Daqo New Energy Announces Unaudited Third Quarter 2024 Results
Third Quarter 2024 Financial and Operating Highlights
- Polysilicon production volume was 43,592 MT in Q3 2024, compared to 64,961 MT in Q2 2024
- Polysilicon sales volume was 42,101 MT in Q3 2024, compared to 43,082 MT in Q2 2024
- Polysilicon average total production cost(1) was
$6.61 /kg in Q3 2024 compared to$6.19 /kg in Q2 2024 - Polysilicon average cash cost(1) was
$5.34 /kg in Q3 2024, compared to$5.39 /kg in Q2 2024 - Polysilicon average selling price (ASP) was
$4.69 /kg in Q3 2024, compared to$5.12 /kg in Q2 2024 - Revenue was
$198.5 million in Q3 2024, compared to$219.9 million in Q2 2024 - Gross loss was
$60.6 million in Q3 2024, compared to$159.2 million in Q2 2024. Gross margin was -30.5% in Q3 2024, compared to -72.4% in Q2 2024 - Net loss attributable to
Daqo New Energy Corp. shareholders was$60.7 million in Q3 2024, compared to$119.8 million in Q2 2024 - Loss per basic American Depositary Share (ADS) (3) was
$0.92 in Q3 2024, compared to$1.81 in Q2 2024 - Adjusted net loss (non-GAAP) (2) attributable to
Daqo New Energy Corp. shareholders was$39.4 million in Q3 2024, compared to$98.8 million in Q2 2024 - Adjusted loss per basic ADS(3) (non-GAAP) (2) was
$0.59 in Q3 2024, compared to$1.50 in Q2 2024 - EBITDA (non-GAAP) (2) was -
$34.3 million in Q3 2024, compared to-$144.9 million in Q2 2024. EBITDA margin (non-GAAP) (2) was -17.3% in Q3 2024, compared to -65.9% in Q2 2024
|
Three months ended |
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US$ millions except as indicated otherwise |
September. 30, 2024 |
June. 30, 2024 |
September. 30, 2023 |
Revenues |
198.5 |
219.9 |
484.8 |
Gross (loss)/profit |
(60.6) |
(159.2) |
67.8 |
Gross margin |
(30.5 %) |
(72.4 %) |
14.0 % |
(Loss)/income from operations |
(98.0) |
(195.6) |
22.5 |
Net loss attributable to shareholders |
(60.7) |
(119.8) |
(6.3) |
Loss per basic ADS(3) ($ per ADS) |
(0.92) |
(1.81) |
(0.09) |
Adjusted net (loss)/income (non-GAAP)(2) attributable to Daqo New Energy Corp. shareholders |
(39.4) |
(98.8) |
44.0 |
Adjusted (loss)/earnings per basic ADS(3) (non- GAAP)(2) ($ per ADS) |
(0.59) |
(1.50) |
0.59 |
EBITDA (non-GAAP)(2) |
(34.3) |
(144.9) |
70.2 |
EBITDA margin (non-GAAP)(2) |
(17.3 %) |
(65.9 %) |
14.5 % |
Polysilicon sales volume (MT) |
42,101 |
43,082 |
63,263 |
Polysilicon average total production cost ($/kg)(1) |
6.61 |
6.19 |
6.52 |
Polysilicon average cash cost (excl. dep'n) ($/kg)(1) |
5.34 |
5.39 |
5.67 |
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.
During the third quarter, we started maintenance of our facilities and adjusted our production utilization rate to 50% in light of weak market demand and to reduce our cash burn. The total production volume at our two polysilicon facilities for the quarter was 43,592 MT. Through continued investments in R&D and dedication to purity improvements at both facilities, our overall N-type product mix reached 75% during the quarter. Our Phase 5B, which started initial production in May and is still ramping up, reached 70% N-type in its product mix, strengthening our confidence in achieving 100% N-type by the end of next year. Despite lower utilization levels, we further reduced our cash cost to
"In light of the current market conditions, we expect our Q4 2024 total polysilicon production volume to be approximately 31,000 MT to 34,000 MT. As a result, we anticipate our full year 2024 production volume to be in the range of 200,000 MT to 210,000 MT."
"During the third quarter, challenging market conditions forced more industry players to reduce production utilization rates and begin maintenance. Based on industry statistics, polysilicon supply in
"This year is challenging for
"Overall, in the long-run, solar PV is expected to be one of the most competitive forms of power generation globally, and the continuous cost reductions in solar PV products and the resulting reductions in solar energy generation costs are expected to create substantial additional demand for solar PV. We are optimistic that we will capture the long-term benefits of the growing global solar PV market and maintain our competitive advantage by enhancing our higher-efficiency N-type technology and optimizing our cost structure through digital transformation and AI adoption. As one of the world's lowest-cost producers with the highest quality N-type product, a strong balance sheet and no financial debt, we believe we are well positioned to weather the current market downturn and emerge as one of the leaders in the industry to capture future growth."
Outlook and guidance
The Company expects to produce approximately 31,000 MT to 34,000 MT of polysilicon during the fourth quarter of 2024. The Company expects to produce approximately 200,000 MT to 210,000 MT of polysilicon for the full year of 2024, inclusive of the impact of the Company's annual facility maintenance.
This outlook reflects
Third 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 abovementioned, loss from operations was
Operating margin was -49.4%, compared to -89.0% in the second quarter of 2024 and 4.6% in the third quarter of 2023.
Net (loss)/income attributable to
As a result of the abovementioned, net loss attributable to
Loss per basic American Depository Share (ADS) was
Adjusted (loss)/income (non-GAAP) attributable to
As a result of the aforementioned, adjusted net loss (non-GAAP) attributable to
Adjusted loss per basic American Depository Share (ADS) was
EBITDA (non-GAAP)
EBITDA (non-GAAP) was -
Financial Condition
As of
Cash Flows
For the nine months ended
For the nine months ended
For the nine 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=ezkSfxNd
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: 9504502
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
Unaudited Condensed Consolidated Statement of Operations (US dollars in thousands, except ADS and per ADS data) |
||||||||||
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Three months ended |
Nine months ended |
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|
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
(259,090) |
|
(379,074) |
|
(417,025) |
|
(981,390) |
|
(997,943) |
Gross (loss)/profit |
|
(60,594) |
|
(159,160) |
|
67,814 |
|
(147,669) |
|
833,454 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
(37,727) |
|
(37,526) |
|
(89,697) |
|
(113,686) |
|
(174,238) |
Research and development expenses |
|
(813) |
|
(1,836) |
|
(2,758) |
|
(4,187) |
|
(6,866) |
Other operating income/(expense) |
|
1,092 |
|
2,903 |
|
47,112 |
|
2,389 |
|
47,789 |
Total operating expenses |
|
(37,448) |
|
(36,459) |
|
(45,343) |
|
(115,484) |
|
(133,315) |
(Loss)/income from operations |
|
(98,042) |
|
(195,619) |
|
22,471 |
|
(263,153) |
|
700,139 |
Interest income, net |
|
1,604 |
|
8,730 |
|
13,832 |
|
22,603 |
|
38,529 |
Foreign exchange gain/(loss) |
|
(752) |
|
(1,406) |
|
3,143 |
|
(2,427) |
|
(16,571) |
Investment income/(loss) |
|
8,253 |
|
7,149 |
|
(165) |
|
15,402 |
|
(143) |
(Loss)/income before income taxes |
|
(88,937) |
|
(181,146) |
|
39,281 |
|
(227,575) |
|
721,954 |
Income tax benefit/(expense) |
|
12,007 |
|
23,283 |
|
(21,438) |
|
20,934 |
|
(147,236) |
Net (loss)/income |
|
(76,930) |
|
(157,863) |
|
17,843 |
|
(206,641) |
|
574,718 |
Net (loss)/income attributable to non- controlling interest |
|
(16,206) |
|
(38,083) |
|
24,155 |
|
(41,608) |
|
198,505 |
Net (loss)/income attributable to
|
|
(60,724) |
|
(119,780) |
|
(6,312) |
|
(165,033) |
|
376,213 |
|
|
|
|
|
|
|
|
|
|
|
(Loss)/earnings per ADS |
|
(0.92) |
|
(1.81) |
|
(0.09) |
|
(2.50) |
|
4.93 |
Basic |
|
|
|
|
|
|||||
Diluted |
|
(0.92) |
|
(1.81) |
|
(0.09) |
|
(2.50) |
|
4.89 |
Weighted average ADS outstanding |
|
|
|
|
|
|
|
|
|
|
Basic |
|
66,306,870 |
|
66,002,970 |
|
74,038,122 |
|
66,007,875 |
76,351,635 |
|
Diluted |
|
66,306,870 |
|
66,002,970 |
|
74,152,055 |
|
66,007,875 |
76,665,986 |
Unaudited Condensed Consolidated Balance Sheets (US dollars in thousands) |
||||||
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS: |
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
|
853,401 |
|
997,481 |
|
3,280,816 |
Short-term investments |
|
244,982 |
|
219,469 |
|
2,749 |
Accounts and notes receivable |
|
84,507 |
|
80,719 |
|
275,843 |
Inventories |
|
206,877 |
|
191,969 |
|
129,067 |
Fixed term deposit within one year |
|
1,215,165 |
|
1,168,032 |
|
- |
Other current assets |
|
292,610 |
|
272,404 |
|
150,633 |
Total current assets |
|
2,897,542 |
|
2,930,074 |
|
3,839,108 |
Property, plant and equipment, net |
|
3,903,436 |
|
3,781,330 |
|
3,237,803 |
Prepaid land use right |
|
159,853 |
|
155,197 |
|
147,774 |
Fixed term deposit over one year |
|
28,536 |
|
27,366 |
|
- |
Other non-current assets |
|
59,338 |
|
46,534 |
|
70,956 |
TOTAL ASSETS |
|
7,048,705 |
|
6,940,501 |
|
7,295,641 |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and notes payable |
|
40,860 |
|
64,208 |
|
100,466 |
Advances from customers-short term portion |
|
56,240 |
|
59,015 |
|
252,262 |
Payables for purchases of property, plant and equipment |
|
454,364 |
|
436,286 |
|
292,488 |
Other current liabilities |
|
77,597 |
|
82,086 |
|
165,102 |
Total current liabilities |
|
629,061 |
|
641,595 |
|
810,318 |
Advance from customers – long term portion |
|
76,734 |
|
102,861 |
|
104,206 |
Other non-current liabilities |
|
18,489 |
|
18,012 |
|
33,526 |
TOTAL LIABILITIES |
|
724,284 |
|
762,468 |
|
948,050 |
EQUITY: |
|
|
|
|
|
|
equity |
|
4,705,832 |
|
4,593,003 |
|
4,733,218 |
Non-controlling interest |
|
1,618,589 |
|
1,585,030 |
|
1,614,373 |
Total equity |
|
6,324,421 |
|
6,178,033 |
|
6,347,591 |
TOTAL LIABILITIES & EQUITY |
|
7,048,705 |
|
6,940,501 |
|
7,295,641 |
Unaudited Condensed Consolidated Statements of Cash Flows (US dollars in thousands) |
||||
|
||||
|
For the nine months ended |
|||
|
|
2024 |
|
2023 |
Operating Activities: |
|
|
|
|
Net (loss)/income |
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
395,599 |
|
235,283 |
Changes in operating assets and liabilities |
|
(565,447) |
|
687,435 |
Net cash (used in)/provided by operating activities |
|
(376,489) |
|
1,497,436 |
|
|
|
|
|
Investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
(325,558) |
|
(887,875) |
Purchases of land use right |
|
(10,089) |
|
(77,220) |
Purchase and redemption of short-term investments and fixed-term deposits |
|
(1,412,100) |
|
10,805 |
Net cash used in investing activities |
|
(1,747,747) |
|
(954,290) |
|
|
|
|
|
Financing activities: |
|
|
|
|
Net cash used in financing activities |
|
(48,498) |
|
(602,006) |
|
|
|
|
|
Effect of exchange rate changes |
|
(21,821) |
|
(180,675) |
Net decrease in cash, cash equivalents and restricted cash |
|
(2,194,555) |
|
(239,535) |
Cash, cash equivalents and restricted cash at the beginning of the period |
|
3,047,956 |
|
3,520,351 |
Cash, cash equivalents and restricted cash at the end of the period |
|
853,401 |
|
3,280,816 |
Reconciliation of non-GAAP financial measures to comparable US GAAP measures (US dollars in thousands) |
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|
Three months ended |
Nine months ended |
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|
|
Sep 30, 2024 |
|
Jun 30, 2024 |
|
2023 |
|
Sep 30, 2024 |
|
Sep 30, 2023 |
Net (loss)/income |
(76,930) |
|
(157,863) |
|
17,843 |
|
(206,641) |
|
574,718 |
|
Income tax (benefit)/expense |
|
(12,007) |
|
(23,283) |
|
21,438 |
|
(20,934) |
|
147,236 |
Interest income, net |
|
(1,604) |
|
(8,730) |
|
(13,832) |
|
(22,603) |
|
(38,529) |
Depreciation & Amortization |
|
56,218 |
|
44,958 |
|
44,765 |
|
147,845 |
|
106,999 |
EBITDA (non-GAAP) |
|
(34,323) |
|
(144,918) |
|
70,214 |
|
(102,333) |
|
790,424 |
EBITDA margin (non-GAAP) |
|
(17.3 %) |
|
(65.9 %) |
|
14.5 % |
|
(12.3 %) |
|
43.2 % |
|
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|
Three months ended |
Nine months ended |
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|
|
Sep 30, 2024 |
|
Jun 30, 2024 |
|
2023 |
|
Sep 30, 2024 |
|
Sep 30, 2023 |
Net (loss)/income attributable to
|
|
(60,724) |
|
(119,780) |
|
(6,312) |
|
(165,033) |
|
376,213 |
Share-based compensation |
|
21,312 |
|
20,963 |
|
50,287 |
|
62,850 |
|
112,696 |
Adjusted net (loss)/income (non-GAAP)
attributable to shareholders |
|
(39,412) |
|
(98,817) |
|
43,975 |
|
(102,183) |
|
488,909 |
Adjusted (loss)/earnings per basic ADS (non-GAAP) |
|
( |
|
( |
|
|
|
( |
|
|
Adjusted (loss)/earnings per diluted ADS (non-GAAP) |
|
( |
|
( |
|
|
|
( |
|
|
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