Daqo New Energy Corp. (NYSE: DQ) (“Daqo New Energy”, the “Company” or “we”), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced its unaudited financial results for the fourth quarter and fiscal year of 2018.

Fourth Quarter 2018 Financial and Operating Highlights

  • Polysilicon production volume of 7,301 MT in Q4 2018, compared to 4,734 MT in Q3 2018
  • Polysilicon external sales volume(1) of 7,030 MT in Q4 2018, compared to 6,199 MT in Q3 2018
  • Polysilicon average total production cost(2) of $7.94/kg in Q4 2018, compared to $8.94/kg in Q3 2018
  • Polysilicon average cash cost(2) of $6.64/kg in Q4 2018, compared to $7.12/kg in Q3 2018
  • Polysilicon average selling price (ASP) was $9.69/kg in Q4 2018, compared to $10.79/kg in Q3 2018
  • Revenue from continuing operations was $75.6 million in Q4 2018, compared to $67.4 million in Q3 2018
  • Gross profit from continuing operations was $16.9 million in Q4 2018, compared to $12.8 million in Q3 2018. Gross margin from continuing operations was 22.4% in Q4 2018, compared to 19.1% in Q3 2018
  • EBITDA (non-GAAP)(3) from continuing operations was $29.5 million in Q4 2018, compared to $14.8 million in Q3 2018
  • EBITDA margin (non-GAAP)(3) from continuing operations was 39.1% in Q4 2018, compared to 22.0% in Q3 2018
  • Net income from continuing operations was $17.1 million in Q4 2018, compared to $4.2 million in Q3 2018 and $57.7 million in Q4 2017
  • Net loss from discontinued operations was $5.7 million in Q4 2018, compared to $22.4 million in Q3 2018 and net loss from discontinued operations of $23.6 million in Q4 2017
  • Net income attributable to Daqo New Energy shareholders was $11.4 million in Q4 2018, compared to net loss attributable to Daqo New Energy shareholders of $18.3 million in Q3 2018 and net income attributable to Daqo New Energy shareholders of $33.7 million in Q4 2017.
  • Earnings per basic American Depository Share (ADS) was $0.86 in Q4 2018, compared to loss per basic ADS of $1.39 in Q3 2018, and earnings per basic ADS of $3.16 in Q4 2017
  • Adjusted net income (non-GAAP)(3) attributable to Daqo New Energy shareholders was $15.7 million in Q4 2018, compared to $4.3 million in Q3 2018 and $35.3 million in Q4 2017
  • Adjusted earnings per basic ADS (non-GAAP)(3) of $1.18 in Q4 2018, compared to $0.33 in Q3 2018, and$3.31 in Q4 2017

` Three months ended
US$ millions

except as indicated otherwise

Dec 31, 2018 Sept 30, 2018 Dec 31, 2017
Revenues 75.6 67.4 118.9
Gross profit 16.9 12.8 68.1
Gross margin 22.4% 19.1% 57.3%
Operating income 20.3 4.0 66.9
Net income from continuing operations 17.1 4.2 57.7
Loss from discontinued operations, net of tax (5.7) (22.4) (23.6)
Net income/(loss) attributable to Daqo New Energy Corp. shareholders 11.4 (18.3) 33.7
Earnings/(loss) per basic ADS ($ per ADS) 0.86 (1.39) 3.16
Adjusted net income (non-GAAP)(3) attributable to Daqo New Energy Corp. shareholders 15.7 4.3 35.3
Adjusted earnings per basic ADS (non-GAAP)(3) ($ per ADS) 1.18 0.33 3.31
EBITDA from continuing operations (non-GAAP)(3) 29.5 14.8 76.3
EBITDA margin(3) from continuing operations (non-GAAP) 39.1% 22.0% 64.2%
Polysilicon sales volume (MT) (1) 7,030 6,199 4,730
Polysilicon production cost ($/kg)(2) 7.94 8.94 9.40
Polysilicon cash cost (excl. dep’n) ($/kg)(2) 6.64 7.12 7.64

 

 Full Year 2018 Financial and Operating Highlights

l  Polysilicon production volume of 23,351 MT in 2018, compared to 20,200 MT in 2017

l  Polysilicon external sales volume(1) of 22,521 MT in 2018, compared to 17,950 MT in 2017

l  Revenue from continuing operations of $301.6 million in 2018, compared to $323.2 million in 2017

l  Gross profit from continuing operations was $98.1 million in 2018, compared to $144.0 million in 2017. Gross margin of 32.5% in 2018, compared to 44.6% in 2017

l  EBITDA (non-GAAP)(3) from continuing operation was $120.4 million in 2018, compared to $158.5 million in 2017

l  EBITDA margin (non-GAAP)(3) from continuing operations was 39.9% in 2018, compared to 49.0% in 2017

l  Net income attributable to Daqo New Energy Corp. shareholders was $38.1 million in 2018, compared to $92.8 million in 2017

l  Earnings per basic ADS was $3.06 in 2018, compared to $8.76 in 2017

l  Adjusted net income (non-GAAP)(3) attributable to Daqo New Energy Corp. shareholders was $71.6 million in 2018, compared to $99.5 million in 2017

l  Adjusted earnings per basic ADS (non-GAAP)(3) was $5.74 in 2018, compared to $9.38 in 2017

Source: Daqo New Energy

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Notes:

(1)   The Company’s polysilicon external sales volume excludes internal sales to Daqo New Energy’s Chongqing wafer manufacturing subsidiary, which utilizes polysilicon as raw material for the production of solar wafers and which the Company discontinued in September 2018. There are no internal sales in Q4 2018. The sales volume is the quantity of goods that have been received by customers, and thus the corresponding revenue has been recognized during the period indicated.

(2)   Production cost and cash cost only refer to production in our Xinjiang polysilicon facilities. Production cost is calculated by the inventoriable costs relating to production of polysilicon in Xinjiang divided by the production volume in the period indicted. Cash cost is calculated by the inventoriable costs relating to production of polysilicon excluding depreciation expense in Xinjiang, divided by the production volume in the period indicated.

(3) Daqo New Energy provides EBITDA from continuing operations, EBITDA margin from continuing operations adjusted net income attributable to Daqo New Energy Corp. shareholders and adjusted earnings per ADS on a non-GAAP basis to provide supplemental information regarding its financial performance. For more information on these non-GAAP financial measures, please see the section captioned “Use of Non-GAAP Financial Measures” and the tables captioned “Reconciliation of non-GAAP financial measures to comparable US GAAP measures” set forth at the end of this press release.

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