IRVING, Texas, May 9, 2019 /PRNewswire/ -- Darling Ingredients Inc. (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 customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries, today announced financial results for the 2019 first quarter ended March 30, 2019.
First Quarter 2019 Overview
- Revenue of $835.1 million
- Net income of $18.0 million
- Adjusted EBITDA of $103.4 million
- Difficult winter and North America flooding impacted operations
- Continued strong global raw material volumes, up 2.7 percent year over year
- High global slaughter volumes, China trade disruptions and African Swine Fever (ASF) created lower pricing environment for Feed segment fats and proteins
- Collagen business drove record Food segment earnings
- Diamond Green Diesel ("DGD") JV issued $17.7 million partner dividend in early April
- Launched and priced U.S. Bonds refinance in late March, extending maturity from 2022 to 2027 with more favorable terms
For the first quarter of 2019, the Company reported net sales of $835.1 million, as compared with net sales of $875.4 million for the first quarter of 2018. Net income attributable to Darling for the three months ended March 30, 2019 was $18.0 million, or $0.11 per diluted share, compared to a net income of $97.3 million, or $0.58 per diluted share, for the first quarter of 2018. The year-over-year decrease in net income for the first quarter 2019 is primarily due to the inclusion of the 2017 retroactive blenders tax credit ("BTC") in the results for the first quarter 2018, as compared to no BTC, to date, in 2019. Additionally, lower pet grade protein margins, higher energy costs due to a difficult winter, FX variance and costs associated with North America flooding negatively impacted earnings.
Comments on the First Quarter 2019
"Our teams executed well during the first quarter 2019 despite headwinds impacting our finished product pricing, challenging weather events disrupting some of our operations in North America and African Swine Fever pressuring the global marketplace," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "Global volumes trended higher, the Food segment reported record results, and we delivered overall improved adjusted EBITDA when adjusting the prior year for the BTC and a stronger U.S. dollar."
"Construction is underway on Super Diamond that increases annual production capacity at our Diamond Green Diesel JV to 675 million gallons of renewable diesel plus additional renewable naphtha. We anticipate completion in fourth quarter 2021," Stuewe concluded.
- Feed Ingredients – EBITDA 64.5M (down 5.7%); Revenue $495.8M (up 2.1%); Margin $113.4M (down 2.9%). Raw material processed (up 2.8%).
- Food Ingredients – EBITDA $43.2M (up 32.9%); Revenue $279.2M (down 8.6%); Margin $65.0M (up 15.5%). Raw material processed consistent year-over-year.
- Fuel Ingredients – EBITDA $10.8M (down 57.9%); Revenue $60.1M (down 28.5%); Margin $10.0M (down 58.5%).Raw material processed up 3.3%. Results reflect lack of 2017 retroactive BTC recorded in Q1 2018.
- Diamond Green Diesel Joint Venture (DGD) – EBITDA $0.84 per gallon on 71.1M gallons of sales. On an operating basis, with no hedge loss, entity earned $1.22 per gallon. Averaging Q4 2018 and Q1 2019 EBITDA per gallon results in a net run rate of $1.24 EBITDA per gallon. JV issued $17.7M partner dividend early April 2019. Super Diamond, phase three expansion cost estimate of $1.1 billion expected to be substantially funded by entity's cash flows.
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