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Sep 30, 2022
Ramaco Q3 2022 Earnings Report
Reported net income of $26.9 million and Adjusted EBITDA of $50.7 million, which were 282% and 185% respectively above the prior highest third quarter on record, despite a $3.9 million negative impact from idle costs at the Berwind mine.
Key Takeaways
Ramaco Resources reported a record third quarter, with net income increasing by over 280% compared to the same period last year, driven by higher realized pricing. The company is fully sold out for 2022 and has committed 1.8 million tons for 2023 delivery. The refurbishment of the Berwind Preparation Plant is nearing completion, expected to lower cash costs.
Net income of $26.9 million and Adjusted EBITDA of $50.7 million were significantly above the prior highest third quarter on record.
The Company is now fully sold out for 2022 at an average price of $210 per short ton FOB mine.
Work is nearing completion of the refurbishment and upgrade of the Berwind Preparation Plant, anticipated to materially lower cash costs.
The Company is providing an initial framework for its proposed 2023 shareholder return program, including progressive dividend increases and share repurchase.
Ramaco
Ramaco
Forward Guidance
The company expects a record fourth quarter in 2022 based on being fully sold out for the year. Looking ahead to 2023, the company anticipates almost doubling 2023 production and expects to place over 60% of its coal into the export markets.
Positive Outlook
- The plant will materially lower our cash costs from the Berwind Complex by avoiding millions of dollars of annual trucking costs.
- It will similarly reduce logistical challenges by elimination of a 25-mile truck haul to our Knox Creek preparation plant.
- Our overall mine costs across all operations came down around 8% this quarter and have again positioned us as a peer cost leader in the Central Appalachian markets.
- We recently processed our first tons of coal at our Berwind preparation plant.
- In late September, we closed on the accretive Maben low vol reserve acquisition, which we anticipate being a meaningful earnings contributor in 2023.
Challenges Ahead
- Results are below what we would have hoped given the combination of the unfortunate Berwind ignition event in early July.
- Declines in seaborne coal pricing
- Continued macro pressure on worldwide steel demand
- Ongoing logistical rail challenges
- Macro headwinds in the overall economic climate