1. Ramaco reported strong fourth quarter results amidst weak metallurgical coal prices. 2. Sales volume rose 10% year-over-year, achieving record quarterly tons sold. 3. Cash costs per ton decreased to $96, down $6 from the prior quarter. 4. Industry faces potential production cuts due to declining steel demand and bankruptcies. 5. Rare earth development at Brook Mine shows promise, bolstered by Wyoming grant.
Despite weak coal prices, Ramaco improved operational efficiency and reported record sales. Historically, strong operational metrics can lead to price appreciation, especially if production declines in the industry continue.
The article outlines operational improvements and market dynamics impacting METC, suggesting a direct relationship with future price movements.
Anticipated production cuts and potential demand increase from tariffs could support future price recovery in metallurgical coal, favoring long-term bullish sentiment.
LEXINGTON, Ky., March 10, 2025 /PRNewswire/ -- Ramaco Resources, Inc. (NASDAQ: METC, METCB, "Ramaco" or the "Company"), is a leading operator and developer of high-quality, low-cost metallurgical coal in Central Appalachia and future developer of rare earth and critical minerals in Wyoming. Today it reported financial results for the three months and twelve months ended December 31, 2024.
Production and Costs:
Guidance:
Rare Earths and Critical Minerals:
Randall Atkins, Ramaco Resources' Chairman and Chief Executive Officer commented, "The fourth quarter saw the continued Chinese overproduction of steel combined with its below market sale into both to the developed and developing world. During most of the entire year of 2024 this has had an ongoing negative impact on the met coal industry results. Specifically, it has hurt both steel prices and margins in 2024 and led world steel companies to cut back on both production and pricing for their met coal feedstock.
Despite this macro headwind on pricing, Ramaco's fourth quarter results were our strongest operational and financial quarter of the year. In simple terms, we did very well in those areas we could control. We succeeded in both reducing costs and increasing sales for the third consecutive quarter. We anticipate the same positive operational progress in 2025, excluding results from the Q1 weather events. We are extremely proud of both our operations and sales teams for the work they have performed.
The Company also enjoyed its strongest quarter of the year in terms of both Adjusted EBITDA and sales. This was despite the fourth quarter being the weakest quarter of 2024 in terms of metallurgical coal price indices. We achieved record quarterly tons sold of more than 1.1 million tons, as well as the lowest quarterly cash costs of the year. Cash cost per ton sold declined quarterly by $6 per ton in the fourth quarter of 2024 to $96 per ton, which was $22 per ton below first quarter of 2024 cash costs.
As a result of this solid operational performance, fourth quarter of 2024 margins per ton sold remained at $33 per ton, down just $1 per ton from the third quarter, and down just $2 per ton from the second quarter of 2024. Based on these results, we believe our cash margins were almost 50% higher than the next highest Central Appalachian public peer for the average of both the third and fourth quarters of 2024.
As we survey the macro met coal markets for 2025, we believe that while overall steel demand remains weak in the near term, there are reasons to expect prices may increase over the course of 2025, especially in the second half of the year.
Anecdotally, on the supply side we believe that U.S. production of metallurgical coal in the first quarter of 2025 is likely to have declined by 14 million tons on an annualized basis from the 2024 peak.
As we move forward into the year, we also expect to see increased domestic idling associated with lower quality high vol production typically destined for Asian markets. Netback economics at today's prevailing prices are prohibitive for these mostly higher cost operations.
As of December 31, 2024, the Company had record year-end liquidity of $137.8 million, consisting of $33.0 million of cash plus $104.8 million of availability under our revolving credit facility.
Key operational and financial metrics are presented below (unaudited):
| Key Metrics | 4Q24 | 3Q24 | 4Q23 |
|---|---|---|---|
| Total Tons Sold ('000) | 1,122 | 1,023 | 988 |
| Revenue ($mm) | $170.9 | $167.4 | $202.7 |
| Net Income (Loss) ($mm) | $3.9 | ($0.2) | $30.0 |
Ramaco Resources, Inc. is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, and southwestern Virginia and a developing producer of rare earth and critical minerals in Wyoming. Its executive offices are in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming.
Ramaco Resources will hold its quarterly conference call and webcast at 9:00 AM Eastern Time (ET) on Tuesday, March 11, 2025.
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.