Darling Ingredients: Reports Q3-2023 Financial Results

Irving / TX. (di) Darling Ingredients Inc. reported net income of USD 125.0 million, or USD 0.77 per diluted share for third quarter of 2023, compared to net income of USD 191.1 million, or USD 1.17 per diluted share, for third quarter of 2022. The company also reported net sales of USD 1.6 billion for the third quarter of 2023, compared with net sales of USD 1.7 billion for the same period a year ago.

«Our core business continues to perform extremely well. We had seasonally strong performance during the third quarter and were able to return gross margins to pre-acquisition levels,» said Randall C. Stuewe, Darling Ingredients Chairman and Chief Executive Officer. «The company has good momentum as we close out the year and is well positioned heading into 2024.»

For the nine months ended Sept. 30, 2023, Darling Ingredients reported net sales of USD 5.2 billion, compared to net sales of USD 4.8 billion for the same period in 2022. Net income for the first nine months of 2023 was USD 563.2 million, or USD 3.47 per diluted share, as compared to net income of USD 581.1 million, or USD 3.54 per diluted share, for the first nine months of 2022.

Diamond Green Diesel (DGD) sold 266.8 million gallons of renewable diesel for the third quarter 2023 at an average of USD 0.65 per gallon Ebitda. Year-to-date, DGD has sold 910.0 million gallons of renewable diesel at an average of USD 1.02 per gallon Ebitda. During the third quarter, Darling Ingredients received USD 62.2 million in cash dividends from the joint venture, and USD 163.6 million in cash dividends year to date.

«Extreme volatility in the global petroleum market and swift declines in RINs and LCFS prices created headwinds in our Fuel business during 3Q,» Stuewe said. «A recent decline in fat prices have shown that new renewable diesel capacity is not coming on line as soon as projected. Despite these headwinds, DGD is still performing above investment case returns.»

Combined adjusted Ebitda for the third quarter 2023 was USD 334.3 million, compared to USD 394.7 million for the same period in 2022. On a year-to-date basis, combined adjusted Ebitda totaled USD 1.26 billion, as compared to USD 1.13 billion for the same period in 2022.

As of Sept. 30, 2023, Darling Ingredients had USD 119.0 million in cash and cash equivalents, and USD 1 billion available under its committed revolving credit agreement. Total debt outstanding as of Sept. 30, 2023, was USD 4.4 billion. The leverage ratio as measured by the company’s bank covenant was 3.25X as of Sept. 30, 2023. Capital expenditures were USD 146.2 million for the third quarter 2023, and USD 380.6 million for the first nine months ended Sept. 30, 2023.

The company guidance for fiscal year 2023 is USD 1.6 to USD 1.7 billion combined adjusted Ebitda.

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