Ramaco Q2 2023 Earnings Report
Key Takeaways
Ramaco Resources reported a net income of $7.6 million for Q2 2023, a decrease from $25.3 million in Q1 2023. The results were affected by transportation issues. The company is progressing with its rare earth element project and has updated its 2023 production and sales guidance.
Net income was $7.6 million, down from $25.3 million in the previous quarter.
Adjusted EBITDA was $30.0 million, compared to $48.3 million in the previous quarter.
Transportation issues negatively impacted net income and Adjusted EBITDA by $9 million and $11 million, respectively.
The company has 3.1 million tons of committed sales, with 2.2 million tons at a fixed price of $188 per ton.
Ramaco
Ramaco
Forward Guidance
Ramaco Resources updated its full-year 2023 guidance, adjusting production, sales, and capital expenditure expectations. The company anticipates increased production and sales in the fourth quarter, with a focus on cost management and strategic initiatives.
Positive Outlook
- Berwind No. 1 mine's first section will complete development production soon, with the second section in full production during Q3 2023.
- Maben surface and highwall mines continue to increase production as projected.
- Elk Creek preparation plant reached full capacity of 3 million tons after a 50% capacity upgrade.
- Company expects to be selling coal at a quarterly rate above one million tons and an annual rate of more than 4 million tons by Q4 2023.
- The company is focusing on increasing met coal production and processing capacity at Elk Creek.
Challenges Ahead
- 2023 production guidance lowered to 3.0 – 3.5 million tons from 3.1 – 3.6 million tons due to idling the Triple S mine.
- 2023 sales guidance updated to 3.1 – 3.6 million tons from 3.3 – 3.8 million tons.
- 2023 cash costs guidance increased to $102 – $108 per ton from $97-103 per ton due to inflation and higher mine development costs.
- 2023 Capital Expenditures lowered to $60 – $70 million from $65 – $80 million previously.
- U.S. metallurgical coal spot pricing is down over 20% from the first half of 2023.