Enviva Inc., the world's largest pellet producer, saw its stock valuation plummet by 80 percent after the release of third-quarter results. Stock prices, at one point, had fallen from a 52-week high of $61 to a low of $0.61 last week.

The company announced a comprehensive review of its capital structure in an effort to improve the company’s financial position, and announced a realignment of leadership, which saw Thomas Meth stripped of his CEO title and the appointment of Glenn Nunziata to that role on an interim basis. Less than three months earlier, Munziata had been hired as Chief Financial Officer.

Meth, who continues as President, commented “This was a disappointing quarter as our results came in meaningfully below our expectations due primarily to weakness in commercial activities. Given the significant near-term headwinds we’re addressing, I am focused on engaging with customers to ensure that our contracts reflect the value our product provides customers and returning to a business model centered on predictable, profitable take-or-pay contracts.”

Despite its negative financial results and the management upheaval, the company plans to continue building its $375 million pellet plant Epes, Alabama.

Enviva reported a net loss of $85.2 million for third-quarter 2023, as compared to a net loss of $18.3 million for third-quarter 2022; net loss for third-quarter 2023 included $21.2 million of asset impairments, $22.1 million of interest expense on repurchase accounting, and $6.3 million of restructuring costs that were not incurred during the same period last year.

Reported adjusted EBITDA for third-quarter 2023 of $36.6 million as compared to $60.6 million for third-quarter 2022; adjusted EBITDA for third-quarter 2023 is lower than the same period last year primarily due to lower revenue from commercial activities.

Progressed operational transformation plan:

• Increased metric tons sold by approximately 14% and 10% during third-quarter 2023 as compared to third-quarter 2022 and second-quarter 2023, respectively
• Reduced delivered at port (“DAP”) costs per metric ton (“MT”) for third-quarter 2023 by $9 per MT to $152, down from $161 for second-quarter 2023 (DAP costs not adjusted for net calorific value (“NCV”))
• Realigned leadership positions to strategically focus executive resources and skill sets on highest impact initiatives to address the Company’s most important priorities
• Engaged advisors to assist Enviva with a comprehensive review of alternatives to strengthen its capital structure, augment liquidity, address contractual liabilities, and increase long-term profitability