Darling Ingredients: Reports Q2-2024 Financial Results

Irving / TX. (di) Darling Ingredients Inc. reported net income of USD 78.9 million, or USD 0.49 per diluted share for the second quarter of 2024, compared to net income of USD 252.4 million, or USD 1.55 per diluted share, for the second quarter of 2023. The decrease in net income was primarily due to a sharp year-over-year decline in fat prices and lower earnings within Diamond Green Diesel (DGD). The company also reported net sales of USD 1.5 billion for the second quarter of 2024, compared with net sales of USD 1.8 billion for the same period a year ago, reflecting lower finished product pricing.

«Despite a deflationary commodity market and an uncertain regulatory environment during the second quarter, our specialty ingredients business showed sequential improvement as it made the necessary changes to improve margins and earnings. DGD had a good quarter, while the Port Arthur facility completed a major turnaround as we prepare to produce sustainable aviation fuel later this year,» said Randall C. Stuewe, Chairman and CEO. «Our focus for the balance of the year remains on paying down debt and widening margins through effective cost cutting. We remain very optimistic, as we have seen fat prices begin to improve, which should be reflected in our third and fourth quarter earnings.»

For the six months ended June 29, 2024, Darling Ingredients reported net sales of USD 2.9 billion, compared to net sales of USD 3.5 billion for the same period in 2023. Net income for the first six months of 2024 was USD 160.0 million, or USD 0.99 per diluted share, as compared to net income of USD 438.2 million, or USD 2.69 per diluted share, for the first six months of 2023.

DGD sold 311.5 million gallons of renewable diesel for the second quarter 2024 at an average of USD 0.49 per gallon Ebitda. On July 18, 2024, Darling Ingredients received a USD 77.1 million cash dividend from Diamond Green Diesel.

Combined adjusted Ebitda for the second quarter 2024 was USD 273.6 million, compared to USD 508.3 million for the same period in 2023. On a year-to-date basis, combined adjusted Ebitda totaled USD 553.7 million, as compared to USD 926.7 million for the same period in 2023.

The company repurchased approximately 807,000 shares of its common stock during the second quarter of 2024 for approximately USD 29.2 million. On June 21, 2024, the Board of Directors refreshed the amount of the share repurchase program back up to an aggregate amount of USD 500 million and extended this program until August 13, 2026.

As of June 29, 2024, Darling Ingredients had USD 121.6 million in cash and cash equivalents, and USD 814.4 million available under its committed revolving credit agreement. Total debt outstanding as of June 29, 2024, was USD 4.4 billion. The projected leverage ratio as measured by the company’s bank covenant was 4.24X as of June 29, 2024. Capital expenditures were USD 98.0 million for the second quarter 2024, and USD 191.7 million for the first six months ended June 29, 2024.

The company reaffirms guidance for fiscal year 2024, which remains at USD 1.3 to 1.4 billion combined adjusted Ebitda.