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Jun 30, 2020
Ramaco Q2 2020 Earnings Report
Reported net income of $2.7 million and adjusted EBITDA of $10.8 million.
Key Takeaways
Ramaco Resources, Inc. reported a decrease in net income to $2.7 million, with earnings per diluted share of $0.06 for the quarter ended June 30, 2020. Adjusted EBITDA was $10.8 million. The company liquidity was $31.8 million as of June 30, 2020.
Net income was $2.7 million (EPS of $0.06).
Adjusted EBITDA was $10.8 million.
Liquidity was $31.8 million as of June 30.
Entered into an exclusive marketing arrangement with Square Resources to market metallurgical coal into the Asian steel markets.
Ramaco
Ramaco
Forward Guidance
Company is cautiously optimistic about the medium-term, citing improving U.S. steel capacity utilization, a projected increase in metallurgical coal prices, recovery in global steel demand, and near-record arbitrage between Chinese domestic and international met coal prices.
Positive Outlook
- U.S. steel capacity utilization is currently at 59%.
- Forward pricing curve for metallurgical coal suggests a roughly 25% increase by the first quarter of 2021 to $135 per ton as compared to $107 per ton today.
- Global steel demand outside of China has also begun to recover.
- Temporary port restrictions continue to provide a near record $50 per ton arbitrage per Platts, when comparing Chinese domestic versus international met coal prices.
- Chinese steel production also seems to have fully rebounded from the COVID-19 slowdown, and appears on pace for yet another record year.
Challenges Ahead
- Uncertainties of operating in today’s unprecedented conditions.
- Difficult personnel decisions in July with regard to our workforce levels and on capital spending.
- All discretionary capital spending remains suspended, until there is more market clarity.
- Received force majeure notices from two customers, which could adversely affect up to 12% of total contracted sales volumes for 2020.
- Cash margins on Company produced coal were down 62% from the same period of 2019, because of lower realized pricing, on the back of large declines on the various metallurgical coal indices.