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About Darling Ingredients Inc.
Darling Ingredients Inc. (NYSE: DAR) is a global leader in the circular economy, specializing in the transformation of animal by-products and food waste into high-value, sustainable ingredients. With a history spanning over 130 years, the company operates more than 260 facilities across five continents, processing approximately 15% of the world's animal agricultural by-products. Darling Ingredients is headquartered in Irving, Texas, and employs over 10,000 people worldwide.
Business Model and Operations
Darling Ingredients generates revenue through three primary business segments:
- Feed Ingredients: This segment processes animal by-products into proteins, fats, and meals used in animal feed and pet food, contributing the majority of the company's revenue.
- Food Ingredients: The company produces edible ingredients such as gelatin and collagen, which are used in pharmaceuticals, food products, and health supplements.
- Fuel Ingredients: Darling Ingredients is a pioneer in renewable energy, converting used cooking oil, animal fats, and bakery remnants into renewable diesel and sustainable aviation fuel (SAF) through its joint venture, Diamond Green Diesel (DGD).
Additionally, the company offers grease trap services for food establishments and sells equipment for the collection and transport of used cooking oil, further diversifying its revenue streams.
Market Significance and Competitive Position
Darling Ingredients holds a unique position in the global market as a vertically integrated leader in sustainable ingredient production. The company's innovative approach to waste-to-value conversion supports industries ranging from pharmaceuticals and food to renewable energy and agriculture. Its joint venture, Diamond Green Diesel, is one of the largest producers of renewable diesel and SAF globally, providing a competitive edge in the fast-growing bioenergy sector.
By processing waste-based feedstocks, such as used cooking oil and animal tallow, into renewable fuels, the company addresses critical environmental challenges while creating economic value. Darling Ingredients also produces about 30% of the world's collagen, a key component in health and wellness products, further solidifying its market significance.
Global Reach and Sustainability
With operations in over 15 countries, Darling Ingredients serves a diverse customer base across industries such as food, pharmaceuticals, pet food, agriculture, and renewable energy. Its commitment to sustainability is evident in its ability to process waste materials into valuable products, reducing environmental impact and supporting a circular economy. The company's facilities are strategically located to optimize raw material collection and distribution, ensuring efficiency and cost-effectiveness.
Challenges and Industry Context
Operating in a cyclical industry, Darling Ingredients faces challenges such as fluctuating commodity prices, regulatory changes, and competition from other renewable energy producers. However, its diversified business model, global scale, and focus on innovation provide resilience and adaptability in dynamic market conditions.
Conclusion
Darling Ingredients Inc. exemplifies the potential of the circular economy by transforming waste into sustainable, high-value products. Its leadership in renewable energy and specialty ingredients, combined with a robust global presence, positions the company as a key player in addressing the world's growing demand for sustainable solutions. Investors and stakeholders can view Darling Ingredients as a cornerstone in industries that prioritize environmental stewardship and resource efficiency.
Darling Ingredients (NYSE: DAR) has unveiled DarLinQ, an innovative technology using sonar and Bluetooth for real-time monitoring of used cooking oil (UCO) storage containers. The system enhances operational efficiency and security through continuous oil-level monitoring and automated equipment.
This patented technology addresses the significant challenge of UCO theft, which costs up to $75 million annually in the United States according to the National Renderers Association. DarLinQ provides real-time theft alerts and prevention features, already proven successful through pilot programs. The company is rolling out this technology across its network of over 200,000 restaurant and kitchen facilities in the U.S. through its DAR PRO Solutions brand.
Darling Ingredients (NYSE: DAR) has announced its participation in the upcoming Jefferies Renewables & Clean Energy Conference on December 4, 2024. The company, which specializes in converting food waste into sustainable products and renewable energy, will engage in investor meetings during the event. Chairman and CEO Randall C. Stuewe will participate in a fireside chat scheduled for 9:30 a.m. ET. Interested parties can access webcast details and registration information through the company's website at darlingii.com/events.
Darling Ingredients (NYSE: DAR) reported Q3 2024 net income of $16.9 million, or $0.11 per diluted share, down from $125.0 million ($0.77 per share) in Q3 2023. Total net sales decreased to $1.4 billion from $1.6 billion year-over-year. The decline was primarily attributed to sharp decreases in fat prices and lower Diamond Green Diesel earnings.
Combined adjusted EBITDA was $236.7 million, compared to $334.3 million in Q3 2023. The company received $111.2 million in cash dividends from Diamond Green Diesel, which sold 316.6 million gallons of renewable diesel at $0.25 per gallon EBITDA. Darling reduced debt by approximately $192 million and expects full-year 2024 combined adjusted EBITDA between $1.15-1.175 billion.
Darling Ingredients (NYSE: DAR) has announced the publication of preclinical and clinical studies in the Wiley Journal of Food Science and Nutrition, focusing on the impact of a specific collagen peptide composition on post-meal blood glucose spikes. The studies involve Nextida GC™, the first product in Rousselot's Nextida library, which has shown significant potential in mitigating post-meal glucose spikes in healthy individuals.
In the clinical trial, participants who consumed 5- or 10-gram doses of Nextida GC 30 minutes before a meal experienced a 42% reduction in blood glucose spike on average after the meal. This research supports Darling Ingredients' commitment to developing new collagen-based products with health benefits beyond traditional ones, meeting the growing consumer demand for natural and effective health solutions.
Darling Ingredients Inc. (NYSE: DAR) has announced it will release its third quarter 2024 financial results on Thursday, October 24, 2024. The company will host a conference call at 9 a.m. Eastern Time (8 a.m. Central Time) on the same day to discuss the results and provide an update on company operations. A presentation with supplemental financial data will be available on the company's investor website.
To access the call, listeners can register for an audio-only webcast. Participants wishing to ask questions can register in advance for dial-in details or call specific numbers on the day. A replay of the call will be available online and via phone until October 31, 2024, using the reference passcode 1857635.
Darling Ingredients Inc. (NYSE: DAR) announced that its joint venture Diamond Green Diesel (DGD) will supply sustainable aviation fuel (SAF) to Chicago Midway International Airport. The two-year agreement involves Valero Marketing and Supply Company and Southwest Airlines Co. (NYSE: LUV). Southwest will purchase a minimum of 3.6 million gallons of neat SAF, with an option to buy up to 25 million gallons.
The SAF, produced from waste-based feedstocks, is expected to reduce lifecycle greenhouse gas emissions by up to 80% compared to conventional jet fuel. It will be certified by a CORSIA-approved Sustainability Certification Scheme. The DGD Port Arthur plant will be able to upgrade about 50% of its 470 million gallon annual production capacity to SAF by Q4 2024, potentially making DGD one of the world's largest SAF manufacturers.
Darling Ingredients Inc. (NYSE: DAR) has introduced Nextida™ GC, a new collagen peptide designed to reduce post-meal glucose spikes in healthy individuals. A clinical trial conducted by Darling's brand Rousselot showed that a 5-gram or 10-gram dose taken 30 minutes before a meal significantly lowered post-meal glucose spike by an average of 42%.
CEO Randall C. Stuewe stated that Darling Ingredients has discovered a way to use natural collagen for targeted health benefits through a proprietary process. Nextida GC is the first of many collagen-based solutions with targeted health benefits that the company is developing. The company continues to demonstrate how collagen can be effectively used to target common health and wellness benefits, with patents pending on their scientific work.
Darling Ingredients Inc. (NYSE: DAR) has announced that its joint venture, Diamond Green Diesel (DGD), will provide the first regular supply of sustainable aviation fuel (SAF) to Florida through an agreement between World Fuel and DHL Express. Over a two-year period, World Fuel Services will deliver approximately 60 million gallons of blended SAF, including 18 million gallons of neat SAF, produced by DGD from used cooking oil and food waste.
The SAF will have at least 80% lower lifecycle greenhouse gas emissions compared to conventional jet fuel and will be used for DHL Express's GoGreen Plus emission-reduced air transportation services. DGD's Port Arthur plant is expected to be capable of upgrading about 50% of its 470 million gallon annual production capacity to SAF by the fourth quarter of 2024, potentially making it one of the largest SAF manufacturers globally.
Darling Ingredients Inc. (NYSE: DAR) has elected Randy Hill to its board of directors as an independent director, effective immediately. Hill will serve on the board's sustainability and audit committees. With his extensive background in financial services and experience advising companies with global operations, Hill is expected to provide valuable insights into complex financial analysis and global reporting for Darling Ingredients' multifaceted business.
Hill is currently a partner at Opportune LLP, a business advisory firm. He previously held various roles at KPMG, including Audit Partner-in-Charge of the Dallas office. His expertise spans corporate governance, mergers and acquisitions, complex audit and accounting matters, IPOs, and capital market transactions.
Darling Ingredients (NYSE: DAR) has announced a target to reduce Scope 1 and 2 emissions by 42% by 2030, aligning with its commitment to the Science Based Targets initiative (SBTi). This goal is highlighted in the company's 2023 Sustainability Progress Report, which outlines key environmental, social, and governance achievements.
Notable accomplishments in 2023 include:
- Disclosure of Scope 3 emissions inventory from Forest, Land and Agriculture sources
- Construction of a new Sustainable Aviation Fuel unit at the Diamond Green Diesel joint venture
- Increased representation of women in senior management
- Continued partnership with FFA, donating over $270,000
- Proactive mapping of biodiversity risks across U.S. operations
Darling Ingredients plans to submit Scope 1, 2, and 3 targets to SBTi for validation by the end of 2024, as part of its aspiration to achieve net zero emissions by 2050.
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