Ramaco Resources (METC) Q3 2024 earnings summary

Executive summary

• Achieved record quarterly production of 972,000 tons and sales of 1,023,000 tons in Q3 2024, reflecting improved productivity and increased output.

• Maintained strong operational performance and cost control, reducing mine costs by over 25% year-to-date, from $120/ton in March to $93/ton in September.

• Net income for Q3 2024 was $(0.2) million, down from $5.5 million in Q2 2024 and $19.5 million in Q3 2023; adjusted for the Knox Creek Jawbone mine closure, net income would have been ~$1 million.

• Rare earth element (REE) project at Brook Mine progressing, with a techno-economic analysis expected in December and demonstration facility construction planned for 2025.

• Maintains a conservative balance sheet with net debt to trailing 12-month Adjusted EBITDA below 0.4x and ongoing debt reduction.

Financial highlights

• Q3 2024 revenue was $167.4 million, up 8% sequentially but down 10% year-over-year, with a 3% increase in tons sold but a 13% decrease in revenue per ton.

• Adjusted EBITDA for Q3 2024 was $23.6 million, down 18% sequentially and 48% year-over-year.

• Cash costs per ton sold declined to $102, a 6% sequential and 10% year-over-year decrease, placing the company in the first quartile of the U.S. cost curve.

• Cash margin per ton was $34, or 25%, flat versus Q2 despite price declines.

• Liquidity at September 30, 2024 was $80.8 million, with net debt at approximately $54.9 million.

Outlook and guidance

• 2024 production guidance reduced to 3.7–3.9 million tons; sales guidance to 3.9–4.1 million tons, with normalized cash costs expected below $100/ton by year-end.

• Full-year 2024 cash cost guidance midpoint lowered to $106–$109 per ton; capital expenditures expected at the high end of $61–$65 million.

• 2025 sales commitments at 2.7 million tons, with 1.6 million tons fixed price at $152/ton; further specialty coal sales expected to raise average price.

• Rare earth and critical minerals initiatives advancing, with demonstration facility planned for 2025.

• Company aims to reach 5 million tons of annualized sales in Q4 2024 and targets over 7 million tons over the medium term.