Enviva Inc., a leading producer of sustainable wood pellets and other renewable biomass energy products, reported its financial and operating results for the first quarter of 2023.
Delivered volumes for the quarter totaled approximately 1.3 million metric tons, representing a 20% increase from the same period in 2022, but were short of the management's expectations of approximately 1.5 million metric tons. The cost per metric ton delivered at port decreased by $9 throughout the first quarter, but remained higher than the management's expectations.
Enviva reported a net loss of $116.9 million for the quarter, as compared to a net loss of $45.3 million for the same period in 2022. The adjusted EBITDA for the first quarter of 2023 was $3.4 million, down from $36.6 million for the same period in the previous year.
In light of the weaker-than-expected first-quarter results, Enviva updated certain full-year 2023 guidance metrics, including revising the net loss to a range of $186 million to $136 million and adjusted EBITDA to a range of $200 million to $250 million. The company also changed its capital allocation priorities to direct cash flows from the business to the highest-returning opportunities, including effectively managing liquidity and leverage, improving operating cost and productivity, returning capital to shareholders through share repurchases, and accelerating investments in new fully contracted wood pellet production assets when appropriate.
Enviva announced a 10-year take-or-pay off-take contract with an existing Japanese counterparty for deliveries of approximately 300,000 metric tons per year. The contract reflects a favorable long-term pricing environment for wood pellets, and deliveries are expected to commence in tandem with new capacity coming online.
"We know what the specific issues are: contract labor is too high, discipline around repairs and maintenance spend is insufficient, wood input costs need to come down further and stay there, and utilization rates at specific plants need to improve and stabilize at those improved levels," - said Thomas Meth, President and CEO of Enviva.
