Enviva (EVVAQ) 1 Mar 222021 Q4 Earnings call transcript

Good morning. And welcome to Enviva Inc.'s Fourth Quarter and Full Year 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kate Walsh, Vice President of Investor Relations. ahead. go Please

morning, quarter Good welcome Enviva to Thank full everyone. year fourth and call. XXXX Inc.'s you. And earnings conference

excited you Shai Vice have for John first Even, our participation. On today Executive interest to Chairman call, as your our are we morning's in thank Inc. your and CFO. and earnings and President company, Keppler, and this Enviva, appreciate We call host CEO, and

update financial be open will Shai John our results and and outlook for an for up questions. will our agenda Our to operations. provide and on call we business current discuss Then the

statements those During no from uncertainties forward-looking as release filings. the as subsequent materially statements, that be can our to actual changed statements results obligations our update could course concerning variety reflect Q&A making subject We our in are Information found other be a earnings cause in to forward-looking our events will the or remarks differ in to which SEC assume of new to circumstances. of and our session, risks and or well risks. we forward-looking the any

financial important It results October GAAP. required transaction and were measures note discussing simplification In with GAAP, be most accordance XX, our is the concerning release. in non-GAAP addition to GAAP results and other these reporting measures as comparable to adjusted recast as to pertaining accordance historical their we EBITDA directly our presenting earnings certain a included also will to forecast. Information completed relevant to XXXX, we are on our of with non-GAAP periods measures as financial well our reconciliations that of disclosures announced we the in result in

with Form now I operating are over Enviva's Our investors the We like and a historical XX-K. information release With call presented believe our and non-recast that, to would basis performance. historical to turn results financial basis non-recast provides the and in relevant of evaluate John. our earnings presentation financial recast to results on

for joining you, Thank Kate. Good today. everyone. us thanks And morning,

on conversion Kate call October steps our XXXX today XX, on truly an to of unlock us, December a which subsequent These milestone we we completed continue an And to us, a our As a for from Enviva simplification way Inc. believe successful for incredible of and were partnership catalyst initial first a was completion year that closed for part large reasons. master-limited an we the earnings a shareholder marks was important transformational transaction, regular mentioned, our essential value how which year. of we XX. will number to corporation, as

First, our the equity to to corporate we at income expect tax, structured least pay through XXXX. to C-Corp non-taxable a be to minimal and any, was holders, if conversion

rights. our incentive Second, distribution we eliminated

our of our a look in is for XX profile. just for to We refiner hundred J-POWER with counterparts, a agreement new brought MOU sheet, makes for supply a to Third, to has a two to outlook US-based of tons utility per and we what European last is designed in a with metric dividend entirely we chain growth existing that customer which primary our XXX,XXX This by an side up year, lowered important contract weeks meaningful producer in we and possible. at last significantly time. oversubscribed additional model an MOU a tons have and develop to six put Southeast all six the deliveries we months, substantially of preserving ramp over Drax that anticipate Fourth, we completed California, when base see we us when the US balance shipments European will of X.X business, use maintaining an of tremendous an that grow demand tons MOU to year; biomass and year, case structure industrial fuels, for our that million capital. a we and ourselves the ago guidance announced being per equity a metric and year conservative tons in metric we cost the per million And agreements, a issuance of RWE. fifth, you with global growth XXXX while a investor potential as aviation our moved X beyond, broadest approximately this path several with thousand described to offering, accomplished having and sustainable the lead investable because core ultimately the could several growth self you our on sustainable funded to aviation fully have annual fuels

building January, accelerating, similarly our As to years, six over X next the plants the plans opportunity a attractive accelerate five multiple double we gives very outlined adjusted each us of in by times project size of demand is new at which the EBITDA. investment to company our approximately

plateau this the multiple reduction we which historically path and at you X.X costs, in see acquired what assets roughly that. doubling the transition world's sales our a would growth represent focus With to sponsor. continued capacity a given to our our times will dramatic on in there. after again decarbonization, recall, continues doesn't And energy from from deep emerge we our pipeline, As down the outlook former from

the XXXX business put we same better, that opportunity XXXX now are taken have excited we even our beyond corporate structure, in and for and how and like. simpler great an about pretty looks it So closed what

XXXX EBITDA beginning range in will we results us. transaction. dividend the adjusted guidance ranges year full a delivered behind As fourth non-recast expectations, full was line infectious with guidance, XXXX we our seen On outlined DCF and was, EBITDA and may in year release, financial announced million, how net and we this few of expectations with spend million income million, the line in But were foundation, the business. quarter a adjusted Omicron, have and be non-recast the basis, up, moment of our we the that, our are when you a challenging headlines us range and that year use through to are reaffirming XXXX. we $XXX while to in and a full measures in the is given minutes that variant $X.XX performance financial per GAAP about in the million and AGM increase of walking help $XX $XXX a investors talk on in results non-GAAP to understand Shai metrics including to over $XX share, thankfully XX% our

the on fact, compared we growth seasonally year over shape XXX. during materially lot these top yield quartile QX, a are XXth a S&P, like half yield back over share based With headed, with on the growth S&P as years, our softest our profile on at also to to first XXXX our in is percentile dividend in our quarter. dividend per Based the XXX. of is the where comparable Shai We of EBITDA price, the to up the big shakes view results share, adjusted QX look half a X% our peers prior expect up the S&P our higher high than and of XXth the approximately step out will current the year well. CapEx full for curve rate the provide of investment a of step that the percentile and our declared our and how $X.XX year recently

customer nature also in has backlog, adjusted contracted So but in capacity expansions build organic given a we are sales $XXX cycle that able growth cash one large very each top fully pipeline, fully a our matter payer, plant, the unmatched months. annual generate terms cost for EBITDA. our a contracted revenue XX of And million construct of the growing virtually million, and proud capacity flow rare ramped we're to fully approximately company of growth especially the and and were of which being tier several million plant incremental attributes, combination of in highly and $XX dividend ahead, fully quick because and between of business contracted critical our top the to a $XXX tier our when plans, our visible is

we annual the the substantial self business growing create funded at There and company will believe model, as shareholders of profile continue us. low another us isn't there enable return execute flow value very time. we to cash on over out maintenance growth cost our the our to like facilities, Given to continue to truly

growth trading have regular globe whether to that pure-play and in cash as with plans. now asset Now through we on the introduce many of ahead I'll unique or continuing Enviva and we market forward more discuss passively becoming we our over in directly developments across financial share accretion back to But that's the the us, unmatched like to for step in our an profile, to participate investing one it moment eligible. growth flow to capacity highlights. come change details are opportunity through turn to look are ESG the investors to Inc. Shai corporation, indices to we of which a I'd and way, a

Thank you, John. And good morning, everyone.

on Form XX-K. in we As and our and non-recast Kate our a our beginning, highlighted historical recast financial the press are basis results at earnings presenting release

evaluate provides as Enviva's the will non-recast non-recast and of we investors we on For figures my focus of the figures purposes our and financials relevant the time operating remainder information recast with then today, presentation to discussion discuss the performance. believe

basis. of First, the on $XXX fourth non-recast was quarter and recast XXXX. to We quarter flat million generated the of XXXX, a revenue which fourth for compared of net relatively

the of and COVID-XX, of quarter with availability, sales. During level, produced the absenteeism fourth variant reduced labor associated lower Omicron dampened related XXXX, plant plant volumes which

our logistic led continued logistics to which partners production experience to curtailed challenges, and certain in labor of several higher Additionally, chain related costs situations. supply

We suppliers to forward. into continued of of our have recover half operations January to of we part impacts with number February. to begin necessary the logistics But of during the the to These ensure seen February. partner service level are early we the expected latter level persist Omicron-related and expanding going

XXXX increased which generating $X structure XXXX XXXX, year loss for was compared year assumes On XXXX, that Net to the primarily year net excess recast higher important for a at Enviva led in former of full full the net full an of $XXX.X XX% by while sales basis, occurred in quarter the as XXXX, reached transaction For loss billion driven revenue. net million. million, sponsor our volume. of milestone, revenue inception was $XX.X fourth simplification of by

XXXX, revolving million. our December liquidity a cash our of XX, net which as million $XXX equity hand proceeds from included availability on and January XX. on $XXX offering our liquidity cash credit to with was added facility, under Our We

basis. non-recast a to turning Now

million XXXX. absorb we the include and business development, $XXX of achieved of increase million for million of to was cash part driven fourth compared full quarter an assumed million, quarter cash for the by the XXXX. cash Enviva margin metric as for transaction, gross Adjusted ton As XX% fourth $XX adjusted $XX for per generated, gross simplification additional year to driven in higher by quarter of from previously the achieved achieved asset fourth per the XXXX, million a growth all the XXXX. XXXX, was EBITDA $XXX represent XXXX. increase discussed, ton corporate of the compared pricing EBITDA, flow On to the corresponding simplification results The full XXXX. ton Similar metric per increase former quarter of metric XX, with was per primarily on increase year XXXX the non-recast flat being full of driven in quarter approximately functions The Adjusted ton year-over-year as higher of gross for in EBITDA at Enviva metric and corporate to primarily growth fourth of for due fourth customer for XXXX was was $XXX level. sales to generated October year margin adjusted primarily an quarter higher expenses as sales XXXX. mix. as relatively million held distributable basis year relatively XXXX, the to XXXX. of SG&A of million sustainability $XX, for per part gross as compared $XX to we and conversion full $XX.XX, fourth announcement adjusted volume SG&A for approximately XXXX of higher for year of as XXXX. We year-over-year. expenses, compared $XX by for year north XXXX XXXX, these sponsor XXXX. strong full X% and $XX.XX to margin which The than year to target accounting volume. be of margin of of Enviva for Distributable $XX Enviva the quarter full XXXX Distributable pleased ton was flow XXXX, year million after year are annual flat was around that adjusted in full full metric XX% $XXX as $XX compared for adjusted the development, full reported flow million XXXX the

Our for dividend of subject it basis dividend dividend reinvestment coverage we of cash transaction a factoring simplification ratio X.X X time. the not the cash are on coverage ratio fourth on XXXX basis, a to means quarter was refer are as that to million shares issued the part When in the we being program. the

expenditures a cash fund plant capital generated the self-funding now timing dependent conservatively flow unchanged. from the to is Enviva's commitment X we new transitioning with model increasingly And to Our growth with organic expect to We over for business. construction. years, managing projects balance the of on next cadence sheet fully future growth are

dividend is have long-term an to dividends annual target ratio basis. coverage over expect times on increase financial the we X.X And flexibility Our time. cash to

We conservative continue to target pursuant ratio X leverage times, calculated as X.X agreement. to to credit our of a

expected us calculation outlay. by Our increase adjusted component construction under relatively for the material allow to the projects the flows to cash cash credit agreement associated leverage EBITDA

As and our made, to period is guidance. cash John full pointed important income to year out, mix shipments quarterly subject seasonality vary of period. that note are the customer we and which Enviva's flows XXXX from to reaffirmed It

first colder higher wetter to as of plant. the winter our quarter procurement and modestly seasonality business and year compared weather as Our usually quarters, cost the subsequent at production increases experience during of

cash We to of we half to year. second similar years, for XXXX. And in expect flow the higher first half net income, this be the distributable the significantly the again be EBITDA case to previous expect and adjusted than

of while be around the We half earning, thirds will of one the drive two half the first second are third. forecasting that our will roughly year

Lucedale Another the nameplate year. plant, production reach expect increased course, key ramp the from driver we end the of of and the by capacity this profile to is, which production of

guidance our expanded capital also for providing metrics We XXXX. by expenditure guidance

CapEx of XXXX, $XXX during site the to of guidance to spend to highly the allocated dedicated construction balance expenditures weighted projects. expected XX% to to is XX% XXXX for Total million, the around the and be north total are spend Our of accretive CapEx allocated to maintenance ended million development of range greenfield with project, with expansion to $XXX and capital half for XXXX. scheduled be incurred XX% back second X%

expect takeaway XX% EBITDA to The and adjusted important from our guidance by is full much at of compare income we flow net increase by another unlock. we XX% when a and this cash believe that durable year And increase profile increase XXXX isn't rate. yet similar value just over to for growing shareholder distributable significantly visible, to have There XXXX. we with company cash more flows we to to

Now to I John. to it would back like turn

Thanks, Shai.

a to in lot lot to forward execute. We XXXX and to a have look

with increase is in where revenue We backlog were over at last from revenue XX% of by complemented This which year. customer are is this sales a contracted contracted entering a $XX this backlog time excess billion, are we a of over achieving. pipeline diversity to increased which $XX and testament It's case to last decarbonization of doubled geographic customer and very strength more tailwinds. we billion, is the exciting and velocity the has than use year the see global year a

industrial it You'll would the remember contract announced of our many. said in we first be that first when November, we

That industrial when total that's truly is represents you year power our for announced continued see XXX,XXX including no exponential industrial to agreement, heat is meant addressable decarbonizing growth in industries lime, chemicals this for ton exactly what have we contracts of Given the growth steel, markets cement, and the us transpiring. in way the traditional metric discount morning's The calculate since, fuels. like we potential per market generation. and

magnitude equivalent to million our power by With we contracted XX% with metric would heat delivery tangible the these to the notably annual and the us announced obligations in front of of the in which Drax year and require growing potential opportunities close of have enhanced agreements today, us. RWE, MOU capacity speaks recently the with Asia, per ton of production our add X J-POWER, and to existing position

course, didn't geopolitical the in Of markets discussion be and if environment current would we remiss overlay. opportunity of we our macroeconomic and address

at in our heat large-scale several carbon described producers generation member spot taxonomy the made biomass and on gas have we power This incenting several controversially prices decarbonization. conversions EU to As major durable year, expensive for fossil to biomass. of more in and the and the EU in to last of the generation, plans included of Germany means fuels of accelerate end EU the as somewhat green further Poland, dependency calls, high And transitional prices, high combination forward replace especially relented and both ETS nations, profitable the of was to power biomass last due has use than a conventional and and gas volatile and coal. expectations

the thus, uncertainty even is associated bolstered. to will I heat conclude more well role recent create it substantial to biomass supply with to believe continue $XX power decarbonization industries. of customer events now reasonable our challenges that Europe, the And play will Given an the that as further which and across in gas be pipeline, as billion, and hard is over sectors, abate even

Given expanding profile, terminalling demand we aggressively contracted and our robust growing position are production our capacity. and also

terminalling terminal. with and XX% of begun acquired have increased we plant at and capacity Pascagoula XXXX, deepwater acquisition During the our underway. we the Lucedale the by commissioning marine deliveries XX% capacity plant when Wood the expanded our Lucedale production is of by

from capacity XXXX. during nameplate to the commence second throughout XXXX, Pascagoula ramp will first production of to Lucedale's shipments expect quarter We with

largest our in next XXXX, half planning Epes will million designed first contracted the wood cluster, cluster's on and of world. and plants the and plant. to pellet year two begin and Alabama. Epes in permitted Epes, the fully X.X tons first are be large-scale plans also plant in the plant underway Lucedale growing for to produce the is third Pascagoula construction metric are per industrial we're During production our

to One generate add cluster we of we the Pascagoula terminal at increase and our we the very our plants leverage copy out model. building and have returns expect terminal operating to new attractive and as is build the enhanced this using throughput aspects

decision add a to lot million double third our fourth fond make metric Savannah, Wilmington We per metric of mid-year. expect just a a work our to. a forward XX X.X to And capacity then our of really from end and started. our path million is for to additions and around Pascagoula our tons per the as site cluster On to saying, to tons we on I'm of plant the our of cluster XXXX, to Chesapeake clusters, us, Pascagoula year look plant to year by over but consider lot getting ahead are plan

we I Enviva last months open the up XX stakeholders. made to Before recap for team call transformative for the what our for and want questions, our to has

and acquisition plant the the terminal, simultaneous completed sizable we successful Pascagoula of First, offering. Lucedale for equity the

we with Mid-Atlantic expansions. our completed significant our made Second, progress and expansions Greenwood and multi-plant

million which the our acquisitions. last our our our offering from funding primary completed successful equity in portion equity to transaction pre-fund be growth. upcoming revolver a our increases our and corporation. million, growth, conversion simplification Fourth, $XXX completed could we another flexibility we we Fifth, of Third, expanded financial to to which $XXX capacity

we our related are industrial three power generation signed ever agreements, signed MOU. we And far by sustainable fuel. two largest our aviation of first Finally, which to

me a done asked to much champion Enviva I come. The job has short achievable so accomplishing ago, month I'm the And span. tremendous confident in change within was XX would these strides. progress have our will year in a believed step a the not team growth remarkable If you team years

The cost exactly We we are able our and effectively. carbon want define relatively that's offer. to be more fortunate what to to more And simple terms. continues company in less quickly world

superior scale, a We benefits climate build are stakeholders. the and and our returns delivers today safely while at sustainably generating consistently, continue incredibly privileged to for to all platform that unique to have opportunity change of a company real

open call let's Now questions. up for the

first [Operator with Mackay Thank John you. Instructions] Our go comes ahead. Sachs. question from Goldman Please

I and utility wanted maybe morning. start good in power the for Europe, Hey, in general and market. to Thanks kind of time.

we've of regulatory contracts? to compared subsidies. that we seen, certainly Thanks. be As we contracts you still move before money see formal Is waiting the announcement pellets forward kind without gas enough to or a as see of mentioned, incremental start coal those are of some in and kind can long-term should to to even more

you. time us morning. Really the appreciate this with thank spent John,

those to do I really that the generators is answer able leverage that conversion some think have that the that and they undertaken right. see are both, you made of more, strategies, question actually to to What already right. is that, across continue investments frankly,

from really and focused and and the efforts for heat full across transition think And structured Germany scale that counterparts, and to customers at we a make do that's some look you of utility I the are utilization is make likely both flavors, biomass EU then on incenting really basis energy see reflection profitable and relative convert both forward utilization a power-generating Europe the power curves, like environment of announced agreements structured carbon, you runway places to large a on you that's and both thinking from biomass. they're the our when that biomass, of possible look continue. in continued about how to the very fuels recent if profitable talking investments of combined the fossil really terms the we've assets. We're further places co-firing that seeing on sector also of constructive about, of combined to with in ETS that other to So at with or that's utility ability money how Continental conventional some conversions generation. existing Poland to just And of support

conventional on the generally So benefits a our energy and little bit tailwinds from from, environment that of both quite with both, we're constructive the carbon. but industry pleased obviously,

following that. for Thanks Okay. up. Maybe

be. the talked of a the demand market, growing size about could guys big You how lot have

are. also these how You've returns on plants your about some talked strong incremental of

you Just versus bit not and little maybe you whether in Because some think I'm a Thank you. like that you talk there? or competitive a context, curious kind seeing opportunity how of environment pretty set guys you're it others? pressure capture looks could big much about so can the

another Yeah. business chain the opportunity strengthening with supply. continues the really market especially continued What exponential be frankly, look pricing that continue as and environment supply truly John, mobilization you're at across in needed. limiting demand a what whole if total remains and short good with associated of right, chemicals, will into frankly generation to industries, constructive power you question. that demand increases to space, that a market it like again, And you - we've see by we've beyond just abate the we've And It's supply really to really, energy I is. the for seen. And keep to addressable sort of things just as situation in looking this when across lime, transition fuels. heat business. be further is really growth broad, set when you're That continues to cement, and not exacerbated difficult the that's the side been pace long our the think to structurally investments

to beneficial for times exciting very liquidity, us the more all. really really, think But again, I market so actually the us. be physical supply additional So would into

business, of make that ultimately this remarkable market the continue continued we're certainly, big us. for cost we is that build should many that and better addressable sort than and plans that And to have grow announced the semi-liquid today. and that But so drive business folks growth really it boy, see our business of hopeful down

Okay. Thanks ton. a

Pavel question with Raymond comes go next Molchanov from Please James. ahead. Our

Thanks for Europe beyond supply Since existing your authorities customers the quantities, anything or the have of any in normal on requests war emergency kind delivery I you for will either from received any question. focus government begin, Europe? taking or as well.

we responding for I need tragedy requests Ukraine that and a to obviously Well, have naturally, our be that mindful Pavel, and to the into I for to there With resolution. human thanks there's demand. certainly, peaceful right that, been we're delivery think mean, hoping now, Europe, regards quick ongoing incremental for question. a in

position a is our in short participate seen going to that have from And procuring. other Russia. no that they counterparties that Europe might or are of commodities commodities been You've relative number the obviously described to conventional they longer creates in does procurement what major of that a

about we're But was so we help minute of and online can contracts, short is and unfortunately Ukraine. of in today that accelerating nature January can we what to why are - take the accelerated demand really our just raise, that capacity I course, as the shared a overall given build. And again, obviously them ago. equity working investment to limits to in of just sooner structural serve we There profile, by reinforced current bilateral as see is we've the advantage we've reason part we talked mentioning bringing certainly, That, our conditions before, the that of opportunity do. our of generally with in terms and

a coal talked hard a to from lot question - coal adopt was of was And pellets to? utility of to from course, that, of about Germany slow before is can you kind specifically then coalition phase-out government Russia point close historically. a new the Any XXXX. to German context, but same accelerate the the market its aiming that even substitute. somewhat trying movement as we've now rather being Germany buying coal see we that of to in half And broader But

think its transitionary that. decarbonize. although And gas had certainly, Well, around and a yes given taxonomy Pavel, to to speculative EU think, of the do limitations green some I inclusion going Ukrainian right. I was crisis is a yes, the been the part that approach answer means more wasn't of gas to before place the of now, to Germany's The the and so even as that so important, plan

the I as and draw perhaps even in that think current environment, strategy. a have unachievable you perhaps riskier to

complements very Obviously, obviously had continent Poland, utility the move the in had a industrial of part number of their industrial focused percentage The utility right what play, acceleration industrial we fossils in system in and on moving gas generators of competitiveness noise both the from of that would relative set seen see been set in there the part I across our underlying to more biomass that the was had as I certainly of to the the so of heat Many that which role manufacturing. really business, going displacement customers contracting smaller today. the Germany where aggressively. to power opportunity aggressively. And set, lot - right. is our continues cost and whatever think now. and played is we And say, a But

I see you got government's conviction biomass, we competitiveness firm of continental and the get the around driven every to and part European current by what decarbonization. one cost through environment. contracted approach as the the nations German both sustainable demand the market, biomass is materializing think a being to critical in of as But member EU certainly well

is? and you Russia. amount between there Do imports Russia market the know are some in wood trade you do of how lastly, big And pellets European what that So Okay. the specifically? from know coming

metric I million in supply very think the is chain. it's million fragmented year, it but to of a X X tons neighborhood per

more somewhat see And you world. think, in so that different durable structured I obviously, the it the is than opportunistic jurisdictions supply from

Thank very much. you Okay.

Pavel. Good to talk you, to

Ryan ahead. Levine go question Please comes from with Citi. next Our

Good morning.

would be you build contracts? growth pellet willing to demand to securing plants Enviva's associated Given in the incremental business, prior industry

the and is growth we one months of few build has of over contracted and multiple. got copy that ability golden And that great the last fully of pipeline, executable not a position. And this turn a means as enable that we spade EBITDA basis that real of unfortunately, business have business question. quick dirt a is these to to that contract at that's great that our we profile adjusted do of in them, contracts, at which don't in sales a the accelerating. if well rules gives the Ryan, development of times is us to we've And assets a remains intact, create strength the the roughly until couple five a of inside that into firm team have, we've outlined of now $XX which billion, us the very, a continue part pipeline investment we of opportunity options tremendous sales clusters very this fill as north got and converting that sites profile

accretive highly So dirt that CapEx EBITDA. an investments, conversions of to It's turn generating month XX to very cycle cash. quick start to about

on a great capital the contracted And deployment basis. high gives accelerate really to fully long-term to contracted accretive so deliver investment of us and fully that assets highly return, continue opportunities into opportunity a

or the other is the Ukraine cement or What's Europe, outside you more contracting fuel use aviation engagement? in fruit, a markets, and standpoint to activity from power Given do events lowest-hanging cases opportunities see industrial their some political the accelerate of sustainable and of both it applications?

and utility decarbonize, think the and renewable competitive I - the with broad continues frankly spectrum of high. very most base transition those, very, cost to to pretty facilitate to Well, dispatchable it's value of power ways continuing be The a energy of load right. one the

as So very been today, us, and talked sector, very certainly, growing attractive very, power about the it's very, to heat rapidly. we

between a from think fuel wood orders addressable sit that's I IEA I that without delivering to of by reach believe XX% industry that excuse think pellets. the think now that really that XXX year biomass, makes magnitude. at where an by total we're total to Do the something a addressable market would hard in be and acceleration attractive. the current of metric and biojet XX% when and XXXX. by net it's me, of going because look total, security to we suggest ever some in tons per But of scale? modest zero sector, of million would need benefit. mix million XXX XXXX for the have it multiple at you the we because right from really, do to look is market, it is perhaps XXXX, when so difficult the the that, But That's you like us gas sustainable sector, aviation on energy crisis the the implications industrial you light

that for use means to amount these [ph] the and so abate climate mean, a what the at the the ultimately we across have but remarkable. change profile embedded ability of of is opportunity these pay you enhancement of in in business will available ability a these is and time embedded this long-term here look I number industries premium and incredibly cases really, take this And tremendous our with value mature? when margin cases pay believe difficult it business. customers the use there's to problem different to solving willingness that the the a and of Absolutely, segments, to

last And Okay. for me. then question

is volumes [ph] one that terms of any margin incremental there percentage could to of enabled? And from any the capture? Russia, what guidepost be could of that Enviva MPTA In opportunity if pellets market sense potential two coming around on any

assess historically, physical that participate extent ability in the be of so to So to we better to clearly, also at margins do we going we in demand, the which the I the we've at largest given or But to means near difficult to And volatility are And ability the provide do term than to the situation. - supplier. the historically. that are described have of liquidity. it as we've continue seen world's would think market so, have we and book world's what have very the an largest we

the Thank Appreciate you. color.

Thanks, Ryan.

Elvira [Operator Scotto Instructions] Please Canada. Royal ahead. go Bank next from Our question with of comes

for Hey, good of me. morning. couple A questions

timing from the to ramp annum First, about from And on contract? of XXXX to MOU this the talk XXXX? think new secondly, to about tons XXX,XXX you of cadence how conversion MOU, metric just then can the the per

really Elvira, the great you, for thanks Yes. to to and question. talk

in counterparts. some ways little a is utility sector than different industrial the our bit So

that it credit, asset, similar, that geographically the we you've whole of themselves being point the pricing, industrial you got very, instead the with is, you've and very tenor, While consolidated actually and have have of Ts of fleet them a got sector contracts right, are large Cs. assets production What agreements in one disparate. are sort single

like really from to And a out a with certainty specified fragmented can as supply customer. fuel the through a path in most in chain work most an has our and figure around benefit by raw with manufacturing within industry months, visibility they to more have industrial contracting of cost tranches. been converted think the we tranches, chain convert chain, supply with - that then then into through work But their ramp, that delivery hadn't really And as exposed goes from contracts process couple our certainty And Enviva. MOU as to a get the into in before. competitive company also, they the and they this. points from sector, help the assets it's is so a what And various or or mean to those is specific then converted material energy to that their perspective, that ensure delivery been we we them contract that on, help most get traditional binding the their I optimal logistics, volumes are the like of that take which have tranches ones pay or And then overall contracts. them get which like

modest, relatively work they is in the in in we announced really conversion done the the ramp the about the of by a replicate those displacement level And of time. how of activity case of fast processes. place customer. there terms of can lignite, And then industrial be been this cold to amount relatively short some for the for plans so in needed These cycle any required have and morning,

period do to next the months MOU fully quarters we this excited J-POWER extent sector. as same thing, like to kind we'll forward. quite to the the expect did, their the to the expect you power given And similar conversions multi-asset couple the generators across that same the should and full do elect months. us we're contracted so contract volumes to MOU you'd the to And of of ultimately of opportunity move And footprint, convert have thing over over industrial

Great. And bit is, And there's then in very logistics, last thinking with potential Thank little about building any you then with construction, question you're can respect pressures? how you just those supply when to just then plant if And issues plants? inflationary and your about you're just a building much. inflationary my talk pressures.

Yes, sure. Thanks, Elvira.

inflating headline margin. And price, your considerations that for escalations are we've way those is and the CPI, you oftentimes describe escalation it our operate generally tied us our business an great the the contract But given structure So we the inflation, and it environment. model immune. which the price to in in PPI, price insulates headline also are the provide that seen make us contracts, inflationary inflating business way that from headline doesn't and you're

operations, line, And tower. leverage cost well scale so we're within potential our operating doing given if our that mitigate jobs at we're and the to of overall the increases able reasonably cost

We to where also, overall - those possible good of in chain could a that in decisions around of value volatility. be couple we area a course, important our extent that to we And is chain really of inflation the made exposed to the of pressures cost parts supply example shipping. fix, our of possible, seek this, operations or

entered We've partners, shipping. of we've as as for so for of shipping through [ph] we under well into portfolio - The similar cost contracts, contract. ton life dollar-denominated of long-term entered our into on basis component for volumetric long-term where and on affreightment we variable a laid directly shipping, vessel-by-vessel structure, each when contract And risk that the component the shipping of contract, per with pass customers duration off we've to contracts basis. our bunker fix a the of the instance, the US fuel, our variable a for of

where tend certainly, build you think so few generally, it of at we And contract from both mean exist plants our are there doesn't largely inflation. I mean, through, all. insulate people. seek when trees labor our lots to very us to we about doesn't That and operations, and

So we of effects tend the on sort of a to mitigate away labor. bit

have that means activity harvest, component. it higher the inflationary saw is harvesting of engineer types the timber and that demand greater that against we're of a - quite given competitive underlying largely that some of on to from Although [ph] pretty do and the wood of that of making level fiber, that from or produces leftover course, the sure in we're a mindful have those supply certainly talent. we And of fiber, variance very wood highly insulated a a small. of residual ourselves fortunate degreed of dynamics electrical degree that But we've demand be we certainly residuals positions, with profile need the

overall a And so generally that current generally for roughly X% insulated Again, accreting but the market procuring, look really as so of not historically result, in exposure. and immune. the at in we're modest a year, our that products you really, can terms X% even see you to

a Thanks lot. Great.

Always you Elvira. great, talking to

with Mark JPMorgan. from comes go next Please Our question Strouse ahead.

our Good for morning. It's Joe Mark. questions. taking for Hernandez Thanks

guidance. just Firstly, on

So thing at that issue no XXXX Omicron such your in was guidance point. when as there you October,

talked stronger since first getting experienced here. context reaffirming How at you've the that And in headwinds we the the about back of the like do be you've it some six about a weeks or of today year there year XXXX r helpful. think should so issue any today? an And guidance given look really half to just would you

much. very that appreciate I sure. Yeah,

fully a the contracted this it of business of benefits One is, is business.

year the of we from inflationary is we talked XXXX metric understand and naturally, And pricing about, environment the year. certainly the our benefits that the uplift just and set us off-take volume for full what have seen so sort and the an pricing in overall inflation that the And considerations during ended. off-take you partners opportunity the given for given way

associated a And in we the off-take reasonable I us. basis lift largely early some so behind with Omicron. some QX that you've news saw is on in QX and think challenges accommodates of that Good pricing that's got

as its in impact, obviously during about ramp step-up to reaffirming history, the think the year morning. back we year generally that it's the speaking year, half clearly, XXXX plant business. in of company's course, take When big have pretty and full really, expected look year, to a somewhat account, you And in full the Like is half. are that the expecting this every so of our more in Lucedale the a over And is now into terms its be first we and we volume full course of we're price. guidance for we're commissioning about seasonal

half two thirds weighted, the given As one seasonal first mentioned, it's back weighted, third Shai about half profile.

as QX half. the our is interesting QX, So QX steps quarter, that QX, as a grow up softest over step first over being pretty business, to new we continue much and south, Obviously, What's see big QX, where is where building a what this the though to plants, so warmer it's migrate we're continues you on ships the right. that south. table, we're of mitigation fleet in seasonality, putting our

continues mitigating effects of in on opportunity the we that impacts. You're uplift in you you of again, And margin south, for seasonal mitigating migrate embedded providing, frankly, a see continues some to the significant the really opportunity the margin facility seasonality first focus as our of to some our as half of look some - the year footprint forward. further pretty

discussing Got it. you've Thank is about, you. Mississippi? And point then Bond, that just one the one you're in additional third talking been follow-up, the

right. That's

right. that's Mississippi, Southern

Yeah.

when possible? that right of on and last I on, the looking any make would So you construction about talked based And aggressively timing to everything you then be going now color thinking that's helpful. and and move are backlog timing, Just more that given up think on fluid if the there state the the about demand. being subsequent call, a you decision, in

business. on great around - a that world Absolutely. we're tailwinds contracted profile the teams, contracting Yeah, that the continued to see, absolutely. our marketing The the decarbonization incredible means opportunity of we've we and work see fully sales our

$XXX very everything very at are long at our million going accelerate are very the the produce million, investment capacity. can forward. a Southeast very, we investments we across new into have a [indiscernible] We And new accretive time multiples, opportunity in long a a that US period can dramatically ground of quite facility to contracted to for period the working put for sell We time. of $XXX into

possible. January, announcements and do some the in seen pull of in that that as You've aggressively forward we of made as much to working we're

have our add we flexibility without need would program CapEx capital. the financial I to accelerate additional And for the that

proceeds $XXX ago. cash netted to we a equity saw, few the you net the completed our million weeks liquidity, from the As issuance,

XXXX, we the to revolver Both both left We refinance. have maturity need on the maturities so longer still have million. high of to $XXX mill, a expanded and no

additional do to everything that on be expenditure side And our basis. on if capital we opportunistic us something So program. do, no for need an we'll will for execute on will actually, debt capital long-term the

you. Thank

question Partners. Energy next Our Please with go Kevin Pickering from ahead. comes Pollard

quick Thanks. Good questions. have morning. I two

is any - - concerns drive So other any economics rapidly long-term the the pricing in that you terms improving you your conditions chance security. margins guess, as and biomass, to higher one, first through of seeing maybe drive work over contracts your guess, to I channel? it's sales other with higher plus I energy increasing or Are

Yeah. yes. Simply,

favor to seen each terms long business, and opportunity as move what to from continue our this pricing the to As contract agreements and margin our in we've escalate, our general fortunate economics continue improve. basis of been a to I've the the year-over-year to conditions for run of is

AGM as are and fact and see both that ton, encouraged the continue to side naturally our You the that flow move the grow demand we're And per that. base looking that of premium we quite forward. through to we to And well quite line bottom EBITDA certainly on as by, frankly, the supplier business as optimistic DCF. we're into

Right.

as sustained aren't as these to well a new enhancement, you contracts add drivers. chance pre So portfolio. for margin volume the just There's

as only constructive pay, relative cases greener look around the manufacturers. at products we the the forward-looking you to conventional associated very premium is Yeah, of ability to you carbon, to decarbonize rising difficult EU look not this pay But What's as alternatives. industries and produced with are energy own as a that Kevin. so by customers interesting do their certainly, see environment the willing about at ETS sort use where the customer our well

the for And us opportunity time. embedded to over enhancement provides that for for incremental so provide margin

conference question-and-answer This closing Keppler any session. to I remarks. would turn like back for over concludes John to the our

the for Well, us thanks, everybody taking today. time again join to

you've several with believe is be business consistent position And in. we continue privilege, And that reliably stably, climate privileged look to the going forward be continue those deliver We we fuels. in very the in of safely safe. to And to we're We're that fossil the everyone responsibility that talking benefits job are a change. strong we a more to continue to of Have as continue delighted any for to execution quarter day, play single going And that pure good same, trees. joining we're have and in meantime, look XXXX to a deliver not deliver thank from doing pretty every ESG way, And mean seen day. exactly our first that We're I in fight the regular Corporation. to way years. to forward that earnings. the us weeks now to growing last that in again and But you do remaining things, several we healthy same over hard doesn't, great we that, working today. a displacing us to

for concluded. now has presentation. conference The attending you Thank today's

disconnect. now You may