Daqo New Energy Announces Unaudited Second Quarter 2015 Results

Veröffentlicht auf 12.08.2015
Daqo New Energy 
Daqo New Energy Corp. today announced its unaudited financial results for the second quarter of 2015.

Second Quarter 2015 Financial and Operating Highlights

- Polysilicon production volume of 1,734 MT in Q2 2015, compared to 1,801 MT in Q1 2015

- Polysilicon sales volume of 1,363 MT in Q2 2015, compared to 1,502 MT in Q1 2015

- Polysilicon total production cost of $12.98/kg in Q2 2015, compared to $12.80/kg in Q1 2015; cash cost of $10.60/kg in Q2 2015, compared to $10.53/kg in Q1 2015

- Average selling price (ASP) of polysilicon was $15.95/kg in Q2 2015, compared to $18.09/kg in Q1 2015

- Wafer sales volume of 18.3 million pieces in Q2 2015, compared to 18.1 million pieces in Q1 2015

- Non-GAAP gross margin of 19.6% in Q2 2015, compared to 28.0% in Q1 2015

- EBITDA(non-GAAP) of $8.4 million in Q2 2015, compared to $11.4 million in Q1 2015

- Net loss attributable to Daqo New Energy shareholders of $0.9 million in Q2 2015, compared to net income attributable to Daqo New Energy shareholders of $1.2 million in Q1 2015


Commentary

In May 2015, we successfully completed the annual maintenance of our Xinjiang polysilicon facilities, which impacted polysilicon production for five days. In the second quarter of 2015, we produced 1,734 MT of polysilicon and sold 1,363 MT and 310 MT to our external customers and our internal wafer sector, respectively. Our total production cost for polysilicon was $12.98/kg and cash cost was $10.60/kg. The slight decreases in production and sales volume, and the increase in production cost as compared to Q1 2015, were the results of the planned shutdown related to our annual facility maintenance.

In the second quarter of 2015, we achieved EBITDA of $8.4 million, operating income of $1.2 million and recorded a net loss attributable to Daqo New Energy shareholders of $0.9 million. Although we are one of the lowest-cost polysilicon producers in the world, our profitability was negatively impacted by the decline in the second quarter's ASP, which was $15.95/kg compared to $18.09/kg in the first quarter of 2015. 

The pilot production for Phase 2B capacity expansion is running smoothly and on schedule. We expect to achieve full production capacity by the end of August, and reduce the total production cost to a level below $12.00/kg when fully ramped up.

In July 2015, we are very excited to have our new CFO Mr. Ming Yang on board. We believe his previous experiences including working on Wall Street in both buy-side and sell-side capacities, and also as the head of investor relations, will add great value to the Company in corporate finance, capital markets, business development and corporate strategy.

Also in July 2015, the board of directors approved our Phase 3A expansion project, which is expected to increase the polysilicon production capacity at our Xinjiang manufacturing site from the current level of 12,150 MT to 18,000 MT. We currently expect capital expenditures for the expansion project to be approximately RMB620 million and we anticipate to benefit from our ability to reutilize all possible idle polysilicon manufacturing equipment and related assets in Chongqing, as well as the existing shared facilities in Xinjiang. We have already started initial work related to the project including applications for relevant permits and approvals. Construction and equipment installation is expected to be completed by the end of 2016. We also expect to commence initial production of the Phase 3A project in the first quarter of 2017 and achieve full production capacity by the end of the second quarter of 2017. Our Phase 3A expansion project is a very important step towards our goal of becoming one of the world's top producers of high-purity polysilicon in terms of cost competitiveness, and will allow us to better serve the demand of the global solar PV industry.

Market outlook and Q3 2015 guidance

According to the announcement by China's National Energy Administration, the newly added PV installation in China in the first half of 2015 was 7.7GW. Towards the annual target of 17.8GW, 11.5GW has already been allocated to specific developers and an additional 2.2GW is in the process of obtaining approvals. We believe the installation in the second half of 2015 in China may potentially reach 10GW and the 17.8GW annual target is achievable. As for the global market, typically the installation in the second half of a calendar year may be 30~40% higher than in the first half. We expect to see strong demand in global solar markets in the second half of 2015, which may possibly improve polysilicon ASP in the second half of 2015. In addition, according to the announced policy regarding the suspension of "processing trade", the polysilicon imported from the United States, Korea and Europe will be subject to different AD and CVD tariffs, on top of the import tariff of 4%, starting from September 1, 2015.

For the third quarter of 2015, the Company expects to sell 2,100 to 2,200 MT of polysilicon to external customers. The Company also expects to sell approximately 17.5 million to 18.0 million pieces of solar wafers. This outlook reflects our current and preliminary view as of the date of this press release and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.

Second Quarter 2015 Results

Revenues

Revenues were $34.3 million, compared to $41.9 million in the first quarter of 2015 and $43.7 million in the second quarter of 2014.

The Company generated revenues of $21.7 million from 1,363 MT of polysilicon sold, compared to $27.2 million from 1,502 MT of polysilicon sold in the first quarter of 2015, and $31.0 million from 1,406 MT of polysilicon sold in the second quarter of 2014. The decrease in polysilicon revenues as compared to the first quarter of 2015 was primarily due to the impact of lower selling prices and lower sales volume. The ASP of polysilicon in the second quarter of 2015 was $15.95/kg, compared to $18.09/kg in the first quarter of 2015. In May 2015, Daqo New Energy conducted annual maintenance in Xinjiang polysilicon facilities, which has affected the polysilicon production for five days. As a result, the production volume and sales volume of polysilicon in the second quarter of 2015 decreased slightly as compared to the first quarter of 2015.

The Company generated $12.6 million from 18.3 million pieces of wafer sold, compared to $14.7 million from 18.1 million pieces of wafer sold in the first quarter of 2015 and $12.7 million from 18.0 million pieces of wafer sold in the second quarter of 2014. The decrease in wafer revenues as compared to the first quarter of 2015 was primarily a result of the following reasons: first, we sold a larger volume of wafer through OEM service in the second quarter of 2015, and the revenue from wafer-OEM is lower because the raw material is provided by customers and the corresponding revenue only includes service fees; and second, the ASP of wafer slightly decreased as compared to the first quarter of 2015.

Gross profit and margin

Gross profit was approximately $3.6 million, compared to $8.5 million in the first quarter of 2015 and $10.1 million in the second quarter of 2014. Non-GAAP gross profit, which excludes costs related to the non-operational polysilicon operations in Chongqing, was approximately $6.7 million, compared to $11.7 million in the first quarter of 2015 and $13.5 million in the second quarter of 2014. 

Gross margin was 10.5%, compared to 20.2% in the first quarter of 2015 and 23.1% in the second quarter of 2014. The decrease in gross margin was primarily the result of lower selling prices of polysilicon, as well as the impact of the planned annual maintenance. 

In the second quarter of 2015, total costs related to the non-operational Chongqing polysilicon plant including depreciation were $3.1 million, compared to $3.3 million in the first quarter of 2015 and $3.4 million in the second quarter of 2014. Excluding such costs, the non-GAAP gross margin was approximately 19.6%, compared to 28.0% in the first quarter of 2015 and 30.9% in the second quarter of 2014.

Selling, general and administrative expenses

Selling, general and administrative expenses were $2.8 million, compared to $4.6 million in the first quarter of 2015 and $1.5 million in the second quarter of 2014. Of the selling, general and administrative expenses, approximately $0.5 million were share-based compensation expenses in the second quarter of 2015, compared to $1.8 million in the first quarter of 2015.

Research and development expenses

Research and development expenses were approximately $0.2 million, compared to $0.1million in the first quarter of 2015 and $0.2 million in the second quarter of 2014.

Other operating income (expense)

Other operating income was $667 thousand, compared to $298 thousand in the first quarter of 2015 and other operating expense of $4 thousand in the second quarter of 2014.

Operating income and margin

Operating income was $1.2 million, compared to $4.1 million in the first quarter of 2015 and $8.3 million in the second quarter of 2014. Operating margin was 3.6%, compared to 9.7% in the first quarter of 2015 and 19.1% in the second quarter of 2014.

Net Interest expense

Net interest expenses were $2.5 million, compared to $3.2 million in the first quarter of 2015 and $3.8 million in the second quarter of 2014.

EBITDA

EBITDA was $8.4 million, compared to $11.4 million in the first quarter of 2015 and $15.2 million in the second quarter of 2014. EBITDA margin was 24.6%, compared to 27.3% in the first quarter of 2015 and 34.9% in the second quarter of 2014.

Net loss/ income attributable to our shareholders and loss/ earnings per ADS

Net loss attributable to Daqo New Energy shareholders was $0.9 million, compared to net income attributable to Daqo New Energy shareholders of $1.2 million in the first quarter of 2015 and $4.5 million in the second quarter of 2014.

Loss per basic ADS was $0.09, compared to earnings per basic ADS of $0.12 in the first quarter of 2015, and $0.57 in the second quarter of 2014.

Financial Condition

As of June 30, 2015, the Company had $95.1 million in cash and cash equivalents and restricted cash, compared to $32.2 million as of March 31, 2015 and $77.7 million as of June 30, 2014. The increase in cash and cash equivalents and restricted cash was primarily due to the withdrawal of a RMB300 million project loan from Chongqing Rural Commercial Bank.

As of June 30, 2015, the accounts receivable balance was $7.0 million, compared to $8.8 million as of March 31, 2015. As of June 30, 2015, the notes receivable balance was $38.3 million, compared to $48.4 million as of March 31, 2015. As of June 30, 2015, total borrowings were $266.0 million, of which $100.0 million were long-term borrowings, compared to total borrowings of $222.2 million, including $74.2 million long-term borrowings as of March 31, 2015.

Cash Flows

For the six months ended June 30, 2015, net cash provided by operating activities was $32.1 million, compared to $29.1 million in the same period of 2014.

For the six months ended June 30, 2015, net cash used in investing activities was $56.2 million, compared to $30.9 million in the same period of 2014. The increase was primarily related to the capital expenditures of Xinjiang Phase 2B polysilicon project partially offset by the subsequent receipt of $5.1 million proceeds from the disposition of Nanjing Daqo in 2012.

For the six months ended June 30, 2015, net cash provided by financing activities was $75.7 million, compared to $52.8 million in the same period of 2014. The company conducted follow-on offerings in February 2015 and May 2014 with the net proceeds of approximately $28.0 million and $54.6 million, respectively. For the six months ended June 30, 2015, net proceeds from bank borrowings increased approximately $28.9 million as compared to the same period of 2014.

Non-GAAP Financial Measures

To supplement Daqo's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("US GAAP"), Daqo uses in this press release non-GAAP gross profit and non-GAAP gross margin, which exclude costs related to the non-operational polysilicon operations in Chongqing. Such costs mainly consist of depreciation costs, as well as utilities and maintenance costs associated with the temporarily idle polysilicon machinery and equipment, which will be or are in the process of being relocated to the Company's Xinjiang facility. The Company would expect a majority of these costs, such as depreciation, will continue to occur as part of the production cost at the Xinjiang facilities subsequent to the completion of the relocation plan. Once these assets are placed back in service, the Company will remove this adjustment from the non-GAAP reconciling item. We also use EBITDA, which represents earnings before interest, taxes, depreciation and amortization, and EBITDA margin, which represents the proportion of EBITDA in revenue. The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with US GAAP. Daqo believes that the non-GAAP financial measures facilitate investors' and management's comparisons to Daqo's historical performance and assists management's financial and operational decision making.


ENF Profile von in diesem Artikel genannten Unternehmen

Daqo New Energy (Solarwerkstoffe): https://de.enfsolar.com/daqo-new-energy
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