Increases Full-Year 2024 Guidance
Announces Purchase of Prep Plant for Maben Mine Complex
LEXINGTON, Ky., Feb. 12, 2024 /PRNewswire/ — Ramaco Resources, Inc. (NASDAQ:METC, METCB, “, Ramaco”, or the “, Company”, )), a leading operator and developer of high-quality, low-cost metallurgical coal, today provided an update on several operational and financial matters.
FOURTH QUARTER 2023 HIGHLIGHTS
The Company anticipates that net income will settle in the range of $28 – $30 million (Adjusted EPS $0.65– $0.68, a non-GAAP measure) and Adjusted EBITDA will settle in the $56 – $58 million range for the three months ended December 31, 2023. This represents an increase from the third quarter of almost 50% on both net income and Adjusted EPS. Adjusted EBITDA is projected to increase over 25%. Fourth quarter 2023 results are anticipated to be the strongest of any quarter in 2023. See reconciliation of non-GAAP financial measures.
The Company shipped just under 1 million tons of coal for the second straight quarter. This achieves its previous guidance of achieving a ratable annualized sales run-rate of roughly 4 million tons in 2023. Overall production for 2023 was approximately 3.2 million tons.
Overall coal inventory levels (clean coal equivalent) declined by ~0.2 million tons, to a year end figure of roughly ~0.3 million tons. In 2024, the Company anticipates further ongoing sale of and reduction in inventory levels.
The Berwind deep mine produced at over a 600,000 ton per annum run rate (adjusted for vacation weeks in Nov. and Dec.), with cash mine costs of less than $90 per ton from both sections. Cash costs for the entire Berwind Complex improved to under $100 per ton for the fourth quarter.
ANNUAL 2023 HIGHLIGHTS
The Company expects to report its fully audited results for calendar 2023 in early March 2024. Accordingly, the amounts included in this press release are preliminary and unaudited.
The Company currently anticipates that for the year ended December 31, 2023, net income will settle in the range of $80 – $82 million (Adjusted EPS $1.85 – $1.88, a non-GAAP measure) and Adjusted EBITDA will settle in the $180 – $182 million range. This would represent Ramaco’s second-best financial year of net income and Adjusted EBITDA on record.
The Company expects its cash mine costs to be approximately $109 per ton for the full-year 2023 and approximately $107 per ton for the fourth quarter of 2023.
The Company sold a record of approximately 3.5 million tons in 2023 at an average price of $169 per ton. Overall tons sold were up more than 40% versus 2022 levels.
The Company expects receipt from Weir International, Inc. in early March of a semi-annual Technical Report update on the Brook Mine Rare Earth Exploration Target.
2024 COAL SALES AND PRODUCTION GUIDANCE INCREASE
SALES COMMITMENTS IN 2024 ARE NOW 3.8 MILLION TONS OR ALMOST 90% ABOVE PRIOR GUIDANCE
Since the Company’s last guidance update in early December 2023, Ramaco has committed an additional 1.8 million tons for sale into export markets in 2024 at index-linked pricing.
As of today, the Company now has 3.8 million tons committed for delivery in 2024 which is an increase of roughly 90% since our last guidance. This consists of 1.5 million tons committed to North American customers at an average realized price of $167 per ton and an additional 2.3 million tons committed at mostly index-linked pricing for delivery to export customers. This level of sales would be 96% of the low end of our original 2024 production guidance of 3.9 million tons.
The Company is now raising both its 2024 sales and production guidance based on this material increase to 2024 committed sales reflective of strong market acceptance of the Company’s coals.
The Company is increasing its 2024 base level sales guidance to between 4.2 – 4.6 million tons, up from 4.1 – 4.6 million tons previously. The Company’s customer mix for 2024 would be approximately one-third domestic fixed price and two-thirds export index priced business at the midpoint of sales guidance.
Depending on continued market conditions, the Company believes that an annual sales run-rate level of approximately 5 million tons may be achievable by year-end 2024. This would include sales of an additional more than 0.5 million tons of both purchased coal and carryover inventory from 2023. This 5-million-ton annualized run-rate would represent a year over year increase in sales of roughly 1.5 million tons or roughly 40% above 2023 levels.
The Company expects 2024 production of between 4.0 – 4.4 million tons, up from a previous guidance of between 3.9 – 4.4 million tons. Depending on market conditions, the Company believes that a higher level of production may be achievable.
RAMACO ANNOUNCES PURCHASE OF PREPARATION PLANT FOR MABEN COMPLEX
The Company has recently completed the purchase of an existing coal preparation plant which will be relocated to the Company’s Maben Complex. The purchase price of the plant is $3 million. The Company anticipates spending an additional $8 million in initial development capital expenditures related to the plant in 2024. These costs would include amounts related to the relocation, reassembly, and expansion of the facility at Maben.
The purchase of the plant was in line with the Company’s goals to decrease the cost of trucking current raw coal production from Maben to the Company’s Berwind preparation facility. It also provides the optionality to have a preparation facility to handle additional future production from a deep mine complex …
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