Enviva releases Q3 results, continues to expand capacity

Enviva Inc. released third quarter financial results on Nov. 3, reporting in the company benefited from high wood pellet prices during the three-month period. Enviva also discussed the impacts of Hurricane Ian and announced progress with new capacity development.

Enviva reported $325.7 million in net revenue for the third quarter, compared to $237.8 million and $237.4 million for the same quarter of last year on a recast and non-recast basis, respectively. The 37 percent increase was driven primarily by an increase in average sales price per ton, as a result of annual price escalators in the company’s contracts as well as the elevated pricing environment for biomass. The company said it was able to help address dislocation in its customers’ and other producers’ supply chains during the third quarter, which enabled incremental deliveries at elevated spot prices.

Enviva also noted that net revenue for the quarter was dampened slightly given the timing shift of three shipments from September to October due to weather delays related to Hurricane Ian. Those delays also drove higher-than-average finished product inventory at the end of the period.

Adjusted gross margin was $75.4 million for third-quarter 2022 compared to $34.4 million and $56.7 million for third-quarter 2021 on a recast and non-recast basis, respectively. Adjusted gross margin per metric ton for third-quarter 2022 was $59.99, as compared to $29.36 and $48.38 for third-quarter 2021 on a recast and non-recast basis, respectively. Enviva primarily attributed these increases to higher pricing due to the same factors which benefited net revenue during the period.

Enviva announced progress with its goal to double production capacity from 6.2 million metric tons per year to approximately 13 million metric tons per year over the next four to five years. The Lucedale, Mississippi, plant continues to ramp up production and is on track to reach nameplate capacity of 750,000 metric tons per year by the end of 2022, according to the company. In July, construction began on a 1.1 million metric ton per year facility in Epes, Alabama. The Lucedale and Epes facilities are the first and second plants, respectively, under development as part of Enviva’s Pascagoula cluster. Plans are under way to develop a third plant in that cluster in Bond, Mississippi. That plant has a planned capacity of more than 1 million metric tons per year.

Enviva is also evaluating the timing of a fourth wood pellet production facility in the Pascagoula cluster. The company said it is continuing to analyze site location options and expects to make a decision near year-end. In addition, Enviva said it is in the process of evaluating sites Georgia and South Carolina for the development of a new facility in its Savannah cluster. Work is also continuing on the company’s efforts to expand capacity at several of its existing wood pellet plants.

A full copy of Enviva’s third quarter release is available on the company’s website.