Ramaco Resources Q3 2026 Earnings: Higher Sales Could Not Offset Margin Pressure

Ramaco Resources (NASDAQ: METC, METCB) reported Q3 2026 revenue of $150.1 million, up 24% from $121.0 million a year earlier, while Class A diluted EPS was a loss of $0.32 versus a loss of $0.25. Higher coal sales from inventory reductions lifted revenue, but rising cash costs and continued rare earth and critical minerals spending reduced adjusted EBITDA to $3.0 million and widened the net loss to $18.2 million.

Core Earnings Data

Coal sales volume increased 23% to 1.077 million tons even as production declined 10% to 851,000 tons. The difference reflected Ramaco’s decision to reduce stockpiled inventory, while non-GAAP revenue per ton remained unchanged at $120.

Profitability moved in the opposite direction. Cost of sales increased 31% to $133.8 million, outpacing revenue growth, and operating loss widened to $21.1 million from $14.5 million. Higher diesel costs contributed to a 7% increase in cash cost per ton, while selling, general and administrative expense rose to $19.3 million from $16.1 million.

Adjusted EBITDA and the per-ton figures are non-GAAP measures. The per-ton measures are calculated on an FOB mine basis and exclude transportation and idle or other costs.

Business and Segment Performance

Metallurgical Coal

Metallurgical coal generated adjusted EBITDA of $8.9 million, down from $12.1 million a year earlier. Production fell because Ramaco idled higher-cost operations and maintained production discipline in the weak high-volatility coal market. Sales nevertheless increased as the company reduced inventory accumulated earlier in the year.

At September 30, Ramaco had approximately 900,000 tons of clean and clean-equivalent coal in inventory, down from a first-quarter peak of 1.1 million tons but still more than 600,000 tons above its normal level. Management began selling that inventory into higher-priced spot markets, which could release working capital as the coal is converted into cash.

Ramaco had 4.2 million tons committed for 2026, including purchased coal. Of that amount, 3.4 million tons were fixed at an average price of $120 per ton, while another 800,000 tons were tied to market indices and had not yet been priced.

The company has also signed 1.7 million tons of domestic business for 2027 at an average fixed price of $139 per ton, compared with 1.3 million domestic tons at $137 per ton for 2026. Together with 1.1 million tons of export commitments, Ramaco had 2.8 million tons committed for 2027 before issuing formal guidance.

Ramaco expects new sections at Berwind and Maben to enter production before the end of 2026, adding approximately 600,000 annualized tons of low-volatility coal capacity. Including the Laurel Fork restart, the company said it will have added almost 1 million annualized tons of low-volatility production during the year. A new Maben rail loadout, scheduled for January 2027, is expected to reduce trucking costs at that complex by about $20 per ton.

Rare Earths and Critical Minerals

The rare earth and critical minerals segment did not report revenue and recorded an adjusted EBITDA loss of $5.9 million, compared with a $3.8 million loss a year earlier. That development spending offset a substantial portion of the metallurgical coal segment’s earnings.

Third-party carbochlorination tests produced average recoveries of 97% for combined scandium, gallium and germanium; 92% for NdPr; 96% for yttrium; and 97% for dysprosium and terbium. These results relate to process testing and do not establish commercial-scale economics.

Ramaco expects an initial Brook Project technical report in Q1 2027. Its pre-feasibility study is scheduled to begin in Q1 2027 and finish in the second half of the year, while completion of the pilot plant is also targeted for the second half, subject to procurement and fabrication timelines.

Higher Volume Did Not Produce Operating Leverage

The central issue in Q3 was the gap between sales growth and profitability. Selling more coal increased reported revenue, but the realized non-GAAP price remained flat year over year at $120 per ton. Meanwhile, cash cost rose to $104 per ton, reducing the cash margin to $16 from $23.

The cost pressure extended beyond mining expenses. Consolidated SG&A increased, including $5.9 million attributed to the rare earth and critical minerals segment. As a result, higher coal volume did not translate into better consolidated earnings: adjusted EBITDA fell 64%, and the operating and net losses both widened.

This means the benefit of future inventory sales will depend not only on volume but also on commodity pricing and cost control. Ramaco reported that U.S. spot prices had risen above the third-quarter average, but the company also raised its full-year cash-cost guidance because of external inflation.

Profitability, Cash Flow, and Balance Sheet

Ramaco ended the quarter with $374.7 million of liquidity, up 38% year over year. That consisted of approximately $233.0 million in cash and $141.7 million available under its revolving credit facility, with no revolver borrowings outstanding. Long-term debt was $453.6 million.

Cash flow information was provided on a nine-month basis. Ramaco used $34.4 million of operating cash during the first nine months of 2026, compared with generating $20.3 million in the same period of 2025. Nine-month cash capital expenditures increased to $80.0 million from $52.1 million, while Q3 capital expenditures more than doubled to $35.5 million as work accelerated at Berwind and Maben.

The nine-month cash flow statement also included $65.9 million used to purchase treasury shares. Combined with operating cash usage and capital spending, this contributed to cash declining from $440.3 million at the end of 2025 to $233.0 million at September 30, 2026.

Separately, Ramaco received a favorable $30 million jury verdict related to the 2018 Elk Creek coal storage silo failure. The final award remains subject to post-trial motions, and any attorneys’ fee award will be determined by the court, so the verdict should not yet be treated as realized cash.

2026 Guidance

Ramaco lowered and narrowed its production and sales ranges while raising its cash-cost and capital-spending guidance. The changes reflect continued production discipline in high-volatility coal, external cost inflation and the accelerated start of the first underground section at Maben.

Ramaco attributed the cost increase partly to diesel prices of $5.85 per gallon, up from $2.50 at the beginning of the year, and rebar prices of $952 per ton, compared with $910. Higher capital spending reflects the Maben underground section beginning operations in Q4 2026 rather than Q1 2027 as previously planned. The company continued to expect a fourth-quarter working-capital benefit from inventory sales and planned to release initial 2027 guidance after its December board meeting.

Investor Risks to Watch

• Operating-cost inflation: Diesel and steel inflation has already pushed cash costs and full-year cost guidance higher. Additional increases could limit the benefit from improved coal pricing.
• Coal prices and inventory conversion: Ramaco’s planned working-capital benefit depends on selling elevated inventory into favorable markets. Lower spot prices could reduce both margins and the cash released from those sales.
• Capital spending and project execution: Cash capital expenditures are rising as Berwind and Maben expand. Delays at the mines or the Maben rail loadout could postpone expected production and logistics benefits while cash spending continues.
• Critical minerals remain in development: The segment is generating expenses without reported revenue. The pre-feasibility study, technical report and pilot plant remain subject to testing, engineering, procurement and fabrication timelines.

Summary

Ramaco’s Q3 2026 revenue growth came primarily from selling more coal out of inventory rather than higher year-over-year unit pricing. Rising mining costs and critical minerals spending compressed cash margins, reduced adjusted EBITDA and widened the net loss. The main factors to monitor are inventory conversion, diesel-driven cost pressure, execution of the low-volatility coal expansion and the company’s initial 2027 guidance, while the critical minerals business remains a longer-term development project.