Yahoo Finanza Darling Ingredients Inc (DAR) Q1 2024 Earnings Call Transcript Highlights: Navigating ...
Net Income: $81.2 million for Q1 2024, down from $185.8 million in Q1 2023.
Earnings Per Share (EPS): $0.50 per diluted share for Q1 2024, compared to $1.14 in Q1 2023.
Revenue: $1.42 billion for Q1 2024, a decrease from $1.79 billion in Q1 2023.
Operating Income: $137.2 million for Q1 2024, down from $255.8 million in Q1 2023.
Gross Margin: Decreased by $120.6 million, including a $25 million out-of-period adjustment.
Adjusted EBITDA: $280.1 million for Q1 2024, including a $25 million inventory adjustment.
Capital Expenditures: $93.8 million for Q1 2024, compared to $111.3 million in Q1 2023.
Total Debt: $4.465 billion as of March 30, 2024.
Effective Tax Rate: 4.6% for Q1 2024, influenced by biofuel tax incentives.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: What is the guidance for Darling Ingredients' EBITDA for 2024, and does it include any reversal of the LCM adjustments? A: Randall C. Stuewe, Chairman & CEO, explained that the guidance of $1.3 billion to $1.4 billion is based on current conditions, including a modest improvement in fat prices, and does not account for any early start-up of SAF. It reflects a conservative snapshot of the current market without assuming significant changes in external factors.
Q: Can you provide updates on your leverage ratio targets or goals for the year-end? A: Randall C. Stuewe, Chairman & CEO, indicated that the leverage ratio is a point-in-time measure and is currently affected by delayed dividends from DGD. The company is optimistic about reducing this ratio as cash accumulates in DGD and dividends resume, reflecting improved financial health.
Q: How do you split the EBITDA guidance between the base business and DGD for 2024? A: Randall C. Stuewe, Chairman & CEO, shared that the split is roughly $900 million from the base business and about $1 billion from DGD, based on current projections.
Q: What are the major catalysts for the expected improvement in fat and protein prices? A: Matthew J. Jansen, COO of North America, noted that the operational restart of the Ward plant is a significant factor. This will enhance the company's processing capacity and efficiency, particularly in the eastern U.S., which is expected to positively impact prices.
Q: Regarding the SAF production commissioning, can you discuss the progress in contracting volumes and the potential contribution to 2024 and 2025? A: Matthew J. Jansen, COO of North America, stated that the plant commissioning is ahead of schedule and on budget, with strong interest in their product. While no specific EBITDA contributions from SAF are included in the 2024 guidance, the company is confident about meeting volume and return expectations.
Q: How should we think about the impact of the feedstock price lag on DGD margins? A: An unidentified company representative acknowledged that if feedstock prices had remained stable, the adjusted margin of $0.76 could have potentially been around $1 for the quarter, indicating a significant impact from the price lag on DGD's performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
