March 14 (Renewables Now) - Chinese polysilicon maker Daqo New Energy Corp (NYSE:DQ) on Wednesday reported an attributable net profit of USD 11.4 million (EUR 10.1m) for the last quarter of 2018, down from USD 33.7 million a year back but improving from a loss of USD 18.3 million in the previous quarter.
Although the average selling price of polysilicon declined sequentially, from USD 10.79 per kg in the third quarter to USD 9.69 per kg in the fourth quarter, Daqo New Energy’s average total production costs fell to USD 7.97/kg from USD 8.94/kg, thus helping its performance. In September 2018, the Chinese firm decided to close its Chongqing subsidiary, including wafer manufacturing operations there, in response to challenging market conditions. Adjusted to exclude costs and impairments related to the non-operational assets, as well as costs related to share-based compensation, net income attributable to Daqo New Energy’s shareholders came at USD 15.7 million, down from USD 35.3 million a year back but rising from USD 4.3 million in the third quarter.
The table below gives more details about the company’s performance.
|Figures in USD million (unless otherwise noted)||Q4 2018||Q4 2017||2018||2017|
|Net profit (loss) to shareholders||11.4||33.7||38.1||92.8|
|Non-GAAP net income to shareholders||15.7||35.3||71.6||99.5|
|EBITDA from continuing operations||29.5||76.3||120.4||158.5|
|EBITDA margin (%)||39.1||64.2||39.9||49|
Daqo New Energy’s polysilicon production volume increased to 7,301 tonnes from 4,734 tonnes in the third quarter, while polysilicon external sales volume rose to 7,030 tonnes from 6,199 tonnes. Both production and external sales reached record-high levels following the ramp-up of its Phase 3B expansion, which in turn helped cut polysilicon production cost in Xinjiang to USD 7.94 per kg. "With the successful ramp up of our new phase 3B facility and efforts of our operating team, both production volume and cost reduction targets were achieved with excellent results,” said CEO Longgen Zhang.
A Phase 4A capacity expansion is already ongoing and when it reaches full production will boost the firm’s total production capacity to 70,000 tonnes by March 2020, further cutting the overall total polysilicon cost.
In the first quarter of 2019, Daqo New Energy expects to produce between 8,500 and 8,700 tonnes of polysilicon and further reduce its total production cost to USD 7.50 per kg. Sales are expected to range between 8,400 tonnes and 8,600 tonnes. Meanwhile, its production capacity will expand by an additional 5,000 tonnes through a debottlenecking project starting in March. Polysilicon production for the second quarter is seen at 7,600-7,800 tonnes, with total production for 2019 standing between 37,000 tonnes and 40,000 tonnes.
(EUR 1.0 = USD 0.883)