Darling Ingredients income down in fourth quarter
Decrease attributable to tax credit inclusion in fourth quarter of 2015
Darling Ingredients Inc., a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries, announced financial results for the fiscal 2016 fourth quarter and year ended December 31, 2016.
Net income attributable to Darling for the three months ended December 31, 2016, was $40.5 million, or $0.25 per diluted share, compared to a net income of $84.4 million, or $0.52 per diluted share, for the fourth quarter of 2015. The decrease in net income for the fourth quarter 2016 is primarily attributable to the inclusion of the blenders tax credit entirely in the fourth quarter of 2015, whereas for fiscal 2016, the blenders tax credit was reported in each quarter as earned.
For the fourth quarter of 2016, the company reported net sales of $887.3 million, as compared with net sales of $809.7 million for the fourth quarter of 2015.
Net income attributable to Darling for the fiscal year ended December 31, 2016, was $102.3 million, or $0.62 per diluted share, as compared to a net income of $78.5 million, or $0.48 per diluted share, for the fiscal year ended January 2, 2016. The increase is primarily attributable to increased margins and volumes in the Food and Fuel Ingredients segments, higher raw material volumes in the Feed and Food Ingredients segments and lower selling, general and administrative expense.
“We closed out 2016 with a solid performance across all product lines. We executed on our strategy of de-levering and growing, paying down $169.7 million in debt while commissioning four new factories and expanding five others,” said Randall C. Stuewe, chairman and CEO of Darling Ingredients.
Update by segment
Feed Ingredients: This segment leveraged higher global fat prices and drove higher sales volumes, sustaining margins and offsetting lower protein markets. Raw material volumes were strong around the globe, up 7 percent year over year. The company’s two new U.S. rendering plants are online and meeting expectations. Weak protein pricing pressured U.S. rendering results in the quarter, but first quarter pricing is improving.
Fuel Ingredients: This segment maintained consistent and improving performance during the quarter, which included a final settlement on the business interruption insurance claim related to the bio-phosphate plant fire that occurred in December 2015. Rendac delivered improved performance on strong volumes. Canada Biodiesel was sequentially weaker but delivered overall solid annual results with a full year of production.