August 14 (Renewables Now) - China’s Daqo New Energy Corp (NYSE:DQ) today reported a net loss of USD 2.2 million (EUR 2m) for the second quarter of 2019, in which it completed a capacity debottlenecking project and carried out annual maintenance.
These activities led to higher polysilicon production costs, which combined with lower average selling prices (ASPs) resulted in a gross margin of just 13%. This is down from 22.6% in the first quarter of 2019 and 40.1% in the second quarter of 2018.
The company produced 7,151 tonnes of polysilicon at a total production cost of USD 8.12/kg, up from USD 7.42/kg in the preceding quarter. Sales stood at 7,130 tonnes, of which roughly 80% to mono customers.
CEO Longgen Zhang said the reporting period was quite challenging for the polysilicon industry as prices dropped to "their lowest levels in history", especially for multi-grade polysilicon. Prices are seen to begin to improve in the third quarter. Zhang added that "the pricing spread between mono-grade and multi-grade polysilicon products will likely remain significant, because output of mono-grade polysilicon still lags behind market demand and new capacities of mono wafer are still growing."
Daqo’s results are in the table.
|All in USD million||Q2 2019||Q1 2019||Q2 2018|
|EBITDA from cont. operations||10.2||20||27.4|
|Profit (loss) from operations||(0.4)||9.2||18|
|Net profit (loss) to Daqo shareholders||(2.2)||6.6||13.4|
|Non-GAAP net profit to Daqo shareholders||2.3||11.1||18.2|
The company expects to produce 9,200 to 9,500 tonnes of polysilicon in the third quarter at a total production cost of about USD 7.5/kg. The share of mono-grade polysilicon sales is forecast to inch up to 85%.
(USD 1 = EUR 0.89)