Darling Ingredients Inc Q2 2021 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Thomas Hinsdale Palmer - JPMorgan Chase & Co, Research Division - Analyst : You noted your assumption for the second half that DGD at $2.25 to $2.40 EBITDA per gallon. This would imply some slowdown from current levels. In your assumptions, what drives this? Is it the startup at DGD pushing up low CI prices, just some conservatism? And to what extent have you already begun to build inventory for the expansion, meaning some of the demand pull is already reflected in market pricing. Sandra Dudley Yes. So I think what you saw in Q2 is the stars really aligned for us. We came into the quarter, and we had purchased feedstocks and those were lower priced than what we saw during that quarter. And I also saw -- what you saw was we had the machine that allowed us to take advantage and really run those lower-priced feedstocks, and we didn't have to run the RBD soybean which is what the marginal producer was using. You also saw that soybean prices went up, RINs had to work really hard. And then you saw that because of that, the margins fell to our bottom line. And then I think what you had also asked is, where are we in preparation for DGD2 and coming online in terms of feedstocks and things like that. We're already loading feedstocks into our tanks right now. So we're preparing, as we speak.