Calling its polysilicon production of $7.94/kg and cash cost of $6.64 per kg in Q4/2018 as the company’s lowest cost structure in its history, Daqo New Energy is confident of reaching its targeted $7.50 per kg production cost milestone in Q1/2019. (Source: Daqo New Energy)
- Daqo New Energy produced 7,301 MT of polysilicon, selling 7,030 MT of it for an ASP of $9.69 per kg in Q4/2018
- Its polysilicon production cost in the reporting quarter was $7.94 per kg and cash cost was $6.64 per kg
- Revenues for the quarter went up vis-à-vis previous quarter thanks to higher polysilicon sales volumes partially offset by lower ASPs
- Total revenues in 2018 were reported as $301.6 million, coming down from $323.2 million in 2017; net income too was a drop at $38.1 million in 2018, while in the previous year it earned $92.8 million
- In Q1/2019, Daqo expects to produce 8,500 MT to 8,700 MT of polysilicon, while for the entire 2019, it has guided for total polysilicon production volume of around 37,000 MT to 40,000 MT, factoring in the impact of the company’s annual facility maintenance
Daqo New Energy’s Polysilicon Sales & Revenues Head Downward In Q2/2018 With Chinese Government’s PV Policy Changes; Yet It Is Upbeat About Future Prospects
(10. August 2018)
The major highlight for Daqo New Energy in Q4/2018 was the Chinese company achieving total production capacity of 30,000 metric tons (MT) at its Xinjiang facilities, which was 3 months ahead of schedule (see Daqo Achieves 30,000 MT Total Production Capacity). It also signed a power purchase agreement (PPA) with the local utility to help reduce its electricity rates by some 18%. It said it was confident of bringing down its overall polysilicon production cost to $7.50 per kg in Q1/2019.
For now, the Chinese polysilicon producer managed to bring down its total polysilicon production cost to $7.94 per kg and cash cost to $6.64 per kg in the final quarter of 2018 which it says is its lowest cost structure in history.
Total polysilicon production volume during the reporting quarter was 7,301 MT, externally it sold 7,030 MT for an average selling price (ASP) of $9.69 per kg. On a sequential basis, the ASP declined from $10.79 per kg.
On the whole, Q4/2018 financial parameters for Daqo improved over previous quarter on several fronts, yet these pale in comparison with Q4/2017. Its revenues in Q4/2018 increased to $75.6 million, up from $67.4 million in Q3/2018, but down from $118.9 million in Q4/2017. It attributes a sequential increase in revenues due to higher polysilicon sales volumes partially offset by lower ASPs.
Gross profit went up to $16.9 million from $12.8 million last quarter. In Q4/2017, the number stood at $68.1 million. Gross margin during the quarter was 22.4%.
Daqo reported a net income of $11.4 million; the previous quarter it suffered a loss of $18.3 million, in Q4/2017 the net income was $33.7 million.
In 2018, Daqo produced 23,351 MT of polysilicon, improving over the 20,200 MT in the previous year. External sales volume last year was 22,521 MT, with total revenues of $301.6 million, coming down from $323.2 million in 2017. There was a major drop in net income that came to $38.1 million in 2018, while in the previous year it earned $92.8 million.
In Q1/2019, Daqo expects to produce 8,500 MT to 8,700 MT of polysilicon and sell around 8,400 MT to 8,600 MT externally. Due in mid-March is a debottlenecking project for Daqo to upgrade several older CVD furnaces, which is scheduled to complete in June-end in 2019. This will impact its production volumes in Q2/2019 when the company expects to produce 7,600 MT to 7,800 MT.
At the end of 2019, the management has guided for total polysilicon production volume of around 37,000 MT to 40,000 MT, factoring in the impact of the company’s annual facility maintenance.
Referring to Chinese government’s plans to have a new subsidy policy for solar projects, and healthy global demand from Europe, US, India, South Asia, Africa and South America, Daqo’s CEO Longgen Zhang expressed hope that the current market challenges were temporary and should be resolved by H2/2019.