Daqo New Energy (Daqo) announced unaudited financial results for the second quarter of 2016. The polysilicon business grew from QoQ in the overall.
Production and sale
In 2Q16, Daqo’s polysilicon production volume was slightly higher than 3,405MT in 1Q16, up to 3,570MT. The external sales was 2,931MT, up from 2,905MT in 1Q. Polysilicon’s average total production cost was reduced from US$9.65/kg in 1Q to US$9.43/kg in 2Q, and the average cash cost was lowered from US$7.62/kg to US$7.42/kg over the quarterly period.
The average selling price (ASP) of Daqo’s polysilicon increased by 25.7% QoQ to US$17.24/kg in 2Q.
As for wafers, the sales volume was 25 million pieces in 2Q, representing a 13.1% increase compared to 1Q.
Financial results
The revenue of US$71 million in 2Q16 represents a 23.1% increase from US$57.7 million in 1Q16 and 107% increase from US$34.3 million in 2Q15.
"In the second quarter of 2016, the demand for polysilicon was very strong. We saw substantial increase in polysilicon orders and shipments across a wide range of customers,” commented Dr. Gongda Yao, Chief Executive Officer of Daqo.
Gross profit increased by 76% QoQ and 716.7% YoY to US$29 million in this quarter. Non-GAAP gross profit, which excludes costs related to the non-operational polysilicon operations in Chongqing, was approximately US$31.2 million, compared to US$18.8 million in 1Q16 and US$6.7 million in 2Q15.
Gross margin was 41.4%, significantly higher than 29.0% in 1Q16 and 10.5% in 2Q15.
Dr. Yao said that Daqo delivered the best-ever quarter in terms of operational performance and excellent financial results. “We achieved revenues of $71.0 million, with non-GAAP gross margin of 43.9%, and EBITDA margin of 48.9%, and GAAP earnings per basic ADS of $1.90,” noted Yao.
The net income attributable to Daqo shareholders was US$19.8 million, increasing 138.6% from US$8.3 million in 1Q16. Earning per basic ADS were increased by 137.5% QoQ, while the company incurred loss per basic ADS of US$0.09 in 2Q15.
Expansion
Daqo plans to ramp up its Phase 3A polysilicon facilities in early 2017, which will bring the company’s annual capacity to 18,000MT.
In advance of the capacity realization of Phase 3A facilities, Daqo expects to sell approximately 2,550 MT to 2,600 MT of polysilicon to external customers during Q3 2016 with its new Phase 2B polysilicon capacity, which was arranged completely in June 2015 with a production capacity of 13,200MT.