- Despite their impressive share price performance, I have not been a fan of the dividends offered by Enviva due to historically being oversized relative to their cash flow performance.
- They completed their corporate restructuring during the fourth quarter of 2021, which saw their financial statements recast, and as a result, they saw massive changes to their operating cash flow.
- Compared to their non-recast results during the first nine months of 2021, their recast operating cash flow is down a massive 80%, which appears to mostly arise from intercompany eliminations.
- When looking ahead, their guidance for 2022 appears to utilize their non-recast results as a basis, thereby making their outlook difficult to ascertain, especially for their operating cash flow.
- Since their new record high dividend payments stand to cost way more than seems reasonable to expect for their operating cash flow, I believe that maintaining my sell rating is appropriate.
For further details see:
Enviva: Accounting Complexities Make Their 2022 Outlook Difficult