Ramaco Resources B 2025 Q1 Earnings Misses Targets as Net Income Drops 575%

Ramaco Resources B (METCB) reported its fiscal 2025 Q1 earnings on May 12th, 2025. The company faced a challenging quarter, missing expectations with a significant decline in revenue and net income. Ramaco adjusted its guidance due to weak market conditions, reducing production targets to optimize margins. Despite market challenges, Ramaco is advancing its rare earth elements project, indicating potential future diversification. The company remains committed to capital discipline, lowering its capital expenditure guidance and maintaining a strong forward sales position with over 90% production commitments.

Revenue

Ramaco Resources B experienced a revenue decline of 22.0% in the first quarter of 2025, totaling $134.66 million compared to $172.68 million in the same period of 2024. The coal sales segment contributed entirely to this revenue figure. The North American market generated $44.03 million, while export revenue excluding Canada accounted for $90.63 million. This comprehensive revenue breakdown reflects the company's performance across different geographical segments.

Earnings/Net Income

Ramaco Resources B reported an EPS of $-0.19 for Q1 2025, consistent with 2024 Q1 figures. The company faced a net loss of $9.46 million, a significant deterioration of 565.4% compared to the net income of $2.03 million in Q1 2024. This performance indicates a negative EPS trend.

Post-Earnings Price Action Review

The strategy of buying Ramaco Resources B (METCB) after earnings misses and holding for 30 days aims to leverage price movements from such events. Using historical earnings data, a buy signal is triggered when a company misses expectations, followed by a sell signal after 30 days. The hypothetical backtest assesses the strategy's profitability, yet actual market performance may vary. Evaluating historical data offers insights into the strategy's potential effectiveness in diverse market conditions. While the backtest indicates promise, continuous evaluation and refinement based on real-time market conditions are crucial for sustained effectiveness. Adaptations under varying parameters can enhance the strategy's viability, emphasizing that past performance doesn't guarantee future results.

CEO Commentary

Randall Atkins, Chairman and CEO of Ramaco Resources, stated, "At this juncture in 2025 we are enduring the challenging market conditions in our core metallurgical coal business yet experiencing some very exciting developments in our emerging rare earth and critical mineral business. Despite record current quarterly production that annualized to 4.0 million tons, we are reducing our 2025 production and sales guidance. Strategically, given current weak market conditions, we are not going to force tons into the current oversold and underpriced spot market just for the sake of producing more coal. We continue to see supply contractions and mine closures in our domestic Central Appalachian markets, which we expect will impact both available supply and future pricing."

Guidance

Ramaco Resources updated its 2025 guidance, projecting production between 3.9 million and 4.3 million tons, down from previous expectations of 4.2 to 4.6 million tons. The company anticipates cash costs per ton sold to be $96 to $102. Capital expenditures are adjusted to $55 million to $65 million, reflecting a disciplined approach in the current market environment. The company has commitments for 3.7 million tons, exceeding 90% of the midpoint of production guidance.

Additional News

Ramaco Resources B has announced key changes in its leadership team and dividend policy. Michael Woloschuk has joined as Executive Vice President for Critical Minerals, bringing over 30 years of experience in the field. This strategic hire aligns with Ramaco's focus on developing its rare earth and critical mineral projects. Additionally, Ramaco declared a quarterly cash dividend of $0.1811 per share for Class B common stock, payable on June 13, 2025, to shareholders of record as of May 30, 2025. The dividend demonstrates the company's commitment to returning capital to shareholders amidst challenging market conditions, reflecting financial stability and shareholder value prioritization.