Ramaco Resources(US:METC)2023-08-09 17:19Financial Data and Key Metrics Changes - In Q2 2023, net income was $8 million, down $18 million from Q1 2023, with diluted EPS of $0.17, a decrease of $0.40 [33] - Adjusted EBITDA fell to $30 million from $48 million in Q1 2023, reflecting a challenging market environment [33] - Realized price per ton decreased by 12% to $163, with U.S. high Vol A indices averaging 25% less in Q2 compared to Q1 [10][30] Business Line Data and Key Metrics Changes - Total production reached 876,000 tons in Q2, a quarterly record, up 5% compared to Q1, while total sales volume was 715,000 tons, down 6% due to transportation issues [84] - Cash costs per ton sold were $109, higher than the cash cost of production of $103, largely due to inflationary pressures and inventory build [34] Market Data and Key Metrics Changes - Worldwide benchmark pricing has seen a decline, with prices in Q3 expected to fall 10% from Q2 averages [10] - Demand remains tepid, but supply is also subdued, with global coal CapEx at historically low levels due to financing and ESG challenges [87] Company Strategy and Development Direction - The company is focusing on increasing production at existing mines and optimizing costs, with the Berwind mine expected to ramp up production in Q4 [31][65] - Development mining at the Brook Mine for rare earth elements is set to begin, positioning the company as a low-cost producer in both metallurgical coal and rare earths [32][79] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter was challenging due to price declines and inflationary pressures, but highlighted a strong contracted position that insulates the company from some market volatility [29][81] - Looking ahead, the company anticipates a stronger Q4 with increased production and lower costs as sales volume rises [34][82] Other Important Information - The board approved the payment of an initial core dividend in Q3, based on Q2 results, despite transportation issues affecting shipments [86] - The Elk Creek Prep plant reached full processing capacity of 3 million tons, up 50% from its previous capacity [8] Q&A Session Summary Question: What does the pricing outlook look like for the remainder of the year? - Management indicated that pricing is expected to decline 12% to 15% from first-half levels if current prices hold [41][42] Question: Can you provide insights on the rare earth project and its economic analysis timeline? - Initial results from the rare earth project are expected within six to nine months, with a focus on processing and separation techniques [61][62] Question: What are the implications of the idling of the Triple S Mine? - The idling is a response to market conditions, and management expects to shift resources to the Berwind mine, which has a newer fleet and better cost profile [48][49]