Enviva Partners LP released third quarter financial results on Oct. 30, reporting its highest ever quarterly adjusted EBITDA. During an earnings call on Oct. 31, company officials discussed planned capacity increases, including the construction of a new plant in Mississippi.

A second joint venture of Enviva’s sponsor recently commenced construction of a deep-water marine terminal in Pascagoula, Mississippi, and a wood pellet plant in Lucedale, Mississippi. Enviva announced plans to construct the terminal at the Port of Pascagoula in August. The terminal is designed to handle approximately 3 million tons of wood pellets annually, is expected to be complete during the second half of 2020 and will allow Enviva to develop several wood pellet plants in Mississippi and Alabama.  

Work is already underway to develop some of the associated pellet plants. The George County Board of Supervisors announced Oct. 21 that construction of Enviva’s 700,000-metric-ton-per-year wood pellet plant in Lucedale, Mississippi, is now underway. Construction of the facility is expected to take 15 to 18 months.

Earlier in the month, on Oct. 4, Alabama Gov. Kay Ivey released a statement announcing Enviva’s plans to construct a separate 700,000-metric-ton-per-year pellet plant in Sumter County, Alabama. The facility could later expand to 1.15 million tons per year. The plant will be located at the Port of Epes Industrial Park and export pellets through the Port of Pascagoula. Construction on the Alabama facility is expected to begin in early 2020, subject to receiving necessary permits, and will take 15 to 18 months to complete.

During the Oct. 31 earnings call, John Keppler, chairman and CEO of Enviva, explained that Enviva’s sponsor plans to develop several production assets that will export pellets through the Port of Pascagoula. This new capacity includes not only the expanded production of the sponsor’s currently operating pellet plant in Greenwood, North Carolina, but also at least three additional pellet plants, including the Lucedale and Epes facilities. The company has not yet named the a location for a fourth pellet plant to be served by the Port of Pascagoula.

Enviva reported net revenue of $157.4 million for the third quarter, up 9.2 percent from the same period of 2018. Net revenue included product sales of $155.2 million on 811,000 metric tons of wood pellets sold during the quarter, compared to $14.2 million on 762,000 metric tons of wood pellets sold during the third quarter of last year. The $12.6 million increase in product sales was primarily attribute to a 6.4 percent increase in sales volumes. Other revenue was $2.2 million, compared to $1.6 million during the third quarter of 2018.

Net income was $8.9 million for the third quarter, down from $13.4 million during the same period of last year. Adjusted EBITDA was the company’s highest ever at $39.4 million, compared to $30.2 million for the third quarter of 2018. The partnership declared a quarterly distribution of 67 cents per unit, its seventeenth consecutive quarterly increase, at a distribution coverage ratio of 1.20 times.

Moving forward, the partnership’s full-year net income is expected to be in the range of $15.3 million to $20.3 million, with adjusted EBITDA ranging from $140.7 million to $145.7 million. The Partnership continues to expect to distribute at least $2.65 per common unit for full-year 2019 and between $2.87 and $2.97 per common unit for full-year 2020.