Enviva Partners LP has released first quarter financial results, reporting net revenue of $122.1 million, up 13.9 percent from the same quarter of last year. Net income was $2.5 million, down from $5.5 million.

“Enviva delivered solid operating performance in what typically is our softest quarter,” said John Keppler, chairman and CEO. “Combined with the benefit of our recently acquired Sampson plant and DONG Energy off-take contract, we are right on track, year over year. With the expected fourth quarter lift from the Wilmington terminal acquisition, we are pleased to increase our 2017 distribution guidance to at least $2.36 per unit.”

Net revenue of $122.1 million was up $14.9 million, or 13.9 percent, when compared to the first quarter of 2016. This included $119. Million in product sales on a volume of 623,000 metric tons of wood pellets, representing an increase of $15.6 million compared to the same three months of last year. The increase in product sales was attributed to higher sales volumes under the company’s off-take contract with DONG Energy Thermal Power A/S, which it acquired in connection with the Sampson drop-down transaction in December.

Gross margin was $18.5 million, up $2.7 million from the same quarter of last year. Net income was $2.5 million, compared to $5.5 million during the first quarter of 2016. Adjusted EBITDA was $22.9 million, up $6.3 million or 38.3 percent compared to the first quarter of 2016. Enviva attributed the increases in gross margin and adjusted EBITDA to increased product sales due to the Sampson drop-down and a favorable customer and shipping contract mix. Adjusted gross margin per metric ton was $43.19, up from $40.42 during the first quarter of 2016.

As part of its quarterly financial release, Enviva announced that the partnership has agreed to purchase Enviva Port of Wilmington LLC from Enviva Wilmington Holdings LLC, a joint venture between its sponsor and John Hancock Life Insurance Co., for $130 million. Wilmington owns a deep-water marine terminal in Wilmington, North Carolina. The acquisition is currently expected to close in early October.

According to Enviva, the terminal is capable of receiving product by rail and truck, and can store up to 90,000 metric tons of wood pellets. In addition, its facilities can load panamax-sized vessels. Enviva also noted Wilmington is party to long-term terminal services agreements to receive, store and load approximately 1 million metric tons per year of wood pellets manufactured at the plant in Sampson County, North Carolina, and a third-party plant.

The port is party to a long-term services agreement with the Hancock joint venture’s planned pellet plant in Hamlet, North Carolina, which is expected to begin construction later this year. Once complete, the Hamlet plant is expected to supply pellets to MGT Power’s Teesside Renewable Energy Plant, currently under construction in the U.K. Overall, Enviva said the Wilmington terminal can handle up to 3 million tons of wood pellets per year.

During an investor call, Keppler noted the proposed Hamlet plant will be a replica of the Sampson facility. The facility is expected to be operational during the first half of 2018. According to Keppler, site work on the project has already begun along with equipment procurement.

Keppler also briefly discussed the global pellet market. He said there continues to market developments around the world that underpin strong growth in long-term demand for pellets. This includes developments in Europe and Asia. During the call he described several policy mechanisms in the European Union and Japan that are helping drive development of the biomass power industry and demand for pellets.