Enviva reports progress with new plants, capacity increases

By Erin Voegele | February 21, 2019

Enviva Partners LP has released fourth quarter 2018 financial results, reporting strong financial performance during the three-month period and indicating progress with the development of new pellet plants and production capacity increases.

“Despite the challenges in 2018 from the Chesapeake Incident and Hurricanes Florence and Michael, we closed the year strong, generating almost $34 million in adjusted EBITDA for the fourth quarter,” said John Keppler, chairman and CEO of Enviva. “With expansions underway inside the Partnership and tremendous development activities at the sponsor, our anticipated growth in 2019 will help us make material progress towards our goal of more than doubling the adjusted EBITDA of the Partnership over the next few years.”

During an investor call, Keppler said the company has made progress with the previously announced expansion of its pellet plants in Northampton County, North Carolina, and Southampton County, Virginia. Enviva plans to increase the aggregate production of the two facilities by approximately 400,000 metric tons per year. Keppler said work has now commenced on those expansions. According to the company, major pieces of equipment have bene ordered and detailed engineering is nearing completion. Enviva currently expects the expansion activities to be complete during the first half of 2020, with startup shortly after, subject to receiving necessary permits.

A pellet plant in Hamlet, North Carolina, is also nearing completion. That facility, with an annual capacity of approximately 600,000 metric tons per year is under development by the initial joint venture formed between affiliates of Enviva Partners’ sponsor and John Hancock Life Insurance Co. The facility is currently expected to be operational during the first half of this year.

A second joint venture between affiliates of Enviva Partners’ sponsor and John Hancock is also investing in the existing pellet plant located in Greenwood, South Carolina. Those investments are expected to increase production capacity at the plant from 500,000 metric tons per year to 600,000 metric tons per year, subject to the project receiving necessary permits. The second Hancock joint venture is also currently completing its final investment decision on a proposed deep-water marine terminal in Pascagoula, Mississippi, and wood pellet plant in Lucedale, Mississippi. The joint venture is also continuing to evaluate additional development locations, including sites in Epes, Alabama, and Taylorsville, Mississippi.

Keppler also noted the company’s sponsor is considering developments in other areas around the partnership’s terminals in Chesapeake, Virginia, and Wilmington, North Carolina.

Enviva Partners said it expects to have the opportunity to acquire these assets in the future from its sponsor and its joint venture with John Hancock.

For the fourth quarter of 2018, Enviva generated net revenue of $168.7 million, an increase of 4.8 percent when compared to the same period of 2017. Introduce in net revenue were product sales of $166 million on 874,000 metric tons of wood pellets sold during the quarter, compared to $156.1 million on 805,000 metric tons of wood pellets sold during the fourth quarter of 2017.

Net income for the quarter was $9.4 million, with adjusted net income of $13.6 million. For the fourth quarter of 2017, net income and adjusted net income were $7.9 million.

Adjusted EBITDA for the fourth quarter was $33.8 million, up from $31.9 million during the same period of last year.

For the full year, Enviva Partners reported net revenue of $573.7 million, up 5.6 percent from 2017. Included in net revenue were product sales of $564 million on a volume of 3 million metric tons of wood pellets, compared to $522.3 million on a volume of 2.7 million metric tons in 2017.

Full year net income and adjusted net income were $7 million and $21.5 million, respectively. For full-year 2017, net income and adjusted net income were $14.4 million.

Adjusted EBITDA for 2018 was $102.6 million, up from $102.4 million in 2017.