Ramaco Resources, Inc. · NASDAQ:METC
Ramaco Resources — Q1 2022 Earnings Presentation
25 slides from Ramaco Resources's earnings presentation, May 2022
Slide 1: Ramaco Resources 1st Quarter 2022 Investor Presentation
May 2022 Ramaco Resources 1st Quarter 2022 Investor Presentation
Slide 2: Disclaimer
Disclaimer Forward Looking Statements: The information in this presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
Slide 3: Key Investment Highlights
KY RAMACO RESOURCES Key Investment Highlights 2
Slide 4: Ramaco overview
Ramaco overview Ramaco is a low-cost, “pure play” metallurgical coal company. We sell almost no coal to power plants, which are a source of greenhouse gas emissions. Instead, we are a key supplier to the North American and international steel industry. We have a strong pipeline of production growth
Slide 5: Investment highlights
Investment highlights Ramaco has built a low-cost met coal platform, with minimal AROs and legacy liabilities, a net cash position, a meaningful dividend, and one of the strongest growth pipelines in the industry. We generated record 2021 net income and already topped that figure in the first quarte
Slide 6: 1Q22 financial highlights
1Q22 financial highlights • Net income was $41 million (diluted EPS of $0.92) and Adjusted EBITDA was $64 million for the first quarter of 2022. Net income and Adjusted EBITDA were 123% and 103% higher than our previous respective quarterly records. • Furthermore, while we generated record full-year
Slide 7: Medium-term potential to more than double production
Medium-term potential to more than double production Ramaco annual production (in millions of tons) The Company now anticipates reaching its long-term goal of achieving at least 4 million ~5.0 tons of production for the full-year 2023, with further upside to 5 million tons of production in the med
Slide 8: Clear path to getting to ~5 mtpa of met production
Clear path to getting to ~5 mtpa of met production • The midpoint of 2022 production guidance of 3.25 million tons is up almost 50% from the 2.2 million tons produced in 2021. • Our 2022 capital expenditure budget includes meaningful growth capital for our Berwind Complex ramp up, as well as our rec
Slide 9: Low cash costs; Meaningful 2022 production growth
Low cash costs; Meaningful 2022 production growth Met coal cash costs ($/short ton FOB mine) (1) $110 $100 We managed to keep our costs $90 among the industry’s lowest in 2021, despite inflationary pressures, such $80 as higher sales-related costs. $70 $60 $50 $40 $30 Ramaco Peer 1 Peer 2 Peer 3 P
Slide 10: Ramaco has a best-in-class balance sheet
Ramaco has a best-in-class balance sheet Adjusted Net Debt (Cash) / EBITDA (1) 2.5x 2.0x Ramaco is in the strong position of having a “best in class”, 1.5x conservative balance sheet, with 1.0x 0.0x Adjusted net debt to EBITDA(1). 0.5x 0.0x (0.5x) Management is committed to Peer 1 Ramaco Peer 2
Slide 11: Operations + Met Coal Market Overview
Operations + Met Coal Market Overview 10
Slide 12: Met coal asset portfolio with competitive advantages
Met coal asset portfolio with competitive advantages Central Appalachian operations Elk Creek Berwind Knox Creek ─ 20+ year reserve life in relatively thick coal ─ 20+ year reserve life in relatively thick ─ Production at Mid Vol Big Creek mine seams at deep mines and attractive ratios at coal
Slide 13: Recently announced highlights
Recently announced highlights Initiation, Then Doubling Of Dividend, Along With More Comprehensive Capital Return Policy: Doubling Our Base Dividend: Ramaco recently announced that its Board of Directors (“Board”) approved a 100% increase in its initial regular quarterly dividend to $5.0 million
Slide 14: Metallurgical quality breakdown
Metallurgical quality breakdown Growth is focused to create a long-term, high value portfolio with over 75% of 2024 production expected to be higher quality Low Vol., Mid Vol., and High Vol. A coal. 2022 Production Outlook (1) 2024 Production Outlook (1) Steam 4% Mid-Vol Semi-Soft 3% 3% Steam High-V
Slide 15: Ramaco is a “pure-play” met coal producer
Ramaco is a “pure-play” met coal producer Met Coal As A % Of Total Production (1) 100% In fact, many of Ramaco’s U.S. “met 90% 80% coal” peers actually produce more 70% thermal coal than met coal. Ramaco is 60% one of only two U.S. publicly traded 50% “pure-play” met coal companies. 40% 30% 20% 10
Slide 16: U.S. met coal spot prices up >175% from this time last year
U.S. met coal spot prices up >175% from this time last year U.S. Met Coal Spot Price (1) As of May 10, 2022, U.S. High Vol A $500 met coal spot prices have risen $400 >175% YoY, mainly on the back of increased global economic activity, $300 in part due to large global economic $200 stimulus, coupl
Slide 17: Domestic steel market remains well above historical averages
Domestic steel market remains well above historical averages U.S. Steel Prices (1) As of May 10, 2022, despite a recent $2,500 decline from peak levels, U.S. hot $2,000 rolled steel prices are at $1,400 per ton, which is over 50% above the 4- $1,500 year average. This is on the back of $1,000 stro
Slide 18: Supply rationalization accelerates
Supply rationalization accelerates Supply underinvestment and lack of funding continues, and is likely to get worse: Met coal capex is estimated to have fallen over 75% below peak 2012 levels in 2021. Overall global mining capex is estimated to have fallen Global Met Coal Capex (1) almost 60% belo
Slide 19: Safety, Environmental, and ESG Commitment
Safety, Environmental, and ESG Commitment 18
Slide 20: Strong ESG commitment
Strong ESG commitment ESG principles are core to our strategy. We produce no meaningful amount of thermal coal, which is used in electricity generation. Almost all of our coal last year was ultimately used to produce primary steel, which is a crucial component of the 2021 bipartisan Infrastructure B
Slide 21: Environmental, Health & Safety
Environmental, Health & Safety • 2021 was the company’s safest year on record. • Ramaco is committed to complying with both regulatory as well as its own high standards for environmental and employee health and safety requirements. Ramaco believes that all accidents and occupational 2021 was Ramaco’
Slide 22: Appendix
KY RAMACO RESOURCES Appendix 21
Slide 23: 2022 Guidance
2022 Guidance (In thousands, except per ton amounts and percentages) 2022 Guidance 2021 Company Production (tons) Elk Creek Mining Complex 2,050 - 2,150 1,981 Berwind Mining Complex 700 - 800 181 Knox Creek Mining Complex (a) 350 - 450 62 Total 3,100 - 3,400 2,224 Sales Mix (b) Metallurgical 3,000 -
Slide 24: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We believe Adjusted EBITDA is useful because it allows us to more
Slide 25: Ramaco Resources, Inc.
Ramaco Resources, Inc. 250 West Main Street, Suite 1800 Lexington, Kentucky 40507 INVESTOR RELATIONS: info@ramacocoal.com 859-244-7455