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Sep 30, 2020
Ramaco Q3 2020 Earnings Report
Reported a net loss due to force majeure and lower realized pricing.
Key Takeaways
Ramaco Resources reported a net loss of $4.8 million, or $0.11 per diluted share, for the third quarter of 2020. Adjusted EBITDA was $0.6 million, negatively impacted by force majeure events. Export coal sales reached a quarterly record, and the company anticipates year-end liquidity above $30 million.
Net loss was $4.8 million (EPS loss of $0.11), while adjusted EBITDA was $0.6 million in the third quarter of 2020.
Adjusted EBITDA was negatively affected by $2.6 million, primarily due to the force majeure of nearly 90,000 tons scheduled to be shipped domestically and subsequently resold into a lower priced spot market.
Export coal sales (including to Canada) of almost 300,000 tons were a quarterly record for the Company.
Year-end 2020 liquidity is anticipated to be above $30 million, as compared to $21.8 million at year-end 2019.
Ramaco
Ramaco
Forward Guidance
Ramaco Resources expects to end the year with over $30 million in liquidity and anticipates a record fourth quarter of shipping over 500,000 total tons. The company has placed roughly 1.1 million mostly high-vol tons for 2021 at an average price of $84 per ton.
Positive Outlook
- Expect to end the year with over $30 million in liquidity.
- Have now placed roughly 1.1 million mostly high-vol tons for 2021 at an average price of $84 per ton.
- Markets are stronger than these prices might suggest given the contango in the forward price curve.
- Reserved over one million tons of additional production to be placed into export markets throughout 2021.
- Anticipate a record fourth quarter of shipping over 500,000 total tons.
Challenges Ahead
- Uncertainties of operating in today’s unprecedented COVID-19 conditions.
- Force majeures negatively impacted cost structure.
- Metallurgical coal price indices hit a multi-year low in the third quarter, due to COVID-19 related demand concerns.
- Shipments were intermittent, due to the impact of COVID-19.
- Received force majeure notices from two customers, which could adversely affect up to 10% of the total contracted sales volumes.