Ramaco Resources (METC) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered record production of 901,000 tons, up 7% sequentially, and over 100% increase in net income, despite a 15% sequential and 25% YTD decline in U.S. met coal indices and global pricing softness.

• Operational improvements, better productivity, and labor availability drove results, with cash costs declining 8% quarter-over-quarter to $108 per ton.

• Maintains a conservative balance sheet with net debt to trailing twelve-month EBITDA below 0.4x and ongoing debt reduction.

• Rare earth element (REE) initiatives at Brook Mine advance, with a demonstration facility planned for 2025 and technical analysis by Fluor Corporation.

• Hosted fourth annual R3 conference, enhancing research and industry partnerships.

Financial highlights

• Q2 2024 adjusted EBITDA was $28.8 million, up from $24 million in Q1; net income was $5.5 million, more than double Q1, with diluted EPS of $0.08.

• Q2 2024 revenue was $155.3 million, up 13% year-over-year; tons sold were 915,000, up 28% year-over-year.

• Cash cost per ton sold in Q2 2024 was $108, down from $118 in Q1 and $110 in Q2 2023.

• Liquidity at June 30, 2024, was $71.3 million, with $27.6 million in cash and $43.7 million available under the revolver.

• Quarterly dividends declared: $0.1375 per Class A share and $0.2246 per Class B share.

Outlook and guidance

• 2024 production guidance revised to 3.8–4.2 million tons; sales guidance to 4.0–4.4 million tons; cash cost per ton expected at $105–$111.

• Q3 2024 shipments projected at 900,000–1,050,000 tons; Q4 sales expected to increase.

• Nearly 1 million tons of new annualized production to be added by year-end from new mines and prep plant.

• 2025 sales commitments already at 1.25 million tons, primarily multi-year export contracts at prices above $150/ton.

• Capable of organically growing production to over 7 million tons in the medium term, subject to market conditions.