Enviva posts Q2 profit, helped by strong wood pellet sales

US-based wood pellet giant Enviva Partners has reported a second-quarter profit of $12 million (€10.70m), compared to $2.9 million the same period last year, helped by higher wood pellet sales.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) improved to $23.5 million in the second quarter of 2016, a 23% percent increase compared to the corresponding period in 2015.

The company reported that the increases in net income and adjusted EBITDA were driven by higher wood pellet sales volumes under our long-term, take-or-pay contracts, increased other revenue primarily derived from shipments purchased from and sold to third parties, and lower general and administrative expenses, partially offset by contract pricing mix.

The cost position of our delivered wood pellets, primarily driven by plant utilisation and raw material costs, was consistent between periods.

Enviva generated net revenue of $119.7 million, an increase of 9.2%, or $10.0 million, from the corresponding quarter of 2015. Included in net revenue was product sales of $116.2 million on volume of 620,000 tonnes of wood pellets.

Product sales increased from the corresponding quarter of last year due to higher wood pellet sales volumes as a result of shipment timing, partially offset by a higher percentage of “free on board” shipments, which exclude shipping from revenue and cost of goods sold.

Outlook for 2016

“Our strong operating and financial performance through the second quarter, coupled with our increased outlook for the remainder of 2016, put us solidly on the path toward our previously announced full-year distribution expectation of at least $2.10 per unit for 2016, excluding the impact of any potential drop-downs or other acquisitions,” said John Keppler, chairman and CEO.

He added: “In addition, our market position enabled us to capitalise on dislocations in the market this quarter and optimise deliveries to our growing customer base.”