Darling Ingredients: Reports Q2-2020 Results

Irving / TX. (di) Darling Ingredients Inc., a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries, announced financial results for the three-month (Q2-2020) and six-month (H1-2020) periods ended June 30, 2020. Highlights:

  • Net income of USD 65.4 million, or USD 0.39 per GAAP diluted share
  • Net Sales of USD 848.7 million
  • Combined adjusted Ebitda of USD 195.2 million
  • Core business Ebitda of USD 126.1 million, USD 16 million better than Q1-2020; USD 24 million better than Q2-2019, excluding the USD 13.1 million gain on the sale of assets in Q2-2019
  • Diamond Green Diesel (DGD) earned USD 1.91 Ebitda per gallon on approximately 72 million gallons sold
  • In July, Darling received an USD 80 million distribution from DGD, total distributions received in 2020 is USD 205 million

Darling reported net sales of USD 848.7 million for the second quarter of 2020, as compared with net sales of USD 827.3 million for the same period a year ago. Net income attributable to Darling for the three months ended June 27, 2020 was USD 65.4 million, or USD 0.39 per diluted share, compared to a net income of USD 26.3 million, or USD 0.16 per diluted share, for the second quarter of 2019.

«We had another solid quarter of execution from our employees worldwide who delivered a strong second quarter financial performance, generating USD 195 million of combined adjusted Ebitda,» said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. «Our core business navigated through a turbulent second quarter with our feed segment posting its best quarterly Ebitda of USD 85.2 million in over the last three years. We did benefit from over 40 million pounds of depopulated hog volumes through our processing locations during the quarter.»

«Darling’s diversification provides our global business platform earnings sustainability as demonstrated in the second quarter. Our DGD JV financial performance was impacted by the sharp decline in the energy sector as a result of the Covid pandemic, but still produced good results which were enhanced by a better performance in our feed segment. Excluding the gain on the sale of assets in the food segment from a year ago, this year’s food segment performance was on par to 2019,» added Stuewe.

«We did use the DGD distribution proceeds received in April to pay down our outstanding debt in the second quarter, lowering our leverage ratio to 2.39 as measured by our bank covenant. We remain diligent on our capital expenditures, investing approximately USD 123 million for the first six months of 2020. We continue to target a deferral of 15 percent to 20 percent in capital expenditures as the uncertainty surrounding Covid-19 persists,» commented Stuewe.

The Darling Ingredients Board has approved replenishing the Company’s previously announced share repurchase program back to USD 200 million of availability and have extended the term of the program for an additional two years to August 13, 2022, to be exercised depending on market conditions. The repurchases may be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. Repurchases may occur over the authorized period unless extended or shortened by the Board of Directors.

In accordance with the distribution policy at Diamond Green Diesel, Darling received an USD 80 million distribution from DGD in July 2020. Total distributions received in the first six months of 2020 total USD 205 million.

For the six months ended June 27, 2020, Darling reported net sales of USD 1.7 billion, as compared with net sales of USD 1.7 billion for the same period of 2019. Net Income attributable to Darling for the first six months of 2020 was USD 150.9 million, or USD 0.90 per diluted share, as compared to a net income of USD 44.3 million, or USD 0.26 per diluted share, for the first six months of 2019.

As of June 27, 2020, Darling had USD 76.2 million in cash and cash equivalents, and USD 939.7 million available under committed revolving credit agreements. Total debt outstanding at the end of the second quarter of 2020 was USD 1.6 billion.

Combined adjusted Ebitda was USD 195.2 million for the second quarter of 2020, compared to USD 159.4 million for the same period in 2019. On a year-to-date basis, combined adjusted Ebitda totaled USD 408.5 million for 2020, compared to USD 292.7 million on a year-to-date basis for 2019.

For additional information please read the Company’s PDF file below (121 KB):

20200806-DARLING-Q2-2020.

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