Loading...
•
Dec 31, 2022
Ramaco Q4 2022 Earnings Report
Reported financial results for Q4 and full year 2022.
Key Takeaways
Ramaco Resources reported a net income of $14.4 million, or $0.32 per diluted share, for the three months ended December 31, 2022. Adjusted EBITDA was $31.9 million. Results were affected by extreme cold temperatures and a drop in API2 index pricing.
Net income of $14.4 million (diluted EPS of $0.32).
Adjusted EBITDA was $31.9 million.
Berwind Preparation Plant refurbishment and upgrade completed in Q4 2022.
First shipments made this quarter into India.
Ramaco
Ramaco
Forward Guidance
Ramaco Resources anticipates an ~825,000 ton increase in production over 2022 at the high end of guidance. Expects to pay down the majority of their remaining debt in order to maintain their strong balance sheet. Lastly, they will continue to pursue their dual longer-term objectives of combining an increase in profitable production with a steady growth in return of capital to their shareholders.
Positive Outlook
- The Company expects that approximately two thirds of its 2023 production at the high end of guidance will be sold as mostly floating index priced export business to take advantage of any upward pricing environment.
- The mine returned to operations last week, and we expect it will hit full production from the first section by the third quarter of 2023.
- In late April, the Company expects a 50% increase from 2 million to 3 million tons per year in the annualized processing and shipping capacity at the Elk Creek preparation plant.
- In 2023 we anticipate an ~825,000 ton increase in production over 2022 at the high end of guidance.
- We also expect to pay down the majority of our remaining debt in order to maintain our strong balance sheet.
Challenges Ahead
- The Company’s net income and Adjusted EBITDA were affected by extreme cold temperatures that caused approximately 150,000 tons of shipments to be pushed into January 2023 due to negative rail and port performance.
- Company earnings were negatively impacted by the 50% drop during December in API2 index pricing on a large seaborne met coal sale for thermal use into Europe.
- We had the unfortunate ignition at Berwind in July. This cost us several hundred thousand tons of projected production in 2022 and with it substantial expected earnings.
- At the time of the contract, the API2 index was priced around $400 per ton. Unfortunately, the API2 index moved against us and our realized pricing dropped by almost two-thirds over the course of the contract.
- We now estimate that last year rail and logistics issues negatively impacted our earnings each quarter by an average of $14 million of Adjusted EBITDA or $11 million of net income.