IRVING, Texas — Darling Ingredients Inc. announced on Nov. 7 that it acquired the stock of PPH Conto Ltd., a food-grade animal fat processing facility in Kujawski, Poland.
"Poland is one of the fastest growing meat production areas in Europe," Randall Stuewe, chairman and CEO of Darling Ingredients, said in a statement. The acquisition of Conto provides us the opportunity to strengthen our current position in this important growth area and enlarge our production portfolio with high end food grade fats. This will enable us to expand our service portfolio not only in Poland but across Europe for both our customers as well as to our suppliers.”
The news of the acquisition came a day after the company’s Q3 earnings report that showed disappointing numbers.
Revenue for the most recent quarter stood at $812.6 million down from $936.3 million in the third quarter of 2017. This past October, Darling announced an investment in the pet food industry with the acquisition of most of the assets of Triple - T Foods Arkansas Inc. by its Dar Pro Ingredients subsidiary.
In the earnings report, Darling explained that Diamond Green Diesel (DGD) extended downtime strongly influenced results with higher costs and lower volumes and pressured fat selling prices.
However, record slaughter volumes created a large supply of fats and proteins. The company also mentioned China trade disputes as pressuring global trade flows of animal proteins.
“We clearly delivered lower than expected results in 3Q. Extended downtime at DGD largely influenced results and reshuffling our supply chain for fats and used cooking oil impacted feed segment. China trade disputes record global grain stocks and a stronger US dollar weighed on finished product pricing,” Stuewe said. “The silver lining is we had record raw material volumes globally, and DGD is fully operational. We expect to produce 65-70M gallons in Q4 with spot margins above $1.25 per gallon.”
The Feed Ingredients segment showed an adjusted EBITDA of $59.2 million which was down 27 percent. Revenue also stood at $482 million for this segment but was down 16.1 percent.
Food Ingredients adjusted EBITDA was listed as $32.7 million, which was down 5.5 percent. Revenue for this segment stood at $265.2 million.
Finally, in the Fuel Ingredients segment, adjusted EBITDA was at $13.9 million, which was up 71.6 percent. Revenue was slated at $64.6 million, also up 4.4 percent.
“Feed segment impacted by lower pricing environment and deflationary lag in our US raw material formulas combined with an inventory write down of Chinese plasma related to ASF,” Stuewe said. “Food segment improved sequentially and delivered consistent year-over-year results with solid performance from our Rousselot collagen platform and higher sales volumes in China. Fuel segment, strong volumes supported improved performance across Europe offset slightly weaker results in North American biodiesel due to lower RIN pricing and the absence of the BTC, which we remain optimistic it will re-instate late 4Q18."
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