Darling Ingredients Inc. Reports Third Quarter 2018 Financial Results
Board Increases Share Repurchase Program up to $200 Million of Common Stock
Diamond Green Diesel JV Completes Expansion Turnaround,Announces Super Diamond Phase III Growth Plans to Include Additional Renewable Naphtha
IRVING,Texas,Nov.7,2018 -- Darling Ingredients Inc. (NYSE: DAR),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 the pharmaceutical,food,pet food,feed,industrial,fuel,bioenergy,and fertilizer industries,today announced results for the 3Q18 ended September 29,2018.
Revenue $812.6M versus $936.3M 3Q17
Net loss $(6.0)M,or $(0.04) per GAAP diluted share
Adjusted EBITDA - $97.0M
Debt paydown - $12.0M
Diamond Green Diesel (DGD) extended downtime strongly influenced results with higher costs and lower volumes; pressured fat selling prices
Record slaughter volumes created ample supplies of fats and proteins
China trade disputes pressuring global trade flows of animal proteins
Food segment stabilized,Fuel segment delivered improved results without Blenders Tax Credit (BTC)
DGD expansion online early October at nameplate 275M gallons annual capacity
DGD JV approved Super Diamond Phase III expansion to 675M total gallons annually plus additional renewable Naphtha
Net loss reflects lower finished product selling prices and an increase in cost of sales from inventory write downs of approximately $7.2M from lower market values caused by African Swine Fever outbreak.
"We clearly delivered lower than expected results in 3Q. Extended downtime at DGD largely influenced results and reshuffling our supply chain for fats and used cooking oil impacted feed segment. China trade disputes,record global grain stocks and a stronger U.S. dollar weighed on finished product pricing," said Randall C. Stuewe,Chairman and Chief Executive Officer of Darling Ingredients Inc. "The silver lining is we had record raw material volumes globally,and DGD is fully operational. We expect to produce 65-70M gallons in Q4 with spot margins above $1.25 per gallon.
"Feed segment impacted by lower pricing environment and deflationary lag in our U.S. raw material formulas combined with an inventory write down of Chinese plasma related to ASF. Food segment improved sequentially and delivered consistent year-over-year results with solid performance from our Rousselot collagen platform and higher sales volumes in China. Fuel segment,strong volumes supported improved performance across Europe offset slightly weaker results in North American biodiesel due to lower RIN pricing and the absence of the BTC,which we remain optimistic it will re-instate late 4Q18."
"We continue to execute our World of Growth strategy,growing our core business and acquired Arkansas-based Triple – T Foods in early October. The acquisition further expands our premium protein business in the growing specialty pet food industry. We are excited to announce board approval for Phase III Super Diamond expansion to 675 million annual gallons of renewable diesel with construction of a second independent parallel plant,construction of a new renewable Naphtha,or green gasoline,plant and improved logistics capability. Total estimated cost is approximately $1.1B. Completion expected in 4Q of 2021. Margins remain attractive,and we look forward to meeting increased demands for sustainable low-carbon fuel and capturing higher LCFS margins from our increased capacity," concluded Mr. Stuewe.
Feed Ingredients – EBITDA $59.2M (down 27%); Revenue $482.7M (down 16.1%); Margin $98.9M (down 21.5%). Raw material processed up 6.4%.
Food Ingredients – EBITDA $32.7M (down 5.5%); Revenue $265.2M (down 11.3%); Margin $54.5M (down 9.5%). Raw material processed consistent.
Fuel Ingredients – EBITDA $13.9M (up 71.6%); Revenue $64.6M (up 4.4%); Margin $11.1M (up 46.1%). Raw material processed up 3.6%
DGD JV – EBITDA $0.04 per gallon without BTC.
Contact:
Melissa Gaither,VP IR,Global Communications
mgaither@darlingii.com
972-281-4478
