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Ramaco Resources(METC) - 2024 Q4 - Earnings Call Transcript
METCRamaco Resources(METC)2025-03-11 16:42
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Financial Data and Key Metrics Changes - The fourth quarter of 2024 was the strongest quarter of the year for the company, with adjusted EBITDA of 29millioncomparedto29 million compared to 24 million in Q3, and net income of 4millioncomparedtobreakeveninQ3[35][41]−Cashmarginsremainedat4 million compared to breakeven in Q3 [35][41] - Cash margins remained at 33 per ton, down just 2pertonsinceQ2,despitea2 per ton since Q2, despite a 30 drop in met coal prices [8][34] - Year-end liquidity reached 138million,upmorethan50138 million, up more than 50% year on year, marking the highest year-end liquidity in company history [41][42] Business Line Data and Key Metrics Changes - Record tons sold were achieved in Q4, with a run rate of 4.5 million tons per annum, the highest level in company history [36] - Cash costs exited 2024 in the mid-nineties per ton range, the best among publicly traded peers [36] Market Data and Key Metrics Changes - Metallurgical coal prices have been under pressure, with a significant drop in prices due to increased steel exports from China [10][62] - Domestic steel prices have shown signs of recovery, with hot-rolled coil prices increasing from less than 700 per ton in Q3 to 940perton[11]CompanyStrategyandDevelopmentDirection−Thecompanyplanstoincreasefutureproductionbyaddingapproximately2milliontonsoflowvolatilecoal,withexpansionsattheMavencomplexandcontinuedmininginothersections[19][20]−TherareearthandcriticalmineralsprojectinWyomingisadvancing,withplansforfull−scaleminingtobegininJuly[21][23]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementremainscautiouslyoptimisticaboutpotentialpriceincreasesinthesecondhalfoftheyear,despitecurrentmarketchallenges[31]−Thecompanyismaintainingahighlevelofliquiditytonavigatemarketuncertaintiesandtocapitalizeonpotentialopportunities[18][19]OtherImportantInformation−Thecompanyhasreceiveda940 per ton [11] Company Strategy and Development Direction - The company plans to increase future production by adding approximately 2 million tons of low volatile coal, with expansions at the Maven complex and continued mining in other sections [19][20] - The rare earth and critical minerals project in Wyoming is advancing, with plans for full-scale mining to begin in July [21][23] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about potential price increases in the second half of the year, despite current market challenges [31] - The company is maintaining a high level of liquidity to navigate market uncertainties and to capitalize on potential opportunities [18][19] Other Important Information - The company has received a 6 million matching fund grant recommendation from the Wyoming Energy Authority for the rare earth project [24] - The overall size of the rare earth resource is now estimated at 1.7 million tons, an increase from the previous estimate of 1.5 million tons [25] Q&A Session Summary Question: Can you provide insight on the seaborne volumes fixed at 111pertonandthecurrentnetbacksforvariousqualities?−The111 per ton and the current netbacks for various qualities? - The 111 figure reflects index-linked prices for January and February, with high vol netbacks around 125pertonandlowvolslightlyhigher[80][81]Question:Whatisthecapitalintensityofyourgrowthprojectsandwhatconditionswouldtriggermovingforward?−Thecurrentguidanceincludesabout125 per ton and low vol slightly higher [80][81] Question: What is the capital intensity of your growth projects and what conditions would trigger moving forward? - The current guidance includes about 60 million to $70 million in capital expenditures, with growth capital split between Elk Creek and Berwind [84][90] Question: How do you see balancing growth, shareholder returns, and protecting the business during this downturn? - The company is looking for opportunistic acquisitions in a distressed market while maintaining a modest growth CapEx for 2025 [122][124]