Irving, Texas based fuel ingredients developer and producer Darling Ingredients released their quarterly and full-year earnings report Tuesday, highlighting admirable performance at the companies Diamond Green Diesel (DGD) joint venture without the added support of the recently reinstated blenders tax credit (BTC).
Company chief executive Randall Stuewe stated that the company delivered on target for fourth quarter and full-year performance, despite the belated extension of the BTC. Stuewe added that following the February 2018 tax credit extension, Darling Ingredients has submitted a claim for $160.4mn, which the company anticipates receiving during the upcoming year and would likely be reported on its Q1 2018 earnings report.
The company reported 161.3mn and 160mn gallons of renewable diesel produced and sold by DGD during full-year 2017, a 2% rise and 0.6% fall, respectively, from the prior year. The facility, of which Darling operates alongside Valero, earned $86.4mn in adjusted EBITDA without the addition of the BTC. Adding back the credit however DGD would have achieved an entity level EBITDA of $247mn, according to Stuewe.
The Norco, Louisiana-based production facility, which began expansion efforts in August of 2016, is scheduled for completion during the second quarter of 2018, and is projected to increase annual production capacity from 160mn gal to 275mn gal.
Darling Ingredients posted quarterly revenues of $952.5mn, a 7.5% increase from last year’s corresponding period. Adjusted EBITDA for the quarter was $115.8mm, a 3% rise from the prior year due in large part to improved raw materials volumes and pricing across both the food and fuel segments.
When discussing the California credit market, Darling executive vice president John Bullock referred to CARB’s recent regulation reform proposals as “prudent,” suggesting that the softened CI reduction targets were a way to smoothen the program and support its long-term viability.
“The deficit demand was ramping up so quickly versus the available credits that we could have worked ourselves into a situation where potentially we would have had excessively high LCFS pricing in the short term…that’s not good for the program. The program needs to have a more sustained growth path,” Bullock added.
Outside of the companies DGD joint venture, Darling Ingredients owns and operates multiple biodiesel production facilities in the US and Canada, including Dar Pro Bioenergy, Rendac, and Ecoson.