Enviva Partners has reported its financial results for the second quarter 2018, and announced two major contracts in Europe and Japan.
The company has reported net second quarter revenue of $132.1 million, a 3.6% or $4.6 million increase year on year with the second quarter 2017.
Adjusted EBITDA for the second quarter of 2018 was $21.1 million, compared to $23.3 million for the corresponding quarter of 2017. Enviva claims that this drop was primarily attributable to business continuity costs associated with the ‘Chesapeake Incident’, net of insurance recoveries.
In February of this year a fire occurred at Enviva’s deep water export terminal at Chesapeake in Virginia. It resulted in the terminal being out of operation until late June.
Enviva has also announced a new 180,000 metric tonne per year take-or-pay off-take contract ‘with a major Japanese trading house’ to supply a new power plant in Japan. Set to commence in 2022, the new agreement is subject to certain conditions precedent, which the Partnership expects to be met in 2018.
In addition, Enviva has two new take-or-pay off-take contracts with Sumitomo Corporation to supply a total of 520,000 MTPY to new biomass plants in Japan.
“The Partnership and our sponsor now have long-term, contracted volumes of almost 1.5 million tons per year with high credit quality Japanese counterparties and continue to progress additional off-take contracts supplying the fast-growing Asian market,” said John Keppler, Chairman and Chief Executive Officer of Enviva.
“Long-term off-take contracts are expected to underpin substantial investment in new plant and port capacity that, together with the robust operational and production capabilities we demonstrated again this quarter, is the foundation for long-term cash flow growth.”
Meanwhile, in Europe, Enviva has extended its relationship with Drax. The pair have agreed a take-or-pay off-take contact that will see Enviva supply 650,000 MTPY of wood pellets from 2022 to 2026.
Drax is currently converting its coal-fired power station in Yorkshire to biomass, with three of its six generating units already switched to biomass and a fourth conversion under way.