Darling Ingredients announces Q3 2023 financial performance
Darling Ingredients Inc., a global leader in sustainable ingredient production, reported a net income of $125.0 million, or $0.77 per diluted share, for the third quarter of 2023. This result comes as a decrease from the $191.1 million, or $1.17 per diluted share, reported in the third quarter of the previous year. The company’s net sales for the third quarter of 2023 were $1.6 billion, which showed a slight dip from $1.7 billion during the same quarter in 2022.
Despite the lower net income, Darling Ingredients highlighted a seasonally strong performance and a return to gross margins comparable to pre-acquisition levels. Randall C. Stuewe, Chairman and Chief Executive Officer, expressed confidence in the company’s current trajectory, noting its well-positioned stance as it approaches the end of the fiscal year and looks toward 2024.
For the nine-month period ending September 30, 2023, the company’s net sales increased to $5.2 billion from $4.8 billion in the same period last year. However, net income slightly decreased to $563.2 million, or $3.47 per diluted share, from $581.1 million, or $3.54 per diluted share, during the same timeframe in 2022.
Darling Ingredients also reported on the performance of Diamond Green Diesel (DGD), its joint venture in renewable diesel. DGD sold 266.8 million gallons of renewable diesel in the third quarter at an average EBITDA of $0.65 per gallon. Year-to-date sales reached 910.0 million gallons at an average EBITDA of $1.02 per gallon. Despite volatile global petroleum markets and declining RINs and LCFS prices, DGD’s performance exceeded investment case returns, according to Stuewe.
The combined adjusted EBITDA for the third quarter stood at $334.3 million, compared to $394.7 million in the same quarter of the previous year. The year-to-date figure reached $1.26 billion, marking an increase from $1.13 billion in the same period in 2022.
As of September 30, 2023, the company’s financial health appeared stable, with $119.0 million in cash and cash equivalents and $1 billion in available credit. Total debt was reported at $4.4 billion, with a leverage ratio of 3.25X. Capital expenditures for the third quarter totaled $146.2 million, climbing to $380.6 million for the nine-month period.
Darling Ingredients has projected a combined adjusted EBITDA of $1.6 to $1.7 billion for the fiscal year 2023, reinforcing the company’s resilience in a fluctuating market.
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