- Industry Roundup
- Fab & Facilities
- Cell Processing
- Thin Film
- PV Modules
- Power Generation
China-based polysilicon producer Daqo New Energy reported fourth quarter 2012 sales of only US$6.2 million, compared to US$21.1 million in the prior quarter.
The company shut its main polysilicon production plant in Wanzhou, China for annual plant maintenance during the fourth quarter - compared to just two weeks in 2011 - while ramping pilot production of its Phase 2 plant in Xinjiang, China.
Polysilicon shipments in Q4 2012 were 592MT, inline with previous guidance of 550-600MT, but down significantly from 834MT shipped in the fourth quarter of 2011. However, the company said that revenue from sales from polysilicon made at its Xinjiang facility during pilot production period were excluded from the revenues recorded in the quarter. Pilot production shipments from the new facility in the quarter was said to have been 323MT.
However, management noted in a conference call to discuss financial results that the company had sold off its total polysilicon inventory balance of 2,094MT from its Wanzhou facility in the quarter.
Daqo reported a small, 4.8MW of wafer shipments in Q4 2012, well below previous guidance of 10MW for the quarter. The company had also previously guided it would provide between 100-120MT of ingot and block manufacturing outsourcing services but reported shipments of 33MT of polysilicon ingots for the fourth quarter.
Daqo continued to report quarterly losses. Fourth quarter gross loss was US$11.1 million, compared to US$10.8 million in the third quarter of 2012. Gross margin was negative 178.5%, compared to negative 51.1% in the third quarter of 2012.
The company reported a quarterly operating loss of US$55.9 million, compared to US$15.7million in the third quarter of 2012.
Due to the decline in wafer prices in 2012, Daqo made significant asset impairment charges against its wafer facilities of US$42.8 million.
Net loss was US$75.3 million compared to US$15.5 million in the third quarter of 2012.
For the full year 2012, Daqo reported a gross loss of US$37.4 million, compared to gross profit of US$87.2 million in 2011. Gross margin in 2012 was negative 43.1%, compared to positive 37.6% in 2011.
Operating loss was US$88.5 million, compared to operation income of US$50.8 million in 2011. Net loss in 2012 was US$111.9 million, compared to net income of US$33.3 million in 2011.
Daqo said that at the end of 2012 it had only US$17.3 million in cash and cash equivalents, a decrease of US$36.5 million from the prior quarter due primarily to debt repayments and the capital spending on plant upgrades at its Xinjiang facility.
However, management noted in the call that its working capital was negative US$164 million.
Bing Sun, chief financial officer of Daqo, said in the call: “We are confident that we can renew our credit facility of US$65 million in 2013 and obtain the remaining amount of US$36.5 million project loan with Bank of China related to Xinjiang Phase II projects. And the working capital deficit that we might have, we have already got the commitment from Daqo Group. Daqo Group has the ability and the will to financially support Daqo New Energy when necessary.”
Management also noted that polysilicon costs at Xinjiang were now below US$20/kg, importantly bringing production costs almost in line with current spot prices, something the company had previously been unable to achieve.
According to Gongda Yao, CEO of Daqo, the company had entered into new long-term supply agreements for polysilicon, resulting in the Xinjiang facility being “booked out”.
“We expect our Xinjiang facilities will start to generate positive cash flows in the first quarter of 2013,” added Yao in the conference call.
Daqo said that it expected polysilicon shipments in the first quarter of 2013 to be around 720MT. Wafer shipments would decline to around 3.6MW and polysilicon ingots shipments would increase significantly to around 150MT metric ton. In addition, the company expects to ship 200MT of polysilicon to its internal wafer manufacturing business. Daqo does not provide revenue guidance.