EVA - Enviva stock cut in half after lowering guidance eliminating dividend

2023-05-04 08:37:04 ET

Enviva ( NYSE: EVA ) -55% pre-market Thursday after reporting a Q1 net loss of $116.9M, wider than the $45.3M net loss in the year-earlier quarter, and eliminating its quarterly dividend.

Q1 adjusted EBITDA fell to $3.4M from $36.6M in the same period last year, while revenues rose 15% Y/Y to $269M.

Enviva ( EVA ) said it is eliminating the quarterly dividend "in order to preserve liquidity and a conservative leverage profile, maintain our current growth trajectory, potentially accelerate future investments in new fully contracted plant and port assets, and implement a limited share repurchase program."

With the elimination of the dividend, the company expects to retain ~$1B in incremental cash flow through 2026.

Q1 volumes delivered were 20% Y/Y to 1.3M metric tons, but the result was below management expectations of ~1.5M tons, and port cost per metric ton fell by $9 but remained higher than expected.

"We recognize this is an important departure from the plan we laid out at our Investor Day a month ago, but a lot has changed since then," President and CEO Thomas Meth said. "Compared to our expectations, while our cost position has trended in the right direction, it has done so at a much slower pace than we had anticipated, in part due to slower volume growth, and in part due to a higher spend profile for the volume growth we did achieve."

More on Enviva:

• See financial and valuation comparisons to sector peers
• SA analysis: Enviva: A Gift To The Short Sellers
• Stock price return: 56% loss YTD, 75.5% loss in the past 12 months

For further details see: