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Ramaco Resources, Inc. (METC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was Ramaco’s strongest quarter of the year operationally and financially: record tons sold (1.122M), adjusted EBITDA up 24% q/q to $29.2M, and cash cost per ton fell to $96 despite the weakest met coal pricing of 2024; Class A diluted EPS was $0.06 versus $(0.03) in Q3 and $0.60 in Q4 2023 .
  • Pricing headwinds persisted: realized non‑GAAP revenue per ton declined to $129 from $136 in Q3 and $175 in Q4 2023; cash margins per ton held at $33 (down just $1 q/q) on continued cost and productivity gains .
  • Guidance largely reiterated; only change was a higher 2025 effective tax rate to 25–30% (from 20–25%). Q1 2025 tons sold expected at 850–950k with Q2 shipments ~33% higher; Q1 costs to the high end of the FY cost range due to severe weather and inventory build for Great Lakes shipping .
  • Positioning/catalysts: strong year‑end liquidity ($137.8M) provides offensive/defensive optionality; 2025 committed sales at 3.5Mt (1.9Mt fixed at $145/ton blended), with majority of remaining volumes back‑half weighted; upcoming rare earths PEA (Fluor) and Weir update expected in Q2 could add an incremental narrative catalyst .

What Went Well and What Went Wrong

What Went Well

  • Record execution despite price pressure: “strongest quarter of the year” with adjusted EBITDA up 24% q/q to $29.2M; tons sold >1.1Mt and lowest quarterly cash costs of 2024 ($96/ton) .
  • Cost leadership sustained: cash margins held at $33/ton (down just $1 q/q) as non‑GAAP cash cost per ton fell from $102 to $96; management asserts margins ~50% higher than next highest Central App peer across Q3–Q4 .
  • Operational ramp delivered: Elk Creek production hit a record 672k tons (+63% y/y); commissioning of Maben prep plant cut trucking costs by roughly $20/clean ton, with further savings expected once on‑site loadout is built .

What Went Wrong

  • Pricing headwinds deepened: U.S. met coal indices fell another $12/ton (~6%) q/q and ~$80/ton (~30%) y/y; realized price/ton declined to $129 (–5% q/q; –26% y/y) .
  • YoY profitability compressed: revenue down 16% y/y; Class A diluted EPS $0.06 vs $0.60 in Q4 2023; adjusted EBITDA $29.2M vs $58.5M in Q4 2023 .
  • Near‑term cost headwinds in Q1 2025: severe winter/flooding and inventory build expected to push Q1 costs toward the high end of the FY range; volumes lighter in Q1 (850–950k) with a rebound in Q2 (~+33% q/q) .

Financial Results

Headline metrics vs prior year and prior quarters

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($mm)$202.7 $155.3 $167.4 $170.9
Diluted EPS – Class A ($)$0.60 $0.08 $(0.03) $0.06
Adjusted EBITDA ($mm)$58.5 $28.8 $23.6 $29.2
Tons Sold (000)988 915 1,023 1,122
Non‑GAAP Revenue/ton ($/t)$175 $143 $136 $129
Non‑GAAP Cash Cost/ton ($/t)$107 $108 $102 $96
Non‑GAAP Cash Margin/ton ($/t)$68 $35 $34 $33

Notes: Non‑GAAP per‑ton metrics are FOB‑mine figures defined in company reconciliations .

Production breakdown by complex

Production (000 tons)Q4 2023Q3 2024Q4 2024
Elk Creek412 639 672
Berwind/Knox Creek/Maben333 333 282
Total Company745 972 954

Additional KPIs and balance sheet

KPIQ3 2024Q4 2024
Liquidity ($mm)$80.8 $137.8 (Cash $33.0; Undrawn RCF $104.8)
Capex ($mm)$17.8 $11.9
Cash And Equivalents ($mm)$22.9 $33.0
Revolver UtilizationUndrawn at 12/31/24 Undrawn at 12/31/24
2025 Committed Sales2.7Mt as of early Nov (1.6Mt fixed $152) 3.5Mt as of Feb 28 (1.9Mt fixed avg $145; 1.6Mt index)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax RateFY 202520–25% 25–30% Raised
Production (tons)FY 20254.2–4.6M Reiterated Maintained
Sales (tons)FY 20254.4–4.8M Reiterated Maintained
Cash Costs ($/ton)FY 2025$97–$103 Reiterated Maintained
Capex ($mm)FY 2025$60–$70 Reiterated Maintained
SG&A ($mm)FY 2025$34–$38 (ex‑SBC) Reiterated Maintained
D, D&A ($mm)FY 2025$73–$78 Reiterated Maintained
Interest Expense ($mm)FY 2025$8–$9 Reiterated Maintained
Q1 2025 Tons SoldQ1 2025—850–950k New
Q2 2025 ShipmentsQ2 2025—~+33% q/q vs Q1 New
Q1 2025 CostsQ1 2025—Toward high end of FY cost range (weather, inventory build) New

Earnings Call Themes & Trends

TopicQ2 2024 (prior)Q3 2024 (prior)Q4 2024 (current)Trend
Cost trajectoryCosts fell to $108/t; aiming ≤$100/t exit 2024 $102/t; exit run‑rate sub‑$100/t reiterated $96/t; margins held at $33/t despite lower prices Improving
Supply rationalizationEarly signs; outages, tightness support 2H U.S. met prod –8% q/q; more cuts expected 14Mt annualized Q1 decline; more idlings/bankruptcies likely Intensifying
Domestic steel/tariffsWatching tariffs; U.S. demand supportive U.S. prices near floor; domestic fixed book helpful Tariffs could add 2–3Mt domestic met coal demand Potential tailwind
Sales book1.25Mt 2025 pre‑sold (index) 2.7Mt 2025 (1.6Mt fixed $152) 3.5Mt 2025 (1.9Mt fixed $145; 1.6Mt index) Building
Rare earths (Brook Mine)Fluor engaged; demo facility planning Techno‑economic report to Board Dec; 2025 demo PEA and Weir update expected; begin mining by July; $6.1M WEA grant Advancing
Weather/logisticsModest Q2 transport constraints Normal seasonality; pipeline of projects Severe winter/flooding impacted Q1’25 costs/shipments Near‑term headwind

Management Commentary

  • “We achieved record quarterly tons sold of more than 1.1 million tons, as well as the lowest quarterly cash costs of the year… Adjusted EBITDA and sales were the strongest of the year” – Randall Atkins, CEO .
  • “Fourth quarter margins per ton sold remained at $33 per ton… almost 50% higher than the next highest Central Appalachian public peer for the average of both the third and fourth quarters of 2024” .
  • On supply: “By the end of this year, as much as 16 million domestic tons of met production will have come out of the U.S. market since its peak in Q2 of ’24” .
  • On growth optionality: company can add ~2Mt of low‑vol production (Maben deep expansion ~1.5Mt; Berwind #3/#4 0.5Mt) with modest aggregate capex ($40M over ~2 years) when market clarity improves .

Q&A Highlights

  • Netbacks and fixed price context: Seaborne fixed $111/ton reflected rolled‑off Asian high‑vol contracts; current netbacks roughly $125/nt for high‑vol, low‑vol +$3–$5 above that (mine net) .
  • Growth capex optionality: Embedded ~$20M growth capex in 2025 plan; long‑term additions of ~2Mt achievable with ~$40M total capex over ~2 years (Maben deep ~$30M; Berwind incremental ~$10M) .
  • Maben logistics savings: Commissioned prep plant reduced trucking by ~$20/clean ton; building on‑site loadout (not 2025) would unlock another ~$20/ton saving .
  • Cost sustainability if prices rise: Structural cost improvements from better geology and productivity should persist; only royalty/sales‑related costs move up with price .
  • Rare earths capex: Pilot plant capex included in 2025 $60–$70M plan; awaiting Fluor PEA for broader capex envelope; $6.1M matching grant recommended by Wyoming Energy Authority .

Estimates Context

  • S&P Global consensus estimates were unavailable at the time of analysis due to access limits; as a result, we cannot provide numerical comparisons vs consensus for Q4 2024 results (S&P Global data unavailable).
  • Based on company-reported figures, revenue grew 2% q/q to $170.9M, Class A EPS improved to $0.06 from $(0.03), and adjusted EBITDA rose 24% q/q to $29.2M; without consensus, we cannot determine beat/miss status .

Key Takeaways for Investors

  • Positive execution amid pricing trough: sequential uplift in revenue, EBITDA, EPS with costs down to $96/t and record sales volumes; validates cost leadership and operating leverage heading into 2025 .
  • Near‑term cadence: expect softer Q1 2025 (weather/inventory), followed by ~33% sequential shipment rebound in Q2; costs elevated near the high end in Q1 before normalizing .
  • Sales de‑risking: 2025 book at 3.5Mt (1.9Mt fixed at $145/ton blended; 1.6Mt index), providing visibility while retaining upside on back‑half pricing .
  • Macro watchpoints: U.S./EU steel tariffs and ongoing U.S. supply rationalization could tighten markets; company highlights potential 2–3Mt incremental domestic met coal demand if tariffs bite .
  • Growth optionality with modest capex: ability to add ~2Mt of low‑vol production over 24–36 months for ~<$40M cumulative capex provides asymmetric upside when pricing improves .
  • Liquidity/optional M&A: $137.8M year‑end liquidity and undrawn revolver provide both defense and opportunistic offense in a distressed market; senior notes outstanding bolster capital stack flexibility .
  • Additional catalyst set: Rare earths PEA (Fluor) and Weir geology update expected in Q2; management intends to commence full‑scale mining by July to supply a pilot facility—disclosure cadence could influence sentiment .

Appendix: Other Relevant Q4 2024 Press Releases

  • Initial 2025 guidance (Dec 5, 2024): 2025 production 4.2–4.6Mt; sales 4.4–4.8Mt; cash cost $97–$103/t; capex $60–$70M; SG&A $34–$38M; D, D&A $73–$78M; interest $8–$9M; tax 20–25% (later raised to 25–30%) .
  • Q4 2024 dividend declaration (Nov 20, 2024): Class A $0.1375/share and Class B $0.2364/share payable in Class B stock; rationale to preserve liquidity and expand Class B float .

Sources: Ramaco Q4 2024 press release and 8‑K (including financial statements and reconciliations) ; Q4 2024 earnings call transcript ; Q3 2024 press release and call ; Q2 2024 press release and call .