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Daqo New Energy released its second quarter 2012 financial earnings, which saw the company post revenues of US$30.6 million, down from US$34 million in Q1 2012. Additionally, Daqo’s Q2 2012 polysilicon shipments were approximately 1,028MT, while its PV module shipments amounted to 3.6MW. Wafer shipments for the second quarter were 11.2MW.
Daqo noted that its revenues came mainly from the US$23.6 million of polysilicon sold. US$33 million in sales was generated from PV modules, while its wafer business brought in US$28 million.
Gross margin for Q2 2012 was finalized at -19.5%, compared to -32.2% in Q1 2012 and 46.6% in Q2 2011. Gross loss was US$5.9 million, compared to US$11 million in Q1. Daqo commented that its improvement in gross loss and margin from Q1 2012 was from the decrease in production costs.
“In the second quarter of 2012, we were running our Wanzhou polysilicon plant smoothly at full capacity. We have successfully reduced our polysilicon production cost, which is attributed to several technology improvements and the lower seasonal electricity rate. However, the solar PV industry continued its downward motion and the average selling prices for polysilicon, wafer and module remained weak. The international trade conflicts also had a negative impact on market demands," commented Gongda Yao, CEO of the Daqo New Energy. "As for the Xinjiang Phase II project, we have already completed 97% of the total construction by the end of July. Several units including liquid chlorine system, utilities system, TCS system, and distillation system, have already been tested and are ready for pilot production. We are confident to achieve our original goal to start pilot production this September and contribute over 500MT Polysilicon in the last four months of 2012."
"As for our wafer business, we are working with our business partner to improve our wafer manufacturing technology so as to achieve better quality with lower cost. We plan to gradually increase the utilization rate of our wafer plant, progressively to the level of full capacity, so that we will be able to minimize the loss in the interim as we move towards break-even, and eventually obtain positive cash flow in wafer business."
"Recently, our high quality polysilicon has been qualified by a semiconductor customer and we obtained the first order. In the second quarter, 90% of our polysilicon meets the standard of electronic grade III. Although the first order from this semiconductor customer is not significant in terms of volume, we think it's a new opportunity for the company to expand its business to a new market with higher margins." Yao concluded.
In looking ahead to Q3 2012, Daqo expects to ship 1,000-1,200MT of polysilicon, around 6MW of wafers, 8MW of OEM wafers and 3MW of modules.