Enviva's net revenue for Q4 2022 was $239.3 million as compared to $276.3 million for Q4 2021 on a recast and non-recast basis. The decrease of approximately 13% year-over-year was primarily driven by the impact of the Deferred Gross Margin Transactions of approximately $175.0 million, partially offset by an increase in average sales price per ton as a result of annual price escalators in our contracts as well as the elevated pricing environment for biomass.
Gross margin was $5.6 million for Q4 2022 as compared to $21.2 million and $23.6 million for Q4 2021 on a recast and non-recast basis, respectively.
Adjusted gross margin was $36.3 million for Q4 2022 as compared to $73.3 million and $75.7 million for Q4 2021 on a recast and non-recast basis, respectively. The decrease was driven by the impact of the Deferred Gross Margin Transactions of approximately $88.9 million. As discussed previously, Enviva expects to report approximately half of the deferred gross margin in 2024, and half in 2025.
Adjusted gross margin per MT (“AGM/MT”) for Q4 2022 was $35.32, as compared to $54.57 and $56.32 for Q4 2021 on a recast and non-recast basis, respectively.
Net loss for Q4 2022 was $77.4 million as compared to $61.4 million and $34.0 million for 2021, on a recast and non-recast basis, respectively.
Adjusted EBITDA for Q4 2022 was $18.6 million as compared to $55.1 million and $68.0 million for Q4 2021 on a recast and non-recast basis, respectively.
Adjusted EBITDA for Q4 2022 was slightly muted as a result of extremely cold temperatures experienced by the U.S. Southeast during late December 2022. Enviva’s team prepared in advance to keep employees safe and limit operational disruption. During the multi-day period of once-in-a-decade freezing temperatures, production at several facilities was curtailed for up to a week. The aggregate financial impact to Enviva’s net income (loss) and adjusted EBITDA related to this weather event is estimated to have been approximately $4 million, which was predominantly driven by lost production.
“Achieving fourth-quarter and full-year 2022 adjusted EBITDA within our target ranges, prior to the Deferred Gross Margin Transactions, represents an important milestone for us as we exit our first year as a regular-way corporation, and we are now benefiting from the true cash generation power of our operations,” said Shai Even, CFO. “Enviva is a company with a robust backlog of fully contracted long-term revenues and a strong growth profile with a large and growing high-quality customer base around the globe. As we execute our growth strategy, we plan to prioritize leverage and coverage improvements while we complete our transformation into a fully self-funding growth company.”
Full-Year 2022 Financial Results
Net revenue for 2022 was $1.094 billion as compared to $1.042 billion for 2021 on both a recast and non-recast basis. Net revenue for 2022 was bolstered by the strong pricing environment during 2022.
Adjusted EBITDA for 2022 was $155.2 million as compared to $116.7 million and $226.1 million for 2021 on a recast and non-recast basis, respectively. Adjusted EBITDA for 2022 was below the midpoint of guidance range by $94.8 million, with the shortfall primarily driven by the decrease of $88.9 million, resulting from the Deferred Gross Margin Transactions.
Adjusted EBITDA for 2023 is projected to be within a range of $305 million to $335 million, which reaffirms previously provided preliminary outlook estimates. Similar to prior years, adjusted EBITDA is expected to be weighted towards the second half of the year, with approximately one third earned during the first half of 2023, and two thirds earned in the second half of 2023. Enviva’s quarterly income and cash flow are subject to seasonality and the mix of customer shipments made, which varies from period to period.
Enviva Inc. is the world’s largest producer of industrial wood pellets, a renewable and sustainable energy source produced by aggregating a natural resource, wood fiber, and processing it into a transportable form, wood pellets.
