Darling Ingredients: Reports Q3-2020 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 (Q3-2020) and the nine months (9M-2020) ended September 26, 2020.

Q3-2020 Financial Results

Darling reported net sales of USD 850.6 million for the third quarter of 2020, as compared with net sales of USD 842.0 million for the same period a year ago. Net income attributable to Darling for the three months ended September 26, 2020 was USD 101.1 million, or USD 0.61 per diluted share, compared to a net income of USD 25.7 million, or USD 0.15 per diluted share, for the third quarter of 2019.

«Better results in our food segment combined with a strong performance in our international fuel segment, drove the results for our best quarterly performance of 2020,» said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. «We continue to see improved margins in our global rendering through better cost management and our hydrolyzed collagen sales most affected by the economic impact of Covid have seen a solid turnaround.»

«DGD had record sales volume of 80 million gallons for the third quarter as our vertically integrated supply chain that supports the lowest cost production system and the lowest carbon scoring feedstocks in North America continued to produce strong results. The plant turnaround in October was completed on schedule as we look to finish up 2020 on a positive note producing 285 million gallons of renewable diesel for the year,» Stuewe added.

«Our balance sheet remains strong as we paid down our outstanding term loan B by USD 145 million during the third quarter. Our leverage ratio as measured by our bank covenant was 1.93 at the end of the third quarter as we continue to work on achieving an investment grade rating in the future. Our capital expenditures stood at approximately USD 185 million for the first nine months of 2020, as we continue to effectively manage our capital expenditures,» commented Stuewe.

9M-2020 Financial Results

For the nine months ended September 26, 2020, Darling reported net sales of USD 2.6 billion, as compared with net sales of USD 2.5 billion for the same period of 2019. Net Income attributable to Darling for the first nine months of 2020 was USD 252.1 million, or USD 1.51 per diluted share, as compared to a net income of USD 70.0 million, or USD 0.42 per diluted share, for the first nine months of 2019.

In October 2020, Darling acquired a private company that owned rendering plants located in Belgium for approximately USD 29 million. This acquisition adds approximately 50 million pounds of protein meals and 50 million pounds of animal fats to Darling’s capabilities, giving the company a stronger position in rendered poultry products in Belgium.

As of September 26, 2020, Darling had USD 66.0 million in cash and cash equivalents, and USD 934.3 million available under committed revolving credit agreements. Total debt outstanding at the end of the third quarter of 2020 was USD 1.5 billion.

Combined adjusted Ebitda was USD 218.5 million for the third quarter of 2020, compared to USD 147.8 million for the same period in 2019. On a year-to-date basis, combined adjusted Ebitda totaled USD 627.0 million for 2020, compared to USD 440.5 million on a year-to-date basis for 2019.