Darling Ingredients Reports Decline in Q1 2025 Financial Performance

Darling Ingredients Inc. reported a decline in financial performance for the first quarter of fiscal 2025, ending March 29, 2025, with total net sales of $1.38 billion, down from $1.42 billion in the same period last year. The company experienced a net loss of $26.2 million, compared to a net income of $81.2 million in the prior year. This significant shift in profitability was attributed to various factors, including a decrease in equity income from its joint venture, Diamond Green Diesel, which reported a loss of $30.5 million compared to a gain of $78.4 million in the previous year.

The company's operating income also saw a substantial decrease, falling to $28.4 million from $137.2 million year-over-year. The decline in operating income was primarily driven by increased costs and a change in the fair value of contingent consideration. Total costs and expenses decreased slightly to $1.32 billion from $1.36 billion, reflecting a reduction in selling, general, and administrative expenses, which amounted to $121.6 million, down from $139.1 million in the prior year.

In terms of strategic developments, Darling Ingredients completed the acquisition of the Miropasz Group, a rendering company in Poland, for approximately $114.3 million. This acquisition is expected to enhance the company's Feed Ingredients segment. Additionally, the company has continued to focus on its joint venture with Valero Energy Corporation, which is integral to its renewable diesel production strategy. The DGD Joint Venture's operations were impacted by regulatory changes and maintenance activities, which contributed to lower production volumes.

Operationally, the company processed approximately 3.09 million metric tons of raw materials in its Feed Ingredients segment, a slight decrease of 1.6% compared to the previous year. The Food Ingredients segment saw an increase in raw material processed, totaling around 329,000 metric tons, up 9.7% year-over-year. However, total net sales in the Food Ingredients segment decreased due to lower collagen sales volumes and prices. The Fuel Ingredients segment reported a decrease in total net sales primarily due to lower finished product sales volumes, despite an increase in gross margin percentage.

Looking ahead, Darling Ingredients anticipates continued challenges due to fluctuating commodity prices, regulatory changes, and global economic conditions. The company remains focused on leveraging its acquisitions and joint ventures to enhance operational efficiency and market presence. Management believes that cash flows from operations, along with available credit facilities, will be sufficient to meet working capital needs and capital expenditures in the near term.