Darling Ingredients (DAR) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $1.46 billion, down 17% year-over-year, with net income at $78.9 million, a 69% decrease, mainly due to lower commodity prices and reduced DGD Joint Venture earnings.

• Combined adjusted EBITDA for Q2 2024 was $273.6 million, down from $508.3 million in Q2 2023.

• Share repurchase activity totaled $29.2 million in Q2, with the program extended to August 2026 and $500 million authorized.

• Specialty ingredients and core business margins improved sequentially, while DGD had a solid quarter despite Port Arthur downtime.

• Focus for the remainder of 2024 is on debt reduction, margin expansion, and operational initiatives.

Financial highlights

• Q2 2024 net income was $78.9 million ($0.49 per diluted share), down from $252.4 million ($1.55 per share) in Q2 2023.

• Net sales for Q2 2024 were $1.46 billion, compared to $1.8 billion in Q2 2023.

• Operating income for Q2 2024 was $148.5 million, down $208.2 million year-over-year, mainly due to a $168.8 million decline in DGD equity income.

• Gross margin for Q2 2024 was 22.5%, nearly flat in percentage but down 17.8% in dollars year-over-year.

• For the first six months, net income was $160 million ($0.99 per share) vs. $438.2 million ($2.69 per share) in 2023; net sales were $2.88 billion vs. $3.5 billion.

Outlook and guidance

• Management reaffirmed full-year adjusted EBITDA guidance of $1.3–$1.4 billion, expecting stronger Q4 than Q3 as fat prices rebound.

• No earnings from SAF included in guidance; any contribution would be incremental.

• Focus remains on operational excellence, margin management, and continued DGD dividends.