarter and an increased cadence in all key metrics in second half results.
Net income was $41.5 million (diluted EPS of $0.92) and Adjusted EBITDA was $64.1 million.
Total booked sales of roughly 2.4 million tons, with roughly 90% or 2.1 million tons of those sales booked at a fixed price.
Quarterly production of 666,000 tons came in slightly ahead of budget.
The Company closed on the purchase of 100% of the equity interests of Ramaco Coal, LLC.
Ramaco
Ramaco
Forward Guidance
The company expects to increase guided production from up to 3.4 million tons this year by over 20% to over 4 million tons in 2023. The company anticipates higher earnings by next quarter from improving rail service, greater production and a decrease in overall costs, especially on royalties as a consequence of the Ramaco Coal acquisition.
Positive Outlook
- Anticipate a record second quarter and an increased cadence in all key metrics in second half results.
- Committed sales for 2.4 million tons or almost 70% of our 2022 production at the high end of guidance.
- Still have almost 30% of our production left to sell into export markets at currently record levels of pricing.
- Expect to increase guided production from up to 3.4 million tons this year by over 20% to over 4 million tons in 2023.
- Anticipate higher earnings by next quarter from improving rail service, greater production and a decrease in overall costs.
Challenges Ahead
- Operationally during this quarter, because of rail delays we built far more inventory of coal (over 80,000 tons) than we had planned.
- Could not control our rail logistics and received cars for only roughly 80% of our expected shipments.
- First quarter earnings per share would have been $0.38 higher and Adjusted EBITDA would have increased by $23 million to almost $90 million had the rail shipments been on time.
- Immediate met coal spot prices are currently down from the peak.
- Higher than anticipated inflationary headwinds.