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Dec 31, 2023
Ramaco Q4 2023 Earnings Report
Ramaco Resources reported its strongest financial quarter of the year, driven by growth strategy execution and increased sales volume.
Key Takeaways
Ramaco Resources reported net income of $30.0 million for Q4 2023, a significant increase compared to the previous quarter. The company's strong performance was attributed to increased sales volume and execution of its growth strategy, shipping at a 4 million ton per annum run rate. The company also reduced its term debt and ended the year with a record level of liquidity.
Adjusted EBITDA for Q4 2023 was $58.5 million, compared to $45.4 million in the third quarter of 2023.
Net income for Q4 2023 was $30.0 million, compared to $19.5 million in the third quarter of 2023.
The company shipped at a 4 million ton per annum run rate in both the third and fourth quarters of 2023.
The company ended 2023 with a record level of liquidity of $91 million.
Ramaco
Ramaco
Forward Guidance
Ramaco Resources anticipates sales of 4.2 - 4.6 million tons and production of 4.0 - 4.4 million tons in 2024, with roughly two-thirds of sales exported at index-linked pricing.
Positive Outlook
- Potential for annual sales run-rate above guidance by year-end 2024, including sales of more than 0.5 million tons of purchased coal and carryover inventory.
- Expected operational coal preparation plant at Maben Complex by Q4 2024, reducing trucking and mine cash costs.
- Anticipated increasing shipment cadence throughout 2024, with a higher run rate in the second half of the year.
- Extension and increase in size of existing Revolver facility with KeyBank, NA, providing greater liquidity for growth plans.
- Expected release of updated Exploration Target report on the Company’s rare earth deposit in Wyoming.
Challenges Ahead
- Dependence on continued market conditions to achieve sales exceeding guidance.
- Additional $8 million in initial development capital expenditures related to the coal preparation plant relocation.
- Anticipated first quarter shipments of 800,000 – 950,000 tons of coal, lower than the targeted run rate for the second half of 2024.
- Finalization of the new syndicated Revolver facility expected to be completed early in the second quarter.
- Uncertainty regarding the commercial development of the Brook Mine REE project, pending the updated Target Exploration report.