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Sep 30, 2024
Ramaco Q3 2024 Earnings Report
Ramaco Resources reported mixed results with increased production and sales but a net loss, influenced by declining metallurgical coal indices.
Key Takeaways
Ramaco Resources reported a net loss of $(0.2) million for Q3 2024, impacted by a decline in metallurgical coal indices. However, the company achieved record quarterly production and sales volumes while reducing non-GAAP cash costs per ton. Sales commitments for 2024 reached 4.1 million tons, and 2.7 million tons are already committed for 2025.
Net loss of $(0.2) million, or $(0.03) per share, compared to a net income of $19.5 million in Q3 2023.
Record quarterly production of 972,000 tons and sales of 1,023,000 tons.
Non-GAAP cash cost per ton sold decreased to $102, a $6 decrease from the previous quarter.
Sales commitments for 2024 are 4.1 million tons, with 3.3 million tons already committed at an average realized price of $148 per ton.
Ramaco
Ramaco
Forward Guidance
Ramaco Resources reduced its overall production and sales guidance for 2024, but anticipates minimal impact on overall earnings. The company expects cash costs to be similar in both the third and fourth quarters of 2024 and anticipates a sales increase in Q4.
Positive Outlook
- Cash costs are anticipated to be similar in both the third and fourth quarter of 2024.
- Sales increase in the fourth quarter expected to provide a year-end exit run rate in excess of 5 million tons at the high end of guidance.
- Cash costs to be below $100 per ton on a normalized basis, excluding vacation periods.
- High vol additions at Elk Creek complex should add roughly 600,000 annualized tons to overall 2024 Elk Creek production.
- Maben complex prep plant was commissioned on time and will reduce current trucking costs by approximately $40 per ton.
Challenges Ahead
- Overall production and sales guidance is being reduced by 0.2 million tons at the midpoint.
- U.S. metallurgical coal indices fell $15 per ton, or 7% on average in the third quarter of 2024 versus the second quarter, and $25 per ton, or 12% versus the third quarter of 2023.
- Total sales commitments are 4.1 million tons as of September 30, which equates to more than 100% of the high end of 2024 production guidance.
- The Knox Creek Jawbone mine was closed, which was both nearing end of mine life and the Company’s only loss making mine.
- Financial results were lower this quarter than in the second quarter due to the $15 per ton sequential decline in U.S. met coal indices impacting revenue.