May 5, 2022 By Canadian Biomass staff
Enviva has reported a net loss of $45.3 million and an adjusted EBITDA of $36.6 million for the first quarter of 2022, noting short-term challenges impacting produced volumes and logistics costs.
The U.S. wood pellet company also announced two new long-term agreements with German customers. The first is a memorandum of understanding for a 1-million metric tons per year, 10 to 15-year, take-or-pay fuel supply agreement to supply a new German utility.
The second is a letter of intent for a 100,000 tonnes per year, 10-year, take-or-pay fuel supply agreement with a new German customer that serves a new industrial use case for Enviva, the company said.
“As I have often said, although we have been insulated from so many of the logistics, supply chain, pandemic, and now geopolitical-related challenges facing the broader global economy, we are not immune. As we previewed during our last earnings call in March, the first quarter of 2022 likely was going to be a challenge for us, as our seasonally softest quarter was also impacted by dampened production due to Omicron-related absenteeism at our plants and labor-related and other pressures experienced by our rail and trucking providers,” said John Keppler, Enviva chairman and chief executive officer. “Although the effects were more impactful than we originally anticipated, we believe that the pandemic-related issues are largely behind us and are optimistic that the efforts that our logistics partners are making will soon put their challenges firmly in the rear-view mirror as well.”
Keppler continued, “Notwithstanding the short-term operational headwinds we’ve experienced, the growth opportunities in our business have never been stronger, and we are very pleased to announce today not only our first MOU with a large German power producer, but also an LOI to serve a completely new industrial vertical for us, and an agreement to develop incremental downstream infrastructure capabilities and accretive investment opportunities in partnership with a German logistics company.
I am also very encouraged by the durable margin expansion we are seeing from the constructive pricing environment for our long-term off-take contracts and by our fully contracted new capacity acceleration. As we look forward into 2023, we expect pricing strength and increased volumes to drive significant growth over 2022. Today, based on information we have available about our contracted volumes, pricing, and cost tower, we are forecasting an adjusted EBITDA range of $305 million to $335 million for 2023, with adjusted gross margin of approximately $50 per metric ton, a notably higher full-year expectation than we have guided to historically.”
Read the company’s full Q1 report here.
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