IRVING,
Texas, Oct. 26, 2023 /PRNewswire/ -- Darling
Ingredients Inc. (NYSE: DAR) today released the following statement
regarding 2023 guidance and 2024 outlook.
Volumes in our 50/50 joint venture known as Diamond Green Diesel (DGD), were lower in the
quarter due to a regularly scheduled turnaround and a minor fire
disruption at DGD 2 in St. Charles,
La., which resulted in the unit being offline for 37 days.
We have seen extreme volatility in the heating oil market, which
resulted in a sizeable hedge loss. Additionally, a sell off in D4
RINs coupled with stagnant LCFS prices, produced lower than
anticipated margins at DGD. However, DGD performance annualized
year-to-date is approximately $1.00
EBITDA per gallon.
Darling Ingredients' core business has delivered as communicated
during the Q2 earnings call, slightly lower than Q2 and seasonally
normal for Q3. Our global business remains strong. Volumes were
similar to Q2 and fat prices improved late in the quarter. Gross
margins are solid and reflect the resiliency of our model and the
progress we are making on acquisition integration.
For Q4, we anticipate the core ingredients business to improve
compared to Q3 and DGD volumes to be much stronger as compared to
Q3. DGD faced some strong headwinds in Q3; however, based on spot
margins and if market conditions hold (heating oil prices, RINs and
LCFS), we anticipate DGD margins in Q4 to improve compared to
Q3.
Given current market conditions, we expect the company's
combined adjusted EBITDA for fiscal year 2023 to be between
$1.6 to $1.7
billion.
We carry good momentum into 2024 and anticipate improved
earnings power in our core business and DGD, with significantly
improved cash flow allowing us to achieve our target leverage ratio
of 2.5X by year-end 2024.
About Darling Ingredients
Darling Ingredients Inc.
(NYSE: DAR) is the largest publicly traded company turning edible
by-products and food waste into sustainable products and a leading
producer of renewable energy. Recognized as a sustainability
leader, the company operates more than 260 facilities in over 15
countries and repurposes approximately 15% of the world's meat
industry waste streams into value-added products, such as green
energy, renewable diesel, collagen, fertilizer, animal proteins and
meals, and pet food ingredients. To learn more, visit
darlingii.com. Follow us on LinkedIn.
Cautionary Statements Regarding Forward-Looking Information:
This media release contains includes "forward-looking"
statements that are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied in the statements. Statements that are not statements of
historical facts are forward-looking statements and are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words such as "estimate,"
"guidance," "project," "planned," "contemplate," "potential,"
"possible," "proposed," "intend," "believe," "anticipate,"
"expect," "may," "will," "would," "should," "could," and similar
expressions are intended to identify forward-looking statements.
All statements other than statements of historical facts included
in this release are forward looking statements. Forward-looking
statements are based on the Company's current expectations and
assumptions regarding its business, the economy and other future
conditions. The Company cautions readers that any such
forward-looking statements it makes are not guarantees of future
performance and that actual results may differ materially from
anticipated results or expectations expressed in its
forward-looking statements as a result of a variety of factors,
including many that are beyond the Company's control. Important
factors that could cause actual results to differ materially from
the Company's expectations include: existing and unknown future
limitations on the ability of the Company's direct and indirect
subsidiaries to make their cash flow available to the Company for
payments on the Company's indebtedness or other purposes; global
demands for bio-fuels and grain and oilseed commodities, which have
exhibited volatility, and can impact the cost of feed for cattle,
hogs and poultry, thus affecting available rendering feedstock and
selling prices for the Company's products; reductions in raw
material volumes available to the Company due to weak margins in
the meat production industry as a result of higher feed costs,
reduced consumer demand or other factors, reduced volume from food
service establishments, or otherwise; reduced demand for animal
feed; reduced finished product prices, including a decline in fat
and used cooking oil finished product prices; changes to worldwide
government policies relating to renewable fuels and greenhouse gas
("GHG") emissions that adversely affect programs like the U.S.
government's renewable fuel standard, low carbon fuel standards
("LCFS") and tax credits for biofuels both in the United States and abroad; possible product
recall resulting from developments relating to the discovery of
unauthorized adulterations to food or food additives; the
occurrence of 2009 H1N1 flu (initially known as "Swine Flu"),
highly pathogenic strains of avian influenza (collectively known as
"Bird Flu"), severe acute respiratory syndrome ("SARS"), bovine
spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea
("PED") or other diseases associated with animal origin in
the United States or elsewhere,
such as the outbreak of African Swine Fever in China and elsewhere; the occurrence of
pandemics, epidemics or disease outbreaks, such as the COVID-19
outbreak; unanticipated costs and/or reductions in raw material
volumes related to the Company's compliance with the existing or
unforeseen new U.S. or foreign (including, without limitation,
China) regulations (including new
or modified animal feed, Bird Flu, SARS, PED, BSE or ASF or similar
or unanticipated regulations) affecting the industries in which the
Company operates or its value added products; risks associated with
the DGD Joint Venture, including possible unanticipated operating
disruptions, a decline in margins on the products produced by the
DGD Joint Venture and issues relating to the announced SAF upgrade
project; risks and uncertainties relating to international sales
and operations, including imposition of tariffs, quotas, trade
barriers and other trade protections imposed by foreign countries;
tax changes, such as the introduction of a global minimum tax;
difficulties or a significant disruption in the Company's
information systems or failure to implement new systems and
software successfully; risks relating to possible third party
claims of intellectual property infringement; increased
contributions to the Company's pension and benefit plans, including
multiemployer and employer-sponsored defined benefit pension plans
as required by legislation, regulation or other applicable U.S. or
foreign law or resulting from a U.S. mass withdrawal event; bad
debt write-offs; loss of or failure to obtain necessary permits and
registrations; continued or escalated conflict in the Middle East, North
Korea, Ukraine or
elsewhere, including the Russia-Ukraine war and the Israeli-Palestinian
conflict; uncertainty regarding the exit of the U.K. from the
European Union; and/or unfavorable export or import markets. These
factors, coupled with volatile prices for natural gas and diesel
fuel, inflation rates, climate conditions, currency exchange
fluctuations, general performance of the U.S. and global economies,
disturbances in world financial, credit, commodities and stock
markets, such as the recent turmoil in the world banking markets,
and any decline in consumer confidence and discretionary spending,
including the inability of consumers and companies to obtain credit
due to lack of liquidity in the financial markets, among others,
could cause actual results to vary materially from the
forward-looking statements included in this report or negatively
impact the Company's results of operations. Among other things,
future profitability may be affected by the Company's ability to
grow its business, which faces competition from companies that may
have substantially greater resources than the Company. The
Company's announced share repurchase program may be suspended or
discontinued at any time and purchases of shares under the program
are subject to market conditions and other factors, which are
likely to change from time to time. For more detailed discussion of
these factors and other risks and uncertainties regarding the
Company, its business and the industries in which it operates, see
the Company's filings with the SEC, including the Risk Factors
discussion in Item 1A of Part I of the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 2022. The Company cautions readers that all
forward-looking statements speak only as of the date made, and the
Company undertakes no obligation to update any forward-looking
statements, whether as a result of changes in circumstances, new
events or otherwise.
Darling Ingredients
Contacts
|
Investors:
|
Suann
Guthrie
|
|
Senior VP, Investor
Relations, Sustainability & Communications
|
|
(469) 214-8202;
suann.guthrie@darlingii.com
|
|
|
Media:
|
Jillian
Fleming
|
|
Director, Global
Communications
|
|
(972) 541-7115;
jillian.fleming@darlingii.com
|
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SOURCE Darling Ingredients Inc.