Daqo New Energy Announces Unaudited Second Quarter 2024 Results
Second Quarter 2024 Financial and Operating Highlights
- Polysilicon production volume was 64,961 MT in Q2 2024, compared to 62,278 MT in Q1 2024
- Polysilicon sales volume was 43,082 MT in Q2 2024 compared to 53,987 MT in Q1 2024
- Polysilicon average total production cost(1) was
$6.19 /kg in Q2 2024 compared to$6.37 /kg in Q1 2024 - Polysilicon average cash cost(1) was
$5.39 /kg in Q2 2024, compared to$5.61 /kg in Q1 2024 - Polysilicon average selling price (ASP) was
$5.12 /kg in Q2 2024, compared to$7.66 /kg in Q1 2024 - Revenue was
$219.9 million in Q2 2024, compared to$415.3 million in Q1 2024 - Gross loss was
$159.2 million in Q2 2024, compared to gross profit of$72.1 million in Q1 2024. Gross margin was -72.4% in Q2 2024, compared to 17.4% in Q1 2024 - Net loss attributable to Daqo New Energy Corp. shareholders was
$119.8 million in Q2 2024, compared to net income attributable toDaqo New Energy Corp. shareholders of$15.5 million in Q1 2024 - Loss per basic American Depositary Share (ADS)(3) was
$1.81 in Q2 2024, compared to earnings per basic ADS(3) of$0.24 in Q1 2024 - Adjusted net loss (non-GAAP)(2) attributable to Daqo New Energy Corp. shareholders was
$98.8 million in Q2 2024, compared to adjusted net income (non-GAAP)(2) attributable toDaqo New Energy Corp. shareholders of $36.0 million in Q1 2024 - Adjusted loss per basic ADS(3) (non-GAAP)(2) was
$1.50 in Q2 2024, compared to adjusted earnings per basic ADS(3) (non-GAAP)(2) of$0.55 in Q1 2024 - EBITDA (non-GAAP)(2) was -
$144.9 million in Q2 2024, compared to$76.9 million in Q1 2024. EBITDA margin (non-GAAP)(2) was -65.9% in Q2 2024, compared to 18.5% in Q1 2024
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Three months ended |
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US$ millions except as indicated otherwise |
|
|
|
Revenues |
219.9 |
415.3 |
636.7 |
Gross (loss)/profit |
(159.2) |
72.1 |
258.9 |
Gross margin |
(72.4 %) |
17.4 % |
40.7 % |
(Loss)/income from operations |
(195.6) |
30.5 |
213.9 |
Net (loss)/income attributable to Daqo New Energy |
(119.8) |
15.5 |
103.7 |
(Loss)/earnings per basic ADS(3) ($ per ADS) |
(1.81) |
0.24 |
1.35 |
Adjusted net (loss)/income (non-GAAP)(2) |
(98.8) |
36.0 |
134.5 |
Adjusted (loss)/earnings per basic ADS(3) (non- |
(1.50) |
0.55 |
1.75 |
EBITDA (non-GAAP)(2) |
(144.9) |
76.9 |
230.0 |
EBITDA margin (non-GAAP)(2) |
(65.9 %) |
18.5 % |
36.1 % |
Polysilicon sales volume (MT) |
43,082 |
53,987 |
51,550 |
Polysilicon average total production cost ($/kg)(1) |
6.19 |
6.37 |
6.92 |
Polysilicon average cash cost (excl. dep'n) ($/kg)(1) |
5.39 |
5.61 |
6.05 |
Notes: |
(1) Production cost and cash cost only refer to production in our polysilicon facilities. Production cost is calculated by the inventoriable costs relating to production of polysilicon divided by the production volume in the period indicated. Cash cost is calculated by the inventoriable costs relating to production of polysilicon excluding depreciation cost and non-cash share-based compensation cost, divided by the production volume in the period indicated. |
(2) |
(3) ADS means American Depositary Share. One (1) ADS represents five (5) ordinary shares. |
Management Remarks
Mr.
"On the operational front, during the second quarter, we started initial production at our 100,000 MT Phase 5B polysilicon project in
"In light of the current market conditions and pricing, we have adjusted our target production utilization rate for the third quarter and our production plan for the full year. We expect our Q3 2024 total polysilicon production volume to be approximately 43,000 MT to 46,000 MT, as we started maintenance and lowered our production utilization rate to support pricing and reduce our cash burn. As a result, we anticipate our full year 2024 production volume to be in the range of 210,000 MT to 220,000 MT."
"During the second quarter, solar market sentiment was depressed and customers showed little interest in purchasing products. As a result, polysilicon prices kept setting new lows, below production costs and even below cash costs. Polysilicon prices plummeted from slightly above
"This year will be challenging for
Outlook and guidance
In light of the current market condition and pricing, the Company has adjusted its target production utilization rate for the third quarter and production plan for the full year. The Company expects to produce approximately 43,000 MT to 46,000 MT of polysilicon during the third quarter of 2024. The Company expects to produce approximately 210,000 MT to 220,000 MT of polysilicon for the full year of 2024, inclusive of the impact of the Company's annual facility maintenance.
This outlook reflects
Second Quarter 2024 Results
Revenues
Revenues were
Gross (loss)/profit and margin
Gross loss was
Selling, general and administrative expenses
Selling, general and administrative expenses were
Research and development expenses
Research and development (R&D) expenses were
(Loss)/income from operations and operating margin
As a result of the foregoing, loss from operations was
Operating margin was -89.0%, compared to 7.3% in the first quarter of 2024 and 33.6% in the second quarter of 2023.
Foreign exchange loss
Foreign exchange loss was
Net (loss)/income attributable to
As a result of the aforementioned, net loss attributable to
Loss per basic American Depository Share (ADS) was
Adjusted net (loss)/income (non GAAP) attributable to
As a result of the aforementioned, adjusted net loss (non-GAAP) attributable to
Adjusted loss earnings per basic American Depository Share (ADS) was
EBITDA
EBITDA (non-GAAP) was -
Financial Condition
As of
Cash Flows
For the six months ended
For the six months ended
For the six months ended
Use of Non-GAAP Financial Measures
To supplement
The Company uses EBITDA, which represents earnings before interest, taxes, depreciation and amortization, and EBITDA margin, which represents the proportion of EBITDA in revenues. Adjusted net income attributable to
A reconciliation of non-GAAP financial measures to comparable US GAAP measures is presented later in this document.
Conference Call
The Company has scheduled a conference call to discuss the results at 8:00 AM
The dial-in details for the earnings conference call are as follows:
Participant dial in (
Participant international dial in: +1-412-902-4272
Please dial in 10 minutes before the call is scheduled to begin and ask to join the
Webcast link:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=92N1k8VX
A replay of the call will be available 1 hour after the conclusion of the conference call through
International toll: +1-412-317-0088
Replay access code: 2595897
To access the replay through an international dial-in number, please select the link below.
https://services.choruscall.com/ccforms/replay.html
Participants will be asked to provide their name and company name upon entering the call.
About
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the
Daqo New Energy Corp. |
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Unaudited Condensed Consolidated Statement of Operations |
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(US dollars in thousands, except ADS and per ADS data) |
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Three months ended |
Six months ended |
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Revenues |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
(379,074) |
|
(343,226) |
|
(377,816) |
|
(722,300) |
|
(580,918) |
Gross (loss)/profit |
|
(159,160) |
|
72,085 |
|
258,908 |
|
(87,075) |
|
765,640 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
(37,526) |
|
(38,433) |
|
(43,257) |
|
(75,959) |
|
(84,541) |
Research and development expenses |
|
(1,836) |
|
(1,538) |
|
(2,169) |
|
(3,374) |
|
(4,108) |
Other operating income/(expense) |
|
2,903 |
|
(1,605) |
|
385 |
|
1,298 |
|
677 |
Total operating expenses |
|
(36,459) |
|
(41,576) |
|
(45,041) |
|
(78,035) |
|
(87,972) |
(Loss)/income from operations |
|
(195,619) |
|
30,509 |
|
213,867 |
|
(165,110) |
|
677,668 |
Interest income, net |
|
8,730 |
|
12,270 |
|
12,751 |
|
21,000 |
|
24,698 |
Foreign exchange loss |
|
(1,406) |
|
(269) |
|
(19,714) |
|
(1,675) |
|
(19,714) |
Investment income |
|
7,149 |
|
- |
|
8 |
|
7,149 |
|
21 |
(Loss)/income before income taxes |
|
(181,146) |
|
42,510 |
|
206,912 |
|
(138,636) |
|
682,673 |
Income tax benefit/(expense) |
|
23,283 |
|
(14,356) |
|
(44,730) |
|
8,927 |
|
(125,797) |
Net (loss)/income |
|
(157,863) |
|
28,154 |
|
162,182 |
|
(129,709) |
|
556,876 |
Net (loss)/income attributable to non- |
|
(38,083) |
|
12,681 |
|
58,459 |
|
(25,402) |
|
174,350 |
Net (loss)/income attributable to |
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|
|
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|
|
|
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|
|
|
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(Loss)/earnings per ADS |
|
(1.81) |
|
0.24 |
|
1.35 |
|
(1.58) |
|
4.93 |
Basic |
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|
|
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|||||
Diluted |
|
(1.81) |
|
0.24 |
|
1.34 |
|
(1.58) |
|
4.89 |
Weighted average ADS outstanding |
|
|
|
|
|
|
|
|
|
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Basic |
|
66,002,970 |
|
65,704,356 |
|
76,762,451 |
|
65,854,677 |
|
77,526,150 |
Diluted |
|
66,002,970 |
|
65,720,945 |
|
77,031,850 |
|
65,854,677 |
|
77,931,229 |
Daqo New Energy Corp. |
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Unaudited Condensed Consolidated Balance Sheets |
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(US dollars in thousands) |
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ASSETS: |
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Current Assets: |
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|
|
|
|
|
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Cash, cash equivalents and restricted cash |
|
997,481 |
|
2,689,310 |
|
3,169,724 |
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Short-term investments |
|
219,469 |
|
- |
|
2,757 |
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Notes receivable |
|
80,719 |
|
194,088 |
|
798,463 |
|
Inventories |
|
191,969 |
|
191,161 |
|
159,494 |
|
Fixed term deposit within one year |
|
1,168,032 |
|
- |
|
- |
|
Other current assets |
|
272,404 |
|
229,893 |
|
137,288 |
|
Total current assets |
|
2,930,074 |
|
3,304,452 |
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4,267,726 |
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Property, plant and equipment, net |
|
3,781,330 |
|
3,731,647 |
|
2,920,163 |
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Prepaid land use right |
|
155,197 |
|
157,046 |
|
94,606 |
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Fixed term deposit over one year |
|
27,366 |
|
- |
|
- |
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Other non-current assets |
|
46,534 |
|
54,688 |
|
42,532 |
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TOTAL ASSETS |
|
6,940,501 |
|
7,247,833 |
|
7,325,027 |
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Current liabilities: |
|
|
|
|
|
|
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Accounts payable and notes payable |
|
64,208 |
|
67,329 |
|
104,617 |
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Advances from customers-short term portion |
|
59,015 |
|
128,697 |
|
199,396 |
|
Payables for purchases of property, plant and |
|
436,286 |
|
409,689 |
|
256,278 |
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Other current liabilities |
|
82,086 |
|
114,227 |
|
152,956 |
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Total current liabilities |
|
641,595 |
|
719,942 |
|
713,247 |
|
Advance from customers – long term portion |
|
102,861 |
|
113,600 |
|
128,842 |
|
Other non-current liabilities |
|
18,012 |
|
28,329 |
|
31,722 |
|
TOTAL LIABILITIES |
|
762,468 |
|
861,871 |
|
873,811 |
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EQUITY: |
|
|
|
|
|
|
|
|
|
4,593,003 |
|
4,716,390 |
|
4,866,541 |
|
Non-controlling interest |
|
1,585,030 |
|
1,669,572 |
|
1,584,675 |
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Total equity |
|
6,178,033 |
|
6,385,962 |
|
6,451,216 |
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TOTAL LIABILITIES & EQUITY |
|
6,940,501 |
|
7,247,833 |
|
7,325,027 |
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Daqo New Energy Corp. |
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Unaudited Condensed Consolidated Statements of Cash Flows |
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(US dollars in thousands) |
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For the six months ended |
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2024 |
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2023 |
|
Operating Activities: |
|
|
|
|
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Net (loss)/income |
|
|
|
|
|
Adjustments to reconcile net (loss)/income to net cash provided |
|
239,144 |
|
139,052 |
|
Changes in operating assets and liabilities |
|
(388,076) |
|
90,373 |
|
Net cash (used in)/provided by operating activities |
|
(278,641) |
|
786,301 |
|
|
|
|
|
|
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Investing activities: |
|
|
|
|
|
Purchases of property, plant and equipment |
|
(291,856) |
|
(485,173) |
|
Purchases of land use right |
|
(10,068) |
|
(21,492) |
|
Purchase and redemption of short-term investments and fixed-term |
|
(1,379,888) |
|
10,963 |
|
Net cash used in investing activities |
|
(1,681,812) |
|
(495,702) |
|
|
|
|
|
|
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Financing activities: |
|
|
|
|
|
Net cash used in financing activities |
|
(42,962) |
|
(477,477) |
|
|
|
|
|
|
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Effect of exchange rate changes |
|
(47,060) |
|
(163,749) |
|
Net decrease in cash, cash equivalents and restricted cash |
|
(2,050,475) |
|
(350,627) |
|
Cash, cash equivalents and restricted cash at the beginning of the |
|
3,047,956 |
|
3,520,351 |
|
Cash, cash equivalents and restricted cash at the end of the period |
|
997,481 |
|
3,169,724 |
|
Daqo New Energy Corp. |
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Reconciliation of non-GAAP financial measures to comparable US GAAP measures |
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(US dollars in thousands) |
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Three months ended |
Six months ended |
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|
Jun
30, |
|
Jun
30, |
Net (loss)/income |
|
(157,863) |
|
28,154 |
|
162,182 |
|
(129,709) |
|
556,876 |
Income tax (benefit)/expense |
|
(23,283) |
|
14,356 |
|
44,730 |
|
(8,927) |
|
125,797 |
Interest income, net |
|
(8,730) |
|
(12,270) |
|
(12,751) |
|
(21,000) |
|
(24,698) |
Depreciation & Amortization |
|
44,958 |
|
46,669 |
|
35,835 |
|
91,627 |
|
62,234 |
EBITDA (non-GAAP) |
|
(144,918) |
|
76,909 |
|
229,996 |
|
(68,009) |
|
720,209 |
EBITDA margin (non-GAAP) |
|
(65.9 %) |
|
18.5 % |
|
36.1 % |
|
-10.7 % |
|
53.5 % |
|
Three months ended |
Six months ended |
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|
Jun
30, |
|
Jun
30, |
|
Net (loss)/income attributable to |
|
(119,780) |
|
15,473 |
|
103,723 |
|
(104,307) |
|
382,526 |
|
Share-based compensation |
|
20,963 |
|
20,574 |
|
30,824 |
|
41,537 |
|
62,225 |
|
Adjusted net (loss)/income (non-GAAP) |
|
(98,817) |
|
36,047 |
|
134,547 |
|
(62,770) |
|
444,751 |
|
Adjusted (loss)/earnings per basic ADS |
|
( |
|
|
|
|
|
( |
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Adjusted (loss)/earnings per diluted |
|
( |
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( |
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