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Enviva Partners (EVA) Q1 2021 Earnings Call Transcript

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EVA earnings call for the period ending March 31, 2021.

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Enviva Partners (EVA)
Q1 2021 Earnings Call
Apr 29, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good morning, and welcome to the Enviva Partners LP first-quarter 2021 earnings conference call. [Operator instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kate Walsh, vice president of investor relations. Please go ahead.

Kate Walsh -- Vice President of Investor Relations

Thank you. Good morning, everyone, and welcome to Enviva Partners' first quarter of 2021 earnings conference call. We appreciate your interest in Enviva Partners, and thank you for participating today. On this morning's call, we have John Keppler, chairman and CEO; and Shai Even, chief financial officer.

Our agenda will be for John and Shai to discuss our financial results and provide an update on our current business outlook and operations. Then we will open up the call for questions. During the course of our remarks and subsequent Q&A session, we will be making forward-looking statements, which are subject to a variety of risks. Information concerning the risks and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements can be found in our earnings release as well as in our other SEC filings.

We assume no obligation to update any forward-looking statements to reflect new or changed events or circumstances. In addition to presenting our financial results in accordance with GAAP, we will also be discussing adjusted EBITDA and certain other non-GAAP financial measures pertaining to completed fiscal periods as well as our forecast. Information concerning the reconciliations of these non-GAAP measures to their most directly comparable GAAP measures and other relevant disclosures are included in our earnings release. I would now like to turn the call over to John.

John Keppler -- Chairman and Chief Executive Officer

Thank you, Kate. Good morning, everyone, and thanks for joining us today. As a nation, we're just coming off a week celebrating sustainability, punctuated by the 51st anniversary of Earth Day. Tomorrow is Arbor Day, a worldwide celebration of the importance of trees.

And six years ago this very morning, units of Enviva Partners LP began trading on the New York Stock Exchange. That's quite a confluence of events. When we launched the company, few could have imagined the importance the sustainable biomass business we set out to build would ultimately have on the global and urgent effort to fight climate change by helping countries around the world, ones that now include the United States, achieve their goals of reducing greenhouse gas emissions. As recent headlines remind us, healthy growing forests remain one of the most critical tools in the fight to mitigate climate change.

The markets we help create for low-value wood are a key reason why forests continue to grow. The facts are impressive. As our Track & Trace data detail, of the thousands of tracks from which we have purchased wood, just over 30% of the harvested volume went to Enviva, while the remaining almost 70% went to other participants in the forest product sector, like sawmills and furniture manufacturers. We make it a contractual condition for landowners to replant following any harvest where Enviva purchases fiber.

USDA Forest Inventory data will tell you that in the time since we began operations, we have seen an increase in forest inventory of more than 300 million tonnes of trees in our own catchment area. And that's after deducting the 21 million tonnes of wood pellets we have produced and all of the other forest products produced from this renewable resource during the same time. That data should make every one of our stakeholders proud to be a part of the job we're doing, displacing coal, growing more trees, and fighting climate change. Given that profound positive impact, it's no surprise that demand for our product continues to grow and our business along with it.

This past quarter was no different. In what is typically our seasonally soft period, we sold over 1.1 million metric tons of wood pellets, our second-highest quarterly deliveries in our history. And we generated $46.3 million in adjusted EBITDA, a 59% increase over the same period last year. And we did so with the consistency and reliability you have come to expect from us, keeping our people healthy, our operations running and our customer deliveries uninterrupted despite the continuing backdrop of the coronavirus pandemic.

Based on our solid start to 2021 and the performance we are forecasting for the remainder of the year, the board declared a distribution of $0.785 per unit for the first quarter, a 15% increase over the distribution paid for the same quarter of last year. This represents our 23rd consecutive distribution increase since our IPO. We also reaffirmed our full-year 2021 guidance, including an adjusted EBITDA range of $230 million to $250 million and distributions of at least $3.17 per unit for full-year 2021 before accounting for the benefit of any future drop-down transactions or third-party acquisitions. We were able to drive these improvements in operating and financial performance by executing against the key pillars of our growth you've heard us describe.

These include organic growth and productivity increases within our fully contracted assets, capacity expansions at our Northampton and Southampton plants, and increased production from our recently acquired Greenwood and Waycross plants. Compared to this time last year, we have increased the partnership's production capacity by close to 40%. And that number is expected to continue to grow as we complete these efforts and implement the multiplant expansions we announced during our conference call last quarter. Growth in our production capacity and volume is underpinned by the partnership's revenue backlog, which now totals $14.5 billion, with a weighted average remaining contract term of 12.8 years.

When combined with additional contracts held at our sponsor, including the new contract with a major Japanese utility we announced yesterday, the total weighted average remaining term and revenue backlog would increase to approximately 14 years and $20 billion, respectively. Part of that incremental backlog is earmarked for the sponsor's Lucedale plant in Pascagoula terminal. Construction of these facilities is expected to be complete around the middle of the year. With powerful net-zero commitments made by governments around the world, there is no shortage of new markets and new commercial opportunities ahead for the partnership.

I will spend some time later in the call outlining our growing customer contract pipeline and the underlying actions being taken by governments and industry in key jurisdictions to progress the substantial decarbonization initiatives required to meet their binding emissions reduction targets. But now I'd like to turn it over to Shai to share more detail on our Q1 results and financial highlights.

Shai Even -- Chief Financial Officer

Thank you, John, and good morning, everyone. As John mentioned, we reported solid results for the first quarter of 2021. During the quarter, our business benefited from incremental production and sales related to acquisitions and operational improvements executed in 2020. Typically, we experience higher seasonality during the first quarter of the year as compared to subsequent quarters as colder in winter weather modestly increases cost of procurement and production at our plants.

Nonetheless, the partnership achieved financial results substantially in line with management's expectations. In terms of net revenue for the fourth quarter of 2021, we generated $241 million, which represents an increase of close to 18% as compared to $204.5 million for the corresponding quarter of 2020. The significant increase in net revenue is a result of incremental product sales and a $9.9 million increase in other revenue. Included in other revenue for the first quarter of 2021 were $16.5 million in payments to the partnership for adjusting deliveries under our take-or-pay off-take contracts, which otherwise would have been included in product sales.

Adjusted gross margin per metric ton was $42.73 for the first quarter of '21, which represents an increase of close to 29%, as compared to $32.15 per metric ton for the corresponding period of 2020. The increase in adjusted gross margin per metric ton was primarily attributable to higher pricing due to customer contract mix. Net loss for the first quarter of 2021 was $1.5 million, as compared to net income of $7.6 million for the first quarter of 2020. Adjusted net income was $7.4 million for the first quarter of 2021, as compared to adjusted net income of $9.1 million for the corresponding quarter in 2020.

As John highlighted, the partnership generated for the first quarter of 2021 adjusted EBITDA of $46.3 million, an increase of 59% from the first quarter of 2020. The significant increase in adjusted EBITDA was driven primarily by higher sales volumes and higher pricing, partially offset by higher cost of goods sold associated with the increased seasonality I mentioned. Distributable cash flow prior to any distributions attributable to incentive distribution rights was $30.4 million, which represents over a 60% increase from the corresponding quarter in 2020 and results in the first-quarter 2021 distribution coverage ratio of 0.7 times. At the end of the first quarter, we had liquidity of approximately $187 million, which included cash on hand and availability under our previous $350 million revolving credit ability.

As many of you have seen, we announced an amendment to this credit facility last week, where we increased the revolver to $525 million and extended the maturity until April 2026. We also achieved a low cost of capital, shaving 25 basis points off the borrowing rate. We view the amended credit facilities as a strong reflection of the increased scale, diversification, and tremendous market opportunities ahead for Enviva. Our increased revolver not only provides the partnership with added flexibility for financing future growth projects but also enhances accretion metrics of upcoming opportunities.

We now have a lower cost of borrowings on a larger scale. And as we have indicated before, we expect to have the opportunity to acquire fully contracted assets of our sponsor such as Lucedale plant and the Pascagoula terminal. Enviva's commitment to conservatively managing its balance sheet is unchanged. We continue to expect to fund drop-downs, acquisitions, and major expansions using 50% equity and 50% debt.

We also continue to target a conservative leverage ratio of 3.5 times to four times and a distribution coverage ratio of 1.2 times on a forward-looking annual basis. Pivoting now to our 2021 guidance. As John touched on, the partnership reaffirmed its full-year 2021 guidance, which does not account for contributions from any potential acquisitions. As we have said in the past, seasonality, customer mix, and timing of shipments can impact results and cause variances from quarter to quarter.

We expect the shape of our adjusted EBITDA for the year to look similar to 2019 and 2020, with second-quarter results being similar to those of first quarter and the second half of 2021 being materially higher than the first half. Additionally, we expect fourth-quarter results to be a significant step-up from the third quarter. Our confidence in achieving our guidance this year is underpinned in part by the benefits we expect to realize from our mid-Atlantic expansion. For 2021, we are focusing to achieve $20 million out of the $30 million annual adjusted EBITDA run rate we expect from the mid-Atlantic expansion weighted heavily to the back half of the year.

Additionally, with respect to Japanese contracts we acquired as part of the Waycross and Greenwood acquisition in 2020, we expect delivery to commence this year related to 350,000 metric tons per year. This is projected to provide uplift to our second-half results as compared to the first half. We are also excited about the Greenwood plant capacity expansion from 500,000 metric ton per year to 600,000 metric tons per year, which is on schedule for completion by the end of the year. Finally, we are making good progress with the multiplant expansions we announced last quarter.

On the basis of total investment amount of $50 million, we believe we will generate an additional $20 million of annual run-rate adjusted EBITDA as these projects are completed and fully ramped by the end of 2022. Over time, as our top line continues to increase, we expect our operating cost position to decline as we achieve incremental economies of scale within our assets and continually implement process and cost improvements. This cycle should continue to provide durable margin expansion year-over-year and add to the strong financial platform we operate today. Now I would like to turn it back to John.

John Keppler -- Chairman and Chief Executive Officer

Thanks, Shai. The tremendous growth in our business continues to be driven by the commitment and significant progress made by regulators, policymakers, utilities, and power generators around the globe to phase out coal, limit the impact of climate change, and cut greenhouse gas emissions to achieve net-zero by 2050. As you may have seen last week, the EU Commission released its taxonomy, which is the centerpiece of the EU's sustainable investment strategy and one of the key mechanisms used to implement and finance the European Green Deal. The new taxonomy recognizes bioenergy used for power and heat, alongside other renewables like wind and solar, is making a substantial contribution to climate change mitigation, underscoring the indispensable role of biomass in the EU energy transition.

The United Kingdom has long been a leader in using biomass to phase out coal usage and recently published its new industrial decarbonization strategy, a blueprint for delivering the world's first low-carbon industrial sector. The report makes it clear that the U.K. government foresees an important role for biomass in the decarbonization of industry, especially when combined with carbon capture and storage. The concept, called BECCS, is increasingly perceived as one of the most critical tools in the effort to achieve net-zero, since it is one of the only technologies capable of delivering energy with negative greenhouse gas emissions at scale and available today.

One of Enviva's U.K.-based customers, Drax, commissioned an independent analysis, which concluded that without BECCS at Drax, the energy system would incur additional costs of around GBP 4.5 billion to achieve the U.K. government's goals due to having to employ other more difficult and costly solutions. Similarly, Orsted, Enviva's largest customer in Denmark, is working with Microsoft and Aker Carbon Capture to explore ways to support the development of carbon capture and storage at Orsted's biomass-fired combined heat and power plants in Denmark. The Danish economic counsel expects BECCS to play a significant role in achieving the country's target of a 70% greenhouse gas in this introduction by 2030 and considers the technology critical to a cost-competitive energy transition.

In the Netherlands, the primary focus of Dutch energy policy is also the reduction of greenhouse gas emissions. And the country is one of the first in the EU to announce plans to eliminate natural gas from its energy mix. The current government coalition is committed to a 49% reduction in greenhouse gas emissions by 2030, surpassing the existing EU target. Biomass is already the largest source of renewable energy in the Netherlands.

And Enviva is advancing multiple contract discussions with new customers under agreements which could extend to 12 years or longer, which would further expand the delivery of our product into the Dutch power and heating markets. As an update on Germany, following last year's formal adoption of the Coal Exit Law, regulations for long-term financial support for electricity and heat conversions from fossil fuels to biomass are expected to be announced midyear as part of the government's priority initiatives. We expect that when complete, these will pave the way for Enviva to finalize commercial discussions already under way with a number of major German utilities and heat and power generators. Utilities have long been the prime consumers of biomass in Europe, but the global industrial sector is becoming an emerging market for Enviva, where steel mills, cement factories, and chemical plants are evaluating large-scale of coal to biomass switching.

As we highlighted in our press release, Enviva recently delivered test volumes to a large industrial conglomerate in Europe to pilot biomass as a replacement for metallurgical coal in its steelmaking operations. Favorable policy tailwinds in Japan continue to support further investment in this growing market. For instance, the Japanese Ministry of Economy, Trade and Industry, or METI, is working to revise the strategic energy plan by mid-2021. The ruling Liberal Democratic Party's renewable energy caucus has commented that the share of renewable power in its 2030 energy mix should increase from a range of 22% to 24% under the current plan to at least 45%.

This effort complements METI's focus on phasing out inefficient coal-fired plants by 2030. Increasing the use of biomass is one of the most cost-effective ways for generators to increase thermal efficiency and extend plant lives. That should be good for business in a country where we are the largest and leading supplier of sustainably sourced biomass. Finally, last week, President Biden committed to achieve a 50% reduction in greenhouse gas emissions in the United States by 2030, with an emphasis on American workers and industry tackling the climate crisis.

This new target contemplates expanding carbon capture in industrial processes for cleaner steel and cement and enhancing carbon sinks like our forests. As I described earlier on the call, the contracted backlog of the partnership and the sponsor now totals approximately $20 billion, with a weighted average contract maturity of about 14 years. And while part of that revenue backlog will be served by the sponsor's Lucedale plant and Pascagoula terminal, our sponsor also continues to progress the development of a fully contracted plant in Epes, Alabama. With respect to this development, our sponsor recently acquired a facility adjacent to the Epes site and is currently reengineering its existing infrastructure to reduce plant total capital cost and potentially expand the initial phase of construction to more than 1 million metric tons per year, making the facility the largest plant in the world.

Further, our sponsor recently advanced a site it controls in Bond, Mississippi to the next phase in its development. This plant would be designed to produce between 750,000 and more than 1 million metric tons per year. With the tremendous growth we have achieved, coupled with what we see ahead, we will continue to ensure that our wood pellets remain sustainably produced from forests whose inventories have and continue to grow over time. Enviva's practices and internal standards are designed to meet or exceed the established international safeguards and regulations promulgated under RED II and reinforced by the recent report issued in January by the EU Joint Research Center, which emphasizes, among other things, the maintenance of long-term production capacity of the forest.

Our Track & Trace system and our leading responsible sourcing policy provide us with the tools we need to set public transparent goals regarding how we manage, measure, and improve our activities. We also subject ourselves to stringent third-party annual audits to ensure that our operations continue to be certified under independent, globally recognized sustainability standards like FSC, PEFC, SFI, and SBP. To that end, you may have seen the goals we just released for our 2021 Implementation Plans under our RSP and our report on the progress we are making with our partnership with The Longleaf Alliance, protecting and restoring longleaf pine forest, one of the most biodiverse ecosystems in North America. Consistent with our mission to displace coal, grow more trees and fight climate change, we and our sponsor are also making progress toward our goal of becoming net-zero in greenhouse gas emissions from our own operations by 2030.

I hope you saw our partnership with MOL on our joint development of a low-carbon bolt carrier and our signing of the Sea Cargo Charter, promoting decarbonization in international shipping. We expect to announce additional important actions during the course of this year, specifically targeting additions to our renewable energy usage at our production sites and reduction and offsets of the emissions within the assets we operate. So in closing, the tailwinds for our business are robust. The world continues to want less carbon more quickly and more cost-effectively.

This quarter again demonstrates the power of the fully contracted business model we have built to serve those markets, delivering solid results and significantly increased financial performance over the same period last year and continuing our uninterrupted track record of stable quarterly per unit distributions that reliably increase over time. For those who have heard me say for the now 6 years since our IPO, you know I'm fond of stating that we are just getting started. I am privileged to say that this is still very much the case. And we look forward to sharing our progress, our growth, and the opportunities ahead as we connect again soon.

Thank you for listening. Operator, can you please open the line for questions?

Questions & Answers:


Operator

[Operator instructions] Our first question today will come from Pavel Molchanov with Raymond James. Please go ahead.

Pavel Molchanov -- Raymond James -- Analyst

Thanks for taking the questions. Let me start off by asking about demand in your core markets, U.K., Denmark, Belgium. All three countries were in lockdown, at least partially for all of Q1. There is some reopening taking place in kind of April, May time frame.

How much did the business closures impact electricity demand and, ultimately, usage of pellets?

John Keppler -- Chairman and Chief Executive Officer

Pavel, great to hear you, and thank you very much for the question. As we have, frankly, been very privileged to report during the broader pandemic, which unfortunately continues to persist in many parts of the world, we haven't seen any interruptions in demand. Our customers themselves are, of course, core baseload power and heat suppliers in these markets, and demand continues to just pace. All of our production capacity is contracted under long-term take-or-pay obligations, and we continue to be in a position to report that.

During the life of the company's existence, all the way back a little bit more than 11 years now, every single customer has taken every single delivery, and we continue to see that progressing. So very little observable dislocation in any of our markets due to the coronavirus pandemic. And of course, our own operations continue uninterrupted as well.

Pavel Molchanov -- Raymond James -- Analyst

Maybe I'll ask the same question in relation to your brand-new market in Japan. As of just last week, about a quarter of Japan, including Tokyo and Osaka, are in lockdown. Do you envision that having any impact on your kind of initial year of sales into the Japanese market?

John Keppler -- Chairman and Chief Executive Officer

No. Not at all. We're very proud to report some of our first vessels under long-term contracts getting out of our ports through the canal. Of course, very different experience than the folks on the Suez Canal.

We're very, very pleased with what we've been able to deliver, consistent, reliable, ratable deliveries from our Southeast production into Japan. And we don't expect any dislocations there either.

Pavel Molchanov -- Raymond James -- Analyst

OK. And then lastly, let me touch on your biz dev activities in the press release. You highlighted Poland as your focal point for kind of incremental supply contracts in Europe. Why Poland? And how quickly perhaps can we expect to see an announcement?

John Keppler -- Chairman and Chief Executive Officer

Well, Pavel, thank you. And I'd add Poland in terms of the markets that we think are emerging and attractive, frankly, any of the industrialized nations of the world that are committed to broadscale reduction in greenhouse gas emissions. And so naturally as a member of the EU, Poland being the largest per capita user of coal, very, very important market. The pressure of certainly the EU ongoing expectations about net-zero by 2050 make the large installed coal-fired power fleet in Poland very, very attractive.

They have been a biomass user historically. They've made some very important commitments to decarbonization, to migrating not only the large-scale coal assets. They do some coal firing today, increasing those rates. But also, as you may have heard us talk about in the past, the hundred-or-so municipal commodity and power assets that are all coal-fired today really focus on converting those away from coal in favor of biomass.

To that market, I would certainly -- and to the broader EU market, I would certainly add, obviously, the continued growth that we see in Japan and Taiwan as well. Taiwan is a similar nation to Japan, important imports, resources, heavy utilization of coal with few natural decarbonization opportunities. And so we're excited about the opportunity to see development in that market as well.

Pavel Molchanov -- Raymond James -- Analyst

Appreciate that response, and thank you.

John Keppler -- Chairman and Chief Executive Officer

Thanks, Pavel.

Operator

Your next question will come from Marshall Carver with Heikkinen Energy Advisors. Please go ahead.

Marshall Carver -- Heikkinen Energy Advisors -- Analyst

Yes. Regarding the distribution coverage, you're -- you talked about wanting 1.2 times coverage over time, striving for that. You've had such large distribution growth, at least on my model. And given your guidance, we have you a bit below that later this year, that longer-term 1.2 target.

How comfortable are you being below that for any length of time? And what's sort of the flexibility around that? I know you have likely additional drop-downs coming down the road, which can get you back up. But what are your thoughts about that? And how should we think about that 1.2 times target over time?

Shai Even -- Chief Financial Officer

Marshall, thank you for the question. I think that when we are looking at the 1.2 times on a forward-looking annual basis, we discussed like when we talked about last quarter about earnings. We just talked about that we were like over 1.2 times when we looked at the results for a full year of distribution in prior year, that's kind of our model. And we do expect, when we're looking at coverage and when the board make decision and distribution, the board is looking at our forecast projections for the year.

So looking for that on a fully annual basis, as John mentioned earlier. That's the same size for this year. And we do expect still that profits and distributable cash flow for 2022 will cover distribution for 2021 by at least 1.2 times.

Marshall Carver -- Heikkinen Energy Advisors -- Analyst

All right. Thank you.

Shai Even -- Chief Financial Officer

Thank you.

Operator

Our next question comes from Elvira Scotto with RBC Capital Markets. Please go ahead.

Elvira Scotto -- RBC Capital Markets -- Analyst

Hi. Good morning, everyone. So with respect to Epes, what sort of cost savings can your sponsor achieve by utilizing the existing infrastructure as you noted in the press release and in your prepared comments?

John Keppler -- Chairman and Chief Executive Officer

Elvira, thanks for the question, and always good to hear from you. The Epes facility -- and any time we have the opportunity to leverage the assets of a large, fully integrated wood products manufacturing facility, again, we have a large integrated woodyard, lots of infrastructure. I think we're still trying to figure out exactly how far that runway goes, but we're really pleased about that opportunity. And our corp dev team did a really fantastic job there.

What this will look a lot like is, frankly, the success we had early on in our development of the Ahoskie facility, which was built on the infrastructure of a former large sawmilling operation. And so that had a great capital investment profile. We're pretty excited about what we can achieve from the facility in Epes. And what that does is, again, it gives us the opportunity to really consider increasing the initial development size from 750,000 metric tons a year to more than a million tonnes a year.

And it will make it the largest plant in the world, which something we can also be proud of.

Elvira Scotto -- RBC Capital Markets -- Analyst

That's helpful. Thank you. And then as your EBITDA continues to grow, and you're going to see some good back half growth, at what point do you think that Enviva EVA will consider developing some of its own projects at the EVA level versus at the sponsor level?

John Keppler -- Chairman and Chief Executive Officer

So, again, another great question. I think you're starting to see us do some of that today, certainly, with the benefit of the successful Northampton and Southampton expansions. We're very, very pleased with capital deployment and the investment multiples that we're able to do internally. As well as the multiplant expansions that we're now under way with, again, where we expect to invest a total of $50 million for the benefit of about an incremental $20 million in adjusted EBITDA on a run-rate basis.

And, of course, the expansion under way at our Greenwood asset, which is on track and will be complete by the end of this year too. So we're trying to be very mindful of the -- certainly, the insulation that we've been able to achieve for the partnership from development risk. But when they're well-defined projects with high-return multiples, you can count on us continuing to take advantage of those.

Elvira Scotto -- RBC Capital Markets -- Analyst

That's great. That's helpful. I have two more questions, one, again related to the sponsor. I mean, at what point do you think the sponsor or EVA adjust IDRs? And then what is the sponsor's kind of longer-term plan for EVA?

John Keppler -- Chairman and Chief Executive Officer

So great questions. And, of course, I can't speak for the sponsor itself, but it did go through a broad recapitalization last year, where the outstanding membership units of the Enviva Holdings entity, which had at the time been held within the Riverstone/Carlyle Renewable and Alternative Energy Fund II. All of those outstanding membership interests were acquired by a group of investors, as we noted in the press release last year, led by Goldman Sachs, Mubadala, and BTG Pactual. And that, of course, is now a single purpose, fund-continuation vehicle.

And so we're -- that was done explicitly to continue to fund the long-term growth and realize and help the company ultimately invest in all of the new infrastructure plant and terminal infrastructure that are required to meet the growing base of demand that we spend a bit of time, again, talking about on our call today. And so the growth profile is quite remarkable. The part -- the sponsor, of course, also added the green term loan earlier in this year, further reducing its cost of capital and enabling long-term investments into those assets. As you may recall, that initial recapitalization last year with the fund continuation vehicle also included about $300 million in standby equity that remains on call.

So the sponsor continues to be very, very focused and very tightly aligned with creating, obviously, fully contracted assets that are ultimately made available to the partnership for highly accretive acquisitions and drop-down transactions like we've been successful in undertaking for the six years since our IPO. And we don't expect that trend to, in any way, ameliorate.

Elvira Scotto -- RBC Capital Markets -- Analyst

Great. And then, sorry, just the very last question, just because it's in your press release and you discussed it and just out of curiosity. With respect to the comments in the U.S., given President Biden's comments, so what do you see as the potential opportunity for EVA in the U.S.?

John Keppler -- Chairman and Chief Executive Officer

It's a great question, Elvira. And what I'd say is, I think our perspective on the U.S. market continues to evolve. The U.S.

has never been a focus of our core business development activities. What we have seen though is, of course, with the transition to the Biden administration and one of their first step's reentering the Paris Climate Change Accord, that, of course, provides some important tailwinds and, frankly, brings the U.S. right back in line with much of the broader worldwide commitment to reducing greenhouse gas emissions. And one of the most important pieces of that and what I heard of interest in some of the remarks were really their focus on carbon capture and sequestration.

And so the ability to think about biomass energy and carbon capture sequestration that the BECCS concept that we've talked about in our release, as well as where people are spending a lot of time around the world, really trying to figure out the best ways to do it, Drax, Orsted being two of our customers kind of leading that, to the extent that, that continues to be an area of focus in the U.S., I do think that creates incremental opportunities, anything that would have been in our business plan prior to that. Again, everything we manufacture today, we manufacture right here in the Southeast U.S. and we export it around the world. We're really proud to be a part of what, frankly, many of the administrations over the last decade are focused on in terms of leveraging U.S.

industry and U.S. capital to solve the worldwide climate change. We're an important part of that today to the extent that some of that can develop here in the U.S. Just a really nice uplift to everything else we would have forecast.

Elvira Scotto -- RBC Capital Markets -- Analyst

Great. Thank you, and great catching up. Thanks a lot.

John Keppler -- Chairman and Chief Executive Officer

Thanks, Elvira.

Operator

[Operator instructions] Our next question will come from Heidi Hauch with Barclays. Please go ahead.

Heidi Hauch -- Barclays -- Analyst

Good morning, and congrats on another successful quarter. Just one quick question in terms of plant expansions and particularly the multiplant expansion with the $50 million investment. I know last quarter you highlighted how those expansions were gleaned from the Waycross acquisition. But just curious, are you seeing any incremental opportunity there to continue on that expansion technique across perhaps any of your other plants? Or in other words, is there any other low-hanging fruit to grab there in terms of plant expansion?

John Keppler -- Chairman and Chief Executive Officer

Heidi, great to talk to you. And absolutely, we're pretty excited about that. We do see follow-on opportunities as we look to complete the multiplant expansions. The underlying approach that we're taking, we do think that there's opportunities to continue to roll that out to the rest of the fleet.

And so we're kind of just taking it in appropriate bite sizes. And as we have some of those plans more concretely illustrated so that we can give an appropriate guide, we will absolutely do so.

Heidi Hauch -- Barclays -- Analyst

Great. Thank you.

Operator

Ladies and gentlemen, this will conclude our question-and-answer session. I would like to turn the conference back over to John Keppler for any closing remarks.

John Keppler -- Chairman and Chief Executive Officer

Well, I want to thank everybody for joining us today. Before I close the line, I would be absolutely remiss without formerly extending and offering a very warm welcome to Kate Walsh, whose voice you heard at the beginning of the call, who recently joined us as our VP of Investor Relations. I suspect many of you actually already know her from her career at EnLink Midstream. And we're pretty lucky to have her.

We love talking about this business, and that's certainly true for Kate as well. And I'd encourage you to add Kate to your contacts and feel free to reach out to her as questions or comments about our business and our progress come to mind. In the meantime, of course, you can count on us and, frankly, the entire Enviva team, continuing to work hard every single day to stably, safely, and reliably continue to displace coal, grow more trees and fight climate change. We look forward to talking again soon, and thanks for joining us.

Stay healthy, and have a great day.

Operator

[Operator signoff]

Duration: 43 minutes

Call participants:

Kate Walsh -- Vice President of Investor Relations

John Keppler -- Chairman and Chief Executive Officer

Shai Even -- Chief Financial Officer

Pavel Molchanov -- Raymond James -- Analyst

Marshall Carver -- Heikkinen Energy Advisors -- Analyst

Elvira Scotto -- RBC Capital Markets -- Analyst

Heidi Hauch -- Barclays -- Analyst

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Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

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