Enviva reports strong Q3 results
Enviva Partners LP released third quarter financial results on Nov. 4, reporting increased net revenue and adjusted EBITDA. Sales volumes were up 40 percent when compared to the same period of last year.
“Driven by our continued safe and stable operations, we are very pleased to report strong financial performance in line with our expectations for the quarter,” said John Keppler, chairman and CEO of Enviva. “We believe that the durability of our contracted cash flows, combined with the progress we are making on integrating the recently acquired Greenwood and Waycross production plants, and the processes and procedures we put in place to protect all our people and facilities against the ongoing impact of COVID-19, enabled us to stay firmly on track to deliver results within our full-year guidance range.”
During the quarter, Enviva continued commissioning activities related to the expansion of its wood pellet plant in Northampton, North Carolina. Commissioning of new equipment has also begun at the expansion project at the company’s Southampton, Virginia, plant. Enviva said it now expects the complete the installation of equipment associated with the Southampton expansion around the end of 2020. The company also noted that procurement and detailed engineering activities for the planned expansion of the Greenwood, South Carolina, facility to 600,000 metric tons per year are well underway and the expansion remains on track to be complete by the end of 2021, subject to receiving the necessary permits.
Enviva’s sponsor and joint venture are continuing to progress with the development of new pellet plants and marine terminals, the company said. At the Lucedale, Mississippi, pellet plant and the deep-water marine terminal in Pascagoula, Mississippi, Enviva said civil work, mechanical installation and construction is continuing. Construction on the two projects is expected to be complete in mid-2021. Development is also ongoing on a proposed wood pellet plant in Epes, Alabama. Enviva said its sponsor expects to complete the purchase of the project site and commence certain pre-construction activities this quarter. A final investment decision on the Epes plant is expected to be made near the end of 2020. In addition, evaluation is ongoing related to additional wood pellet plants in Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, and Mississippi.
For the third quarter, Enviva Partners generated net revenue of $255.6 million, up from $157.4 million during the same period of last year. The increase was primarily attributed to a 40 percent increase in metric tons sold.
Gross margin was $25.6 million for the third quarter, down from $26.5 million during the same period of last year. Adjusted gross margin was $56.8 million, compared to $41 million. Adjusted gross margin per metric ton was $50.13 on 1.133 million metric tons sold of the third quarter of this year, compared to an adjusted gross margin per metric tons of $50.56 on 811,000 metric tons sold for the same period of last year.
Net income was $1.4 million, compared to a net income of $8.9 million for the third quarter of last year. Adjusted net income was $11.2 million, down from $17.4 million. Adjusted EBITDA was $54.4 million, up from $39.4 million.