Darling Ingredients: Reports Q4 and FY-2022 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, reported net income of USD 156.6 million, or USD 0.96 per diluted share for fourth quarter 2022, compared to net income of USD 155.8 million, or USD 0.94 per diluted share, for fourth quarter 2021. The company also reported net sales of USD 1.8 billion for the fourth quarter of 2022, as compared with net sales of USD 1.3 billion for the same period a year ago.

For the 2022 fiscal year, Darling Ingredients reported net income of USD 737.7 million, or USD 4.49 per diluted share, as compared to USD 650.9 million, or USD 3.90 per diluted share for 2021. Net sales for fiscal year 2022 were USD 6.5 billion, as compared with net sales of USD 4.7 billion in 2021.

Combined adjusted Ebitda for the fourth quarter 2022 was USD 413.0 million, compared to USD 306.8 million for the same period in 2021. Fiscal year 2022 combined adjusted Ebitda was USD 1.541 billion, compared to USD 1.235 billion for full year 2021.

Diamond Green Diesel (DGD) sold a record 754 million gallons of renewable diesel for fiscal year 2022, at an average USD 1.18 Ebitda per gallon. DGD began operations at its Port Arthur, Texas, plant in the fourth quarter of 2022, bringing DGD’s total renewable diesel capacity to 1.2 billion gallons per year. On Jan. 31, 2023, the company announced approval of a new sustainable aviation fuel project at Port Arthur, Texas.

«For the fifth consecutive year, Darling Ingredients has delivered superior earnings growth driven by our market presence, vertical integration and diverse, but synergistic segments,» said Randall C. Stuewe, Darling Ingredients Chairman and Chief Executive Officer. «We are well positioned to execute and integrate the investments we have made in our four growth areas: the core rendering business, collagen peptides, green energy in Europe and soon sustainable aviation fuel at Diamond Green Diesel. Our value proposition is simple, we eliminate waste from the meat industry and upcycle those products to their highest value. Darling is not just participating in the circular economy, we are the circular economy.» These acquisitions are key to our vertical integration, company strength and strong market position.

The company’s significant business highlights in 2022 include:

  • Acquired Op de Beeck, a leading organic waste processing company in Belgium, growing the company’s European green energy business;
  • Acquired Valley Proteins, strengthening the core business by adding 18 rendering plants in the southern, southeast and mid-Atlantic regions in the U.S.;
  • Entered into the rendering business in Brazil with the acquisition of FASA Group, adding 14 plants and 1.3 million metric tons of processing;
  • Started up DGD Port Arthur, Texas, plant, bringing the joint venture’s renewable diesel production to 1.2 billion gallons per year;
  • Entered into a definitive agreement to purchase Gelnex in Brazil to grow the company’s food business through increased collagen production;
  • Entered into a definitive agreement to purchase Miropasz, providing the company with access to additional poultry rendering in Poland, Europe’s largest poultry provider; and
  • Signed onto the Science-Based Target initiative, continuing to set a high level for sustainability and advancing the company’s 2050 net-zero goal.

Under the company’s share repurchase program, the company repurchased approximately 336,000 shares of common stock during the fourth quarter of 2022 for a total of approximately USD 22.5 million, bringing the total common stock repurchased for 2022 to approximately 1.9 million shares for a total of approximately USD 125.5 million.

As of December 31, 2022, Darling Ingredients had USD 127.0 million in cash and cash equivalents, and USD 1.3 billion available under its committed revolving credit agreement. Total debt outstanding as of December 31, 2022, was USD 3.4 billion. The leverage ratio as measured by the company’s bank covenant was 2.54X as of December 31, 2022. Capital expenditures were USD 134.1 million for the fourth quarter and USD 391.3 million for fiscal year 2022. The company expects continued growth, and sets guidance for fiscal year 2023 at USD 1.80-USD 1.85 billion combined adjusted Ebitda.