Daqo New Energy continues to benefit from price increases in Q3
Solar cells. Author: Arne Krueger. License: Creative Commons.
Chinese solar-grade polysilicon producer Daqo New Energy Corp (NYSE:DQ) continued to benefit from strong market demand in the third quarter of 2022, increasing its gross margin to above 80%.
The company said on Thursday it kept producing above its nameplate capacity and ended the quarter with very low inventories. Polysilicon production was 33,401 tonnes despite scheduled annual maintenance, while sales came in at 33,126 tonnes.
As these figures were below the levels achieved in the second quarter, revenues decreased slightly sequentially to USD 1.22 billion (EUR 1.22bn) from USD 1.24 billion, while jumping from USD 585.8 million a year ago.
The table below contains some figures from the company’s unaudited third-quarter financial results:
Gross margin (%)
Income from operations
Net income attributable to Daqo New Energy shareholders
Adjusted net income attributable to Daqo New Energy shareholders
Polysilicon sales volume (tonnes)
The company’s average selling price increased 14% quarter-over-quarter in renminbi terms, which, along with lower production cost, saw the gross margin climb to 80.2% from 76.1% in the preceding quarter.
Net income attributable to shareholders was USD 323.4 million, up year-over-year but down significantly from the second quarter. The result includes USD 263.4 million in non-cash share-based compensation cost related to the company's 2022 share incentive plan. Adjusted net income was USD 590.4 million.
“Driven by the rising global energy prices and the urgency to address climate change, both demand and pricing for solar PV products increased during the quarter, with particularly strong demand from markets such as China, Europe, Southeast Asia, and Brazil,” said Daqo New Energy chief executive Longgen Zhang.
Based on data from China National Energy Administration, China installed 52.6 GW of solar photovoltaic (PV) projects in the first nine months of 2022, a year-on-year increase of 106%, the CEO noted.
Daqo New Energy projects to produce 30,000-32,000 tonnes of polysilicon in the fourth quarter of 2022 and 130,000-132,000 tonnes in the full year, including the effect of its annual facility maintenance.