Darling Lifts EBITDA as Renewable-Fuel Margins Rebound
Net income climbed to $387.3 million as the renewable-fuel joint venture swung sharply higher.
Darling Ingredients (DAR), the sustainable-ingredients producer, nearly tripled second-quarter combined Adjusted EBITDA to $741.7 million as its Diamond Green Diesel joint venture overtook the core business as the largest earnings contributor.
The quarter extended a recovery that began late last year. Darling’s share of DGD Adjusted EBITDA climbed to $389.2 million from $151.2 million in the first quarter, while core-business Adjusted EBITDA rose to $352.5 million from $255.7 million.
Net sales rose to $1.7 billion from $1.5 billion a year earlier and $1.6 billion in the first quarter. Diluted earnings increased to $2.41 a share from $0.08 a share a year earlier and $0.83 a share in the preceding quarter.
DGD renewable-fuel volume increased to 348.8 million gallons from 272.4 million in the first quarter, while EBITDA per gallon doubled to $2.23. The margin had recovered from negative $0.02 a gallon in the third quarter of 2024, reflecting a sharp turn in the joint venture’s contribution.
DGD operating income reached $714.3 million, compared with $28.1 million a year earlier, and net income rose to $706.9 million from $16.3 million. For the first half, the joint venture swung to operating income of $946.0 million from a $25.6 million loss.
The core business also strengthened, with Adjusted EBITDA rising to $352.5 million from $206.9 million a year earlier. Restructuring and asset-impairment charges increased to $3.9 million from $0.4 million in the first quarter, remaining well below the $58.0 million recorded in the fourth quarter of 2024.
Darling expects third-quarter core-ingredients Adjusted EBITDA of $325 million to $340 million. The company also raised its fiscal 2026 capital-spending estimate to about $450 million from about $400 million and set year-end targets of net debt at or below $3 billion and bank leverage below 2 times.
The company reduced net debt by $223 million during the quarter, repurchased $73 million of shares and received $280 million in DGD cash distributions. Darling also added three Brazilian rendering facilities through its roughly $122 million Patense Group acquisition and, after quarter-end, sold a majority stake in a noncore environmental-services business for about $90 million.