Daqo New Energy Announces Unaudited Second Quarter 2013 Results

Publié le 13 sept. 2013
Daqo New Energy 
Sept. 11, 2013 - Daqo New Energy today announced its unaudited financial results for the second quarter of 2013.

Second Quarter 2013 Financial and Operating Highlights:

Polysilicon shipments were approximately 975 metric tons, or MT. Wafer shipments were 7.1 million pieces. We also shipped 41 MT of multi-crystal silicon blocks to our customers.

Revenues were $27.8 million, compared to $14.5 million in the first quarter of 2013 and $27.6 million in the second quarter of 2012.

Gross loss was $10.2 million, compared to $12.9 million in the first quarter of 2013 and $5.7 million in the second quarter of 2012.

Gross margin was negative 36.7%, compared to negative 89.0% in the first quarter of 2013 and negative 20.7% in the second quarter of 2012.

Operating loss was $174.9 million, compared to $16.6 million in the first quarter of 2013 and $6.2 million in the second quarter of 2012. Excluding $158.4 million of fixed assets impairment loss for Wanzhou polysilicon facilities, the non-GAAP operating loss in the second quarter of 2013 was $16.5 million.

Net loss attributable to Daqo New Energy Corp. shareholders was $34.0 million, compared to$18.7 million in the first quarter of 2013 and $7.1 million in the second quarter of 2012.

Earnings per fully diluted ADS were negative $4.91, compared to negative $2.70 in the first quarter of 2013, and negative $1.01 in the second quarter of 2012.

"In the second quarter of 2013, our Xinjiang polysilicon facilities continued to contribute positive cash flow. In April, we successfully conducted several technical improvement projects which reduced our production cost below $16/kg, which is significantly lower than our original target of $20/kg. We expect our Xinjiang facilities to generate positive operating income in the third quarter of 2013. We are also making great effort to maximize our capacity in Xinjiang. We plan to expand our capacity in Xinjiang to 6,150 MT by the end of 2013. By achieving that, we expect that we can reduce our cost to the level of $14/kg at that time," commented Dr. Gongda Yao, Chief Executive Officer of the Company.

"In the first half of 2013, we saw average selling prices of polysilicon stabilizing and improvement through the whole value chain. Recently the trade conflict in the solar PV industry between China and the European Union has been settled with a solution that is acceptable for both parties. The Ministry of Commerce of China also announced the preliminary ruling for the investigations on the polysilicon imported from the United States and Korea. With the resolution of various uncertainties becoming clearer, we expect that the industry will start to recover in the second half of 2013, especially when Chinese domestic market starts to take off.

"After evaluating the polysilicon market situation and the business environments both in Wanzhou and Xinjiang, in order to optimize the utilization of our resources and maximize the return on the polysilicon assets, the Company made a strategic decision to move the polysilicon equipments, which no longer create value in Wanzhou under the current situation, to our Xinjiang facilities. As a result, we have incurred certain impairment charges related to the Wanzhou polysilicon assets which will not be relocated in the amount of $158.4 million. At the same time, we plan to increase our Wanzhou wafer capacity to 6 million pieces per month in order to achieve economies of scale. We expect that our wafer facilities will achieve positive operating income by the end of 2013 when we fully ramp up the capacity," Dr. Yao concluded.

Second Quarter 2013 Results:

Revenues

Revenues were $27.8 million, compared to $14.5 million in the first quarter of 2013 and $27.6 million in the second quarter of 2012.

The Company generated revenues of $16.4 million from polysilicon, compared to $11.3 million in the first quarter of 2013, and $23.6 million in the second quarter of 2012. The increase from the first quarter of 2013 was primarily due to higher sales volume. The decrease from the second quarter of 2012 was primarily due to lower sales volume combined with lower average selling prices.

The Company generated $7.1 million from sales of wafers, compared to $1.7 million in the first quarter of 2013 and $2.8 million in the second quarter of 2012. The increase from the first quarter of 2013 and the second quarter of 2012 both were primarily due to higher sales volume.

The Company also generated $4.3 million from other businesses, such as sales of multi-crystal silicon blocks.

Gross loss and margin

Gross loss was $10.2 million, compared to $12.9 million in the first quarter of 2013 and $5.7 million in the second quarter of 2012.

Gross margin was negative 36.7%, compared to negative 89.0% in the first quarter of 2013 and negative 20.7% in the second quarter of 2012. Gross margin improved from the first quarter of 2013 as a result of the increased sales and reduced production cost both in polysilicon and wafer businesses.

Selling, general and administrative expenses

Selling, general and administrative expenses were $6.2 million, compared to $4.1 million in the first quarter of 2013 and $3.6 million in the second quarter of 2012. The increase in selling, general and administrative expenses from the first quarter of 2013 was primarily due to a $2.0 million increase in bad debt provision.

Research and development expenses

Research and development expenses were $1.0 million, compared to $0.4 million in the first quarter of 2013 and $0.4 million in the second quarter of 2012. The increase in research and development expenses from the first quarter of 2013 was primarily due to the expenses related to technical improvement projects conducted in Xinjiang facilities in the second quarter of 2013.

Fixed assets impairment loss

The Company recognized $158.4 million fixed assets impairment loss for its Wanzhou polysilicon facilities in the second quarter of 2013, as a result of the Company's decision to relocate its polysilicon manufacturing assets to Xinjiang and consolidate production operations in Xinjiang in response to market conditions.

Other operating income

Other operating income was $0.9 million, compared to $0.8 million in the first quarter of 2013 and $3.5 million in the second quarter of 2012. Other operating income was mainly composed of unrestricted cash incentives that the Company received from local government authorities, which fluctuates from period to period.

Operating loss and margin

As a result of the foregoing, operating loss was $174.9 million, compared to $16.6 million in the first quarter of 2013 and $6.2 million in the second quarter of 2012. Excluding $158.4 million of fixed assets impairment loss for Wanzhou polysilicon facilities, the non-GAAP operating loss in the second quarter of 2013 was $16.5 million.

Excluding $158.4 million of fixed assets impairment loss, the non-GAAP operating margin was negative 59.4%, compared to negative 114.7% in the first quarter of 2013 and negative 22.3% in the second quarter of 2012.

Net Interest expense

Net interest expense was $4.9 million, compared to $5.3 million in the first quarter of 2013 and $3.8 million in the second quarter of 2012.

The decrease in net interest expense from the first quarter of 2013 was primarily due to decrease of outstanding loan balance.

Income tax expense / benefit

Income tax expense was $139,204, compared to $nil in the first quarter of 2013. The income tax benefit was $2.6 million in the second quarter of 2012.

Net loss attributable to our shareholders and earnings per share

As a result of the aforementioned, net loss attributable to Daqo New Energy Corp. shareholders was $34.0 million in the second quarter of 2013, compared to $18.7 million in the first quarter of 2013 and $7.1 million in the second quarter of 2012.

Earnings per fully diluted ADS were negative $4.91 in the second quarter of 2013, compared to negative $2.70 in the first quarter of 2013, and negative $1.01 in the second quarter of 2012.

Financial Condition

As of June 30, 2013, the Company had $10.8 million in cash and cash equivalents and restricted cash, compared to $11.7 million as of March 31, 2013.

As of June 30, 2013, the accounts receivable balance was $16.5 million, compared to $19.3 million as of March 31, 2013. As of June 30, 2013, the notes receivable balance was $9.0 million, compared to $13.9 million as of March 31, 2013. As of June 30, 2013, total borrowings were $266.1 million, of which $144.4 million were long-term borrowings, compared to total borrowings of $301.5 million, including $178.7 million long-term borrowings as of March 31, 2013.

Outlook for Third Quarter 2013

For the third quarter of 2013, the Company expects to ship 1,000 MT of polysilicon. The Company also expects to ship approximately 8.9 million pieces of wafer and 6.8 MT of multi-crystal silicon ingots and blocks. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties.


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Daqo New Energy (Matériaux Solaires): https://fr.enfsolar.com/daqo-new-energy
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