Enviva (EVVAQ) 4 May 232023 Q1 Earnings call transcript

Good morning, and welcome to Enviva Inc.’s First Quarter 2023 Earnings Conference Call. [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. Please go ahead.

Thank you. welcome First and Earnings of everyone, Call. Conference morning, to Quarter Enviva’s XXXX Good interest support in thank your appreciate We and your today. you of participation for and Enviva,

of have On call, and Officer. Shai President and John the Vice Officer; Board; Executive Chief Keppler, Chief this Executive Thomas we Executive and morning’s Even, President Meth, Chairman Financial

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

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

forecast. periods reconciliations presenting directly well addition included to comparable measures accordance will other we disclosures pertaining our GAAP, and non-GAAP adjusted relevant results completed most certain be financial is of in discussing to these reporting In non-GAAP with release. also EBITDA our financial the in as and our Information their to concerning other as measures GAAP measures earnings

contain investor can which at recent Our be website most our reconciliations non-GAAP SEC on envivabiomass.com. financial reports, release earnings we found presentation, of measures use and

call now John. like to would turn the over I to

a ago be challenges improvement understood at the to and are deeper XX-Q that team the the still clear the the longer time. It’s cost the positive ahead. are more benefits first taking Good than expected release quarter filed of with realized effects significant earnings and expected, initiatives And and than joining that morning. the Thank us. for month our you yesterday of that productivity from outlined

the at reality accomplish important about he revised to the we term, a result, performance have the combined has walk deliver better our morning. aligned operating as guide a limited internalized. poor to progress highlight last expectations leadership disappointing resetting company the company the the reliably cost year, this And a that guidance and with can the has as end the in company given well to team possible. near changes that The is operations what in through of how Thomas the on will very team quarter some productivity is get made in first as demonstrated position

quarterly to order Enviva’s to company’s our contracted in a leverage maintaining decided liquidity conservative repurchase flexibility program. existing new, share throughout in report the and opportunistic and timing where and to year, this to of alternative can expect port in management internal process and consultation reset generating clearly that With we an current plant authorizing a of Enviva’s investment for the cost Directors, work our and guidance Board as plans plants, the position funding assets fully and After undertook uses capital our progress our Also revise to capital consistently part and profile, eliminating allocation plans have by flow, of reconsider we quarterly cash engineered to where maintaining the provided, prioritize our more do. has the describing Board careful you framework allocation review improvement potential of have dividend, policy. increase reset, on strong team of with efficiency the and a investment

robust shareholders. These value believe to on is for markets. this allocation to in Enviva create best flexibility shift gives take the the a Enviva full been has We accessing capital our to time. the in a with improving our capital accelerate visible future, advantage and telling way in given growth of changes and for framework we organic potentially us to ability the firmly also highly This ahead. long-term of are yield growth revision some inorganic durable set reposition something to growth And reliance allocation us growth think company, from market the opportunity less pure-play company, front all I the of us, capital

role have As me many difficult to ability less no members I’m no largely the of committed less to return the last other stepped back performance now. us at in historically. And the Enviva the than be know, levels but privileged of of with different before, from in I But to those you Enviva fortunate a you financial down our to I’m convinced like Board, some have have the to behind deal very company’s issues. year to also from high medical to success. opportunity seen

to call like I’d turn Now to Thomas. the over

as and everyone. to XXXX Thank results expectations. it to our significant time a some our take walk quarter you, going to John, update and our good morning, is I’m first change guidance through

Let’s understood extent held a the with start our we over quarter, we have completed the and on books March soft Day had ago, softness. knew that discussions a little results results. a but April quarter we the Investor would first was it closing first for a depth we when When we of view and preliminary fully month only

of of million. a EBITDA This significant drivers is reported and of original from results for main million expectations. $X.X are $XX of the There the expectations difference between adjusted our first X actual to XXXX. approximately We million departure quarter $XX

quarter that from Investor difference. of half $XX for lower discussed our of million customer the as deliveries but Day, about results. impacting first First, we This mix year it shift second accounts straightforward this at is the a with have higher-priced to we cost of

and expenses had $XX million approximately the is quarter. very of repairs unplanned This maintenance we Second, during high.

a in actively have Unpacking that have To result. run And over plant. these we’re we demonstrated our to leadership exceeding operational this end, cost management. managers cost operational executives, saw operations of to a especially a plants, changes around at company production the and and call elevating leadership controls overages cost isn’t as general that bit made and the that prioritized way and senior safety. any and to management, strong X our this, discipline, address commitments leaders in I both we tonnes select and cost operations some discipline culture, changing cost

pressure of results on area $X relates plant professional third this fees, to optimization tied quarter incurred The to our costs related to of initiatives. approximately some million

to underperforming reported around. We and that costs turn have highly in significantly have quarter. we it expectations, one is engaged And us firm those specialist are plant isolated first a the help our

year-end fourth accounting the extra during went financing We in to quarter part we through. fees and also quarter, due incurred the and complicated

from the decrease and did we’re at for materializing subject expecting were improvement we with deferred the at first $XX the adds in difficult. the quarter up a beginning the are generally year. when the in million difficult expect margin not $X.X final, and we most we have some we reverse what what XXXX. XXXX This And seasonally very Fourth of to while our accounted at productivity It’s XXXX. production and All a that similar rate to costs enter gross to expected are the year. start that shipments cost The deferral saw to million, year-end. approximately and treatment and we to accounting transactions in

view first million short are adjusted deliver this for million term in more Based million from on $XXX million. our the business $XXX what XXXX on EBITDA reducing the year, to the months we’ve and we of from to results X $XXX will conservative $XXX expectations taken a to

in Let step the the X down unpack me guidance. main drivers of

expectations the midpoint of previous of guidance $XX The million the $XXX To decrease to in weakness down of are quarter midpoint improvements the providing remaining revised the revised $XXX the productivity as related first year. related between fully to to for the of the expectations of remainder improve next million $XX are transparency is and X is timing expectations quarterly the guidance we in break to our Approximately realized. the and around quarters for million when cost shift further, XXXX. million realistic

$XX quarter, range EBITDA to are adjusted $XX the in million. to forecasting we the be For second of million

between to $XX million. million For the we’re $XX adjusted EBITDA forecasting third quarter, of

fourth assumptions costs and our we of out business. production drive adjusted million of For million. $XXX are The are ranges EBITDA quarter of around and $XXX ability to the primarily levels our by the XXXX, forecasting between driven

a get back to overseeing now. team know personally operations am term we responsibility I it’s track. ground is of can near And our lot there on my I in just the up that. do make to

we said, I’ve are As progress. making

$X For ton per of approximately to plants instance, fixed $X approximately cost drove the our ton. from and delivered reduced December company total to March, per across the by tonne raw down per cost we material

how we diligent While not team It as the it’s as and does, strategy. alignment also in the we as expected. been not as sounds. it hard of require fast day-to-day management clearly however, execute It’s

are and to on in line] case and cost. at They plants, Waycross rates Hampton, meaning and that of moisture basis a in the also which have call X of demonstrated drive [dry of the which plants, reliably, XX South South the plants volume either we or production or operability but reduce we’re those reliability because original what Hampton Cottondale dryer the are the evaporative We performance. capable bottlenecked off refurbishment. consistently expectations is limited performed at outperforming the inherent is material, content that which X limitations Four raw portfolio costs its of or plants. in of needs from on Lucedale, largest are of both our our are a at our the Greenwood Greenwood case where

facilities controlled known manufacturing operators in equipment safely who within management by unplanned around of output, place continuously With for managed and reliable over [duly] our opportunities and these and managers It’s skillfully in time, effective general the well-trained XXX, eliminating standard points challenges improved downtime. cost position. each of with the and tackling work, blocking built and philosophy staff deliver of set plans understood and led

operational what is This we call discipline.

we way year execute up can. our the addition also staffing issues have operational of know like have Cottondale at in also South Waycross, lost reason and staining and in a consultant of Hampton, technical turnover other improvement we with That’s The big why assist. place we ground of that in I facilities. the that challenges We this to successfully the at spades brought in third-party in progress. make have where each Lucedale When is to and a much exception and are that

we at run roughly year expected the this exit when rate XXXX. will we started We

now finances. to dive through it Shai us I’ll take a of deeper turn to over our

everyone. good Thank you, Thomas, morning, and

for Let’s We the XXXX, first Net of as million of transaction of XXXX. of million $XXX of first first loss a for XXXX net first first associated quarter revenue the million. XXXX was interest quarter to to for compared the as results. the generated loss for of quarter Net with start deferred XXXX. $XXX.X quarter the gross for $XX.X million, margin expense quarter quarter net loss noncash first $XX.X million $XXX.X of the included with compared

margin Adjusted $XX.XX as XXXX gross ton first for $XX.X The for $XX.X attributable first gross year-over-year cost for decrease first first the per Adjusted to for was quarter margin compared was XXXX. to challenges XXXX discussed is and quarter Thomas volume to quarter $XX.XX million earlier. the compared quarter XXXX. metric the million

first plant million was facility. cost Alabama Adjusted under for of quarter of was and to XXXX. first as Epes, quarter the which EBITDA million, March $XX.X XXXX, revolving to portion million senior restricted compared our a our cash secured Bond, including plant as cash $XXX.X of for on availability $X.X hand, Mississippi generally XX, liquidity, includes and XXXX, funding credit Enviva’s

to not is of spend invest the majority XXXX changed to and with developments. for greenfield plan in $XXX the expect million, total million in range on capital we the of our growth $XXX expenditures Our

underperforming midpoint to our fleet the at apps volume and bond improve approximately primarily million our million expect plans invest in of of in We cost build-out to being across directed our our expectation invested with profiles, the approximately and projects $XX to $XXX plans.

our prior weighted. to spend back-end be CapEx scheduled Similar is years, to

We continue $XX approximately to XXXX CapEx. to on million and expect spend maintenance during

Enviva’s to as agreement. leverage of our defined continue sheet Xx ratio commitment credit balance target Our managing in remains conservatively to to a X.Xx unchanged, we and

to be in temporary, XXXX. little We exit range we a early but expect XXXX will get and target back expect that, to our above it to

a under As threshold reminder, is covenant the credit our agreement X.XXx.

would now back turn I like that, With to to it Thomas.

we no year, to you, April the not and fast certainly we is as are better, needed improvements as March but starting expected. Thank Shai. as start and Look, disappointing to look question.

on improving has reducing durably as be Our short-term costs we to productivity and focus quickly as and can.

changed, the has has stronger. business our near-term our outlook industry, Although of growth it been profile never long-term and

tandem tons will Worldwide Renewable product which online. per the Energy European to customer an year resource deliveries announced demand for we with member metric Union provide unabated. this will take-or-pay we new important we text month to over in demand is given our EU coming Europe, the sizable a starting with continues woody the contract Yesterday, existing next XXX,XXX renewable the to new related targets the have tailwinds for Japanese In how the capacity nations. expect Directive, X biomass, of finalize its to net-zero continue with

Our to be supply. persistently, industry short continues structurally

one new capacity new And underwriting fully So signing production the these must just new large-scale therefore, contracts announced, like contracts get expansions. built. our capacity contracted means we are

mid-XXXX. our As our modeled construction plant our and performing operational Epes are, which plants. and a new I’ve is Cottondale progressing capacity expected Currently, is well. best Epes, reminder, the said, Lucedale, of is Waycross, be Alabama as to under

help moving to well. greenfield at and provide Mississippi our we’re of plants plant, with Bond which new X under and Bond, this we plan forward approach the EPC an partnering will least as certainty, construction construct cost with For firm,

term. Before benefits us but we can give and the it as the of results are, quarter that off, what what of to we’re when for our cost remedied and questions, guidance forecast taking steps full realize driven but by much necessary actions not expectations. is be to are expected, reduce we will our the our we discussed We I’ll believe problems recalibrating in the call XXXX were led do fix that them, to the our this has than To short know we position recap we mainly quick acceptable, morning. this a open start we’ve softer

maintaining have We a look priorities very dividend. lieu taken at capital of allocation and our hard a in also

productivity, We have operating second first and very our policies on a foremost priority. revised focus our and asset close with position leverage to improving liquidity and cost

will is priority it repurchases. the to third we capital greenfield developments. to accelerate is And to appropriate, fourth, our Our opportunistically extent shareholders return through share

to rebuild strength those a We coming the And exactly and what this what lot fixes are see know of the of quarters. be have do and to We us work company over regain months needs ground lost. the have to we will you done. execute

questions. Now let’s open call for the

[Operator Instructions] RBC Our with Scotto Capital comes question from first Markets. Elvira

the you I a few Thanks I questions. detail But have guess for that provided.

what EBITDA? guidance -- kind a changed the maybe from first more April you term? such on can downward what to cause why mean, was and then you issues, I you First, can believe of do you big when in And on these but that materially affirm done, X Analyst now little your remedy a to detail here revision the you you believe issues mentioned these and remedy quarter Day short already the

question. great Elvira,

me Let to walk where we a how bit you got are. little we to back

XXXX. productivity we position going November As a and were plan -- October, confidence we us cost where gives -- benefiting from we’re October The profile for and progress. we great the XXXX, good. lot And into the November. That were of September made for cost well, of September, prepare running plants was

March they not behind We thought April that we we then certainly moved to talked and little we that yet. set into vortex December, or QX. the us. a we recovered. challenges. us were Investor created about, polar was of thought [indiscernible] back do polar operational and results And When vortex had -- into previously noise We our and Volumes Day, as what January results went realized -- bit as have we February

nowhere had but than up. then was were and drove We we ended expected. realized we out, than that near $XX what we certainly April, position to cost substantially thought. We actually some The in higher be we we March costs going thought lower

we but we ended in it about our that position. had we to were And closer cost up the in $XX of $XX million pressure position, so Investor when all cost Day, being knew million at in all,

we when so left think you again March, April, where but need again, that about And what to than in challenging better be. us still not

that and with more mind, provide reset here cost so expectations to much And have in we just profile. a realistic

down, February, right? an quite enterprise as than still do how on more in volume drive we not made never and good we actually second March, wanted really question but to where March. volume, we in made tons the is your cost So progress We’ve February be

position And so really cost primarily it’s a issue.

costs, repairs ongoing expectations. an we and that know R&M, exceeded manage maintenance basis. way our on But Our to how

plant time Hampton plant the And to Our just couple have. the us effort as it’s And talked South in higher. that there. deep last discipline that was more contract going to was throughout took of and we that lack get really then disappointing. is weeks, we labor just it the a prepared way take about realized to the potential that to into We remarks, we more dive going

think the going a $XX cost in think -- forward, going going you to about year. the we’re for not out our a be out cost $XX were to mean going not million where will March come thought into cost $XX, does June, We’re of this question. it’s again, So we compared from drive we what when But we second be, But quarter. to to thought right? another to it’s that about $XX guidance revenue the of coming what question. below It’s position We tower. do

the over wood the as that substantially. any at see of is of What real the lower the weeks we moment bought a couple the has course we’ve is come wood XXXX. of last One delivered cost of we’ve down bought tailwind than things

now will discipline repairs So instilled discipline show aggressively it’s making cost to that of the pockets, a of need cost leadership labor, contract progress some improvement spend in substantial those because and very don’t with in really changes the discipline. debt the plants we good maintenance there. have operational And and matter

I’m the leadership ever perspective, need operational to now managing closer much we the been. -- do. than what from As operational I’ve to said, plants I personally an am I’ve

are out. Cottondale run examples Waycross, in and plants of day what day exceptionally do. Some of Lucedale, we can prime well, the

to discipline the We every best-performing get adhere the of our at some certainly elevated cost the that our to sure have day all of leadership the to position in plants reliability, the those plants make operations know to plants. do we we that volumes,

last Let I’ll let if add more me before piece one just you ask want. questions you

our proven we’re step cost have All the believe we they that something plants seen to not can into position. that something and is that volumes to that change of going This you before. hit have not have the

volume that our a back by of seen bit the single We get to track. this than led we perspective instilling personally we’re perspective us longer from discipline me, both have will little every and one a cost a before. and going At from It’s on plant, thought. us had take

view And conservative can so we with to felt prudent know it’s just achieve. a more that that, we we provide

Okay.

high So to bit the I a EBITDA guidance, end talk the guess, just range bigger look follow-up XXXX what guidance? I end the a actually the what drives high maybe your the the I would end your have about even low the then what’s end guess don’t low make you low question low potential end? Like as versus pretty end? if guess between missed a little at and is, of wide that, of you the guidance. I it’s And your that

cost faster, costs on certainly fiber, midpoint reliability which range, we going us higher the when the over on increase that faster drive to -- we’re out down to a around on suggests wood gives in cost the is there. whole go wood So confidence more create we believe how revenue to a None is our see the the track. macroeconomic the fundamentals, fundamentals, conservative actually good cost we we’re guidance down We right? all running of to that And to per our don’t Will a good position. have that we seen the that and it than If or we is comes can But path the we’re right? spot This range of end provide Elvira, how certainly reliability come cost comes guidance of are -- lot. improvement down, that the at that fast back the we we the [indiscernible]. I’ll to a that very have the good fast I very can And wanted scale, weekly costs maintain ton? of dependent markets lift. reduce range

we’ve that discipline drive cost range. certainly will reimplemented The the to

very If higher And confident have than so getting at a had a view, I range. like end estimate. initially, we faster this shot is conservative increase we the that to certainly conservative our a of we feel anticipated the volume little

I you what’s Got And what’s thing this just financial to for from Okay. difficult perspective, given how appreciate rationale for be a dividend. going to it think announcing I does appear prudent then guess it. it I my the authorization eliminate here. the question buyback and the time? on, final to was do at do. But that, like a

comment, I is to price appreciate at where your we I our obvious today, a program. -- value our I No. are see creating mean, allocation, time certainly, share-backed Look, by is that thought you Thank prudent capital company buyback And price we’ve here a mean, on is today, when you, rethink Elvira. that share certainly way long undervalued. shareholder for thing. it’s that the total an certainly -- it share a create we is

to valuation too certainly even -- we it’s today, thought so our low. was part of before way as -- And

consequence that, and of given has us that considered so logical a is the Board that authorization. just And the

Strouse Our Mark from next JPMorgan. with comes question

is there. how Elvira’s control? -- within mentioned being into Kind a of you high, lack there. bit now far mentioned, following too you detail there you The your much more labor headwinds up the of can that you I comments that on think as that go discipline questions just as contract

the what then you that input that guidance? in on Or color being past think over how that that, more how the assuming baking that you there? that coming mentioned, to structurally wood higher bit about weeks few a down the just world. are or cost stays a more in? labor Are across reflected costs level Just And you is

question. second your with start I’ll So

first them So are now land. we’ve and seen that certainly staying our your where assumes to staying costs guidance -- wood

Contract contract a right? example But classic to one we history control, within that’s is our lost So staffed, using and now. labor we’re staffed importantly, where had We’ve I of staffed. We of entirely certainly We fully being fully -- not more get discipline were fully told the think we labor are a part. at we this completely good were over unacceptable fully contract time. time staffed, at done need that that it’s speed in labor and a don’t haven’t out a the that staffed. It’s when need It’s you we have fully same levels example the to when control. entirely to -- so very our you’re we

You be And don’t levels contract down. of need to position certainly same have big part a the our of labor. driving that cost will

Okay.

your any looks capital, might impact add that more cost on and including production just contracts? is Okay. capital. your since like of willingness that The follow-up. your pretty just about know not debt stock And or then a quick project I obviously of last ability sign exactly talk cost Can what peak to that’s that, year. more have generally down level the you long-term and significantly

for Thank Thank the you, question. you Mark.

is fully we funded about lower. during in as with the that -- that needed. Day, Day, be during regional Bond funded, will position to is that like we we mentioned So capital Investor is get to the And million and mentioned definitely, what $XXX allocation debt Investor change fully of amount Epes mentioned now

accelerate see with even the prioritization. any reason the believe in to with So allocation of that not in growth we to to we’re -- program, further don’t capital potential in that continue allocation as our not reason our now any to with the our capital part the of the change see prioritization

Our comes next Ryan with from question Levine Citi.

comments? can year volumes But into simply. us the relatively is you as [Indiscernible] the prepared customer of are contracts in delayed back give are why half color if contracted the take-or-pay, your to

Yes. No, absolutely.

a And you an take right? ask has the the volume, agree on So us challenge, hey, us a will to will us premise, change. actually of, This for operational right? customer absolutely take-or-pay. the requires they It’s to contracts are can help example, we always when basis the if

for a in when we agree And we accretive premium case we do a it’s to When get us. which that to change, When did change? this get.

half and rewarded it’s in back these get so we kind with going We premium we things for of of financially. And second year. a it to come again, -- the do only when the

We provide commercial create water of have ships of almost XXX to a margin opportunity little And services a bit an business. ships many those extra through on year. the the

through today. part have different that’s of said outlined move premium a We EBITDA. that the guidance That overall that call flow period. the continues our customer changed. from we to our of XX% has as million can received $XX to into you not have XX% to that previously to that -- we That And about we XX% XX%,

the to the Given those receive ability capital and the of to volumes implications you to structure do the decisions, capital the take flow force have them the to structure? cash preserve

this we in it’s -- we could. Yes, but case, We can do take-or-pay you. the We didn’t don’t absolutely. a tell contract. an We Unfortunately, this opportunity can’t we help could customer, sorry, really find

just so Analyst you to what little the the guidance Right. company in as guidance. shortfall about understand the Can million you you on the mentioned that transcript of in a then? then of we on give the knew million I you Day you EBITDA to since us or the numbers, the so [indiscernible], your highlighted management And $XX terms adjusted time color in million guess in, comments, of guidance, And shortfall decline expectations cost think a $XX are versus that to information when a at was new press some reaffirmed. release, you $XX

numbers? what of understand between these some differences of kind us help you the Can

possible. not absolutely we but we we range and we we’re we So trending thought were we reductions at then we anticipated. have towards lower of we of be saw thought certainly still -- higher clearly, starting not original the significantly materialize. as the would but seen -- outlook we of was within the higher that, certainly position the base. And the guidance changed -- business, And Investor be Day, for that range, that it year, might the the the guidance cost the for have in cost out the we low at end the had March books thought cost And we April, beginning we’re than we March was that cost -- improvements did know as certainly we were And the was April, with the as what year underway April the cost close that than don’t rest we final numbers drive a we but of anticipated. at

to QX $XX thought. had had lower we why in QX. remaining we will be that’s and And over million that so $XX with million view, conservative reasonably will the EBITDA a And QX about divided acknowledge be than

we the Again, drive longer to -- it’s little take going but organization we with of bit from out and out that, that us exactly costs shifting cost the to a to really the we’re position drive can a right. like just it’s we perspective, believe of goal anticipated

of we’ve other Hampton take to it’s last is reason piece us weeks, And of to couple drive South setting indicated our going outlined. in that over longer deep dive the The information another back. us that clearly rebuild that that that’s that’s

versus $XX difference? versus expectations versus the a And million the a just $XX shortfall company on guidance? Okay. management then shortfall million follow-up What’s

didn’t for We the first really guidance -- the first provide for quarter. Ryan, didn’t really quarter, we

a we like that -- I can So take think this.

had and million. right? different period. miss $X.X print $XX this and budget, moved it, we take million on $XX we that’s of compared to you million our so is $X the million the original printed million so $XX DGMT. We together, we cost And the No, into if incremental million, bases $XX And why

question Raymond James. Next Molchanov Pavel with from comes

the of out. the ago, or dividend What income of were was some XX% even obviously doing full preserving a you today suspension it for kind $X.XXX and with dividend you sticking in a the thinking investor. month XX% A instead cut, zeroed

question. great Pavel,

evaluated return. necessary elimination alternatives. current an of some fleet think existing accretive than you total future balance shoring the shareholders plants. to and about capital our our found strategy buyback fleet; led priorities was and capital our was believe new buyback sheet the moving the third, up Board the new when investments a circumstances, And a accretion All from -- outlined: of in first, we’ve asset fourth, for under our the shareholder leverage; investment investing better So and liquidity for consideration program; complete value that and assets perspective the of of growth. right more the in secondly, in us an the And our any and of another through up clearly return dividend and share this that and certainly share course, together that allocation --

Will you dividend? And so, the circumstances? restoring ever under consider if what

absolutely, Pavel. So

our We plants we’re has cost that get changed. to $XXX growth XXXX, certainly That here. We EBITDA program restoring EBITDA. X and in $XXX -- believe more from we’re going million not And going to structure. have hit moved not requires million our to to in we away in build believe

certainly going Those are getting And consider to the strategy. materialize. the certainly on a the X are sort growth can RED a focus without key our elements that one we’re from is to and any beyond point weeks growth, able certainly clear be but growth ago, we But tailwinds limiting we we we a to where are talked that a And part key of our then in paying about back generate our is potential, more to thing of our that’s certainly potential. need. we at couple III the that, just when opportunities going of that form look dividend

signing right? we as profile, growth the revisit potential cash capital of with medium focus in in the this that program. And company going evidenced our to the a allocation to Japanese Japan, growth another will contract Japan of generate we’re that eventually allow just certainly growth So by term. part customer, us is

And update older lastly, an can fields? on we get

in sustainable going the Pavel, fuel very still strongly. is very, general, aviation space,

many work We to in counterparties space. that continue with

And going financing not are to deploy we asking it’s boardrooms is many That successfully that that with who is question, like for is or questions, Alder. limited But in are sustainable in and Alder as and whether are provide capital a -- build other coming that. providing it’s to fuels. to them we’re to wood same ones whether something aviation of from? key their the on working Alder. the solution. we fuel plants And the companies, where believe generate of we’re the it’s one progressing, they, only All can solution

with. more and of have we’re And partners, we great so that one our many working

Levy Securities. comes from Jordan Our next with Truist question

you And as you. level on have to basis. if out all forward. to see there sense changes start plant go how maybe wanted evaluate historically about with could of get how Thomas, I a you’re cost that I a and profile thinking looked potential productivity we

XXXX, So back XXXX, to when go you strong of cost control. we had sense a

pressures. Our the Ukraine the really certainly in pandemic-related and and the initially issues. through position war cost turned that it through -- struggled at did inflationary thought temporal position XXXX, many we it expansions was We with out quarter more predictable. first And up, we certainly then plants. that as cost we right? had We went was went And into of

daily And the these to And October, little struggled is through we’ve plants. so we on seen those a that expansions is new bit what reliability starting really November basis. on have were where a flow in certainly of September,

good actually and a have And We if struggled with right? -- we are particularly them, of these, third-party cost are not our of bit little with news those turnover, within certainly management, the struggled elements all control. have is many

And so like get can said. we’ve the cost we believe we down

that working very in people. can takes the is problem not to certainly people, necessary but these for with operators to a The issue a months you people be X actually independently it they We’re train turnover can’t solve example, replace plant. hard [indiscernible], in for that

progress not we We’ve made but good there. fast thought. as as

we to done. be know needs so And what

to ours. productivity core of management. where by a It’s is it cost plants not needs in it’s plants, place driven is focus the addition and in plans to plants, the of We the be. retention have not the And the and of labor quite in -- uptime some skilled uptime

I making think we’re progress.

on this trajectory As said, the We’ll out -- show. I’ve on the report progress. and will

on that #X We’ll basis, So as is measure more short we well can this, investors a in provide the we’ll provide as that key given our initiative. progress. go-forward the our community analyst forward term, detail go as

the that. I to shifting maybe appreciate contract And side. over

a contracts. costs over Japan addressed shift mix headwind through to the you starts to go another higher in [thinking?]. if and your you shipping as given that cost, have of have terms all portion acts and in ‘XX, that of large we As ‘XX into I’m just if curious

great a question. Absolutely. It’s

this any will have implications. negative no, not So

higher of accounted we, received for course, shipping fact, costs. price that headline In a

margins lot provide should in to right also say a I so an contracts same environment Japan we’ve that contracting enter substantially than of with that like at And contract opportunity now a into we’ve have the us higher price seen these better will contract or is seen we historically. historically. the certainly providing

up XX% historically. seen is to what we’ve pricing compared Certainly,

roll And see start will be through. already will number $XXX, revenue $XXX ton roll the second contracts on revenue as was going increase. year. roll this certainly, that actually so half year. And to through you’ll QX start average, That this in why through, to That’s of per for to it’s

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

taking in today. for the is everyone, time priority join term, cost reductions. -- us you, to that We’ve outlined Thank the short today #X

fix like are But expected, is as revenues cost position not. Our that. our we will

We we’ll have that our progress. report in our control, on out and

that Thank better as throughout for look us improvement we forward quarterly providing progress deliver months updates you plan, to coming execute going joining business And that forward. we our and the much and results today. on

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

now disconnect. may You