China-based polysilicon and wafer producer Daqo New Energy reported that external sales volume and cost structure exceeded prior guidance as demand remained strong in the fourth quarter and full year 2015.
Daqo said that it had reached a record-high quarterly polysilicon production volume of 3,547MT, an increase of 31.9% from 2,689MT in the third quarter of 2015 and 12% above its name plate capacity, which had been expanded in 2015.
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Polysilicon production costs also reached a new benchmark for the modified Siemens process. Daqo said that it had reduced polysilicon average total production cost to US$9.74/kg and cash cost to US$7.69/kg in the fourth quarter, with plants running ahead of nameplate capacity.
Dr. Gongda Yao, CEO of Daqo New Energy said, “In the fourth quarter of 2015, we generated revenue of US$59.3 million, an increase of 27.3% as compared to the third quarter of 2015. We achieved EBITDA margin of 39.5%, which increased from 32.1% in the third quarter of 2015. Our income from operations was US$14.3 million, an increase of 113.4% from US$6.7 million in the third quarter of 2015. Despite a 7.5% reduction in polysilicon ASPs as compared to the third quarter of 2015, we were able to deliver higher gross margin, operating margin and net margin in the fourth quarter as compared to the third quarter, primarily as a result of our successful cost reduction efforts in polysilicon manufacturing.
Daqo reported fourth quarter revenus from polysilicon sales to external customers of US$42.9 million, compared to US$34.1 million in the third quarter of 2015.
External sales volume was 3,092MT during the fourth quarter, compared to 2,277MT in the third quarter of 2015. With the successful ramp up of the Company's phase 2B polysilicon expansion in Xinjiang, the company reached full production during the quarter and produced 3,547MT of polysilicon in the fourth quarter of 2015, an increase of 31.9% from 2,689 MT in the third quarter of 2015.
The company reported that polysilicon ASPs were US$13.86/kg in the fourth quarter of 2015, a decrease of 7.5% from US$14.98/kg in the third quarter of 2015.
The company reported wafer sales of US$16.4 million in the quarter, compared to US$12.5 million in the third quarter of 2015.
Wafer sales volume was 21.0 million pieces, compared to 19.1 million pieces in the third quarter of 2015.
Daqo reported full-year 2015 revenue of US$182.0, compared to US$182.6 million in 2014, primarily due to falling ASPs on higher shipments. External polysilicon sales volume increased by 37.9% from 5,972MT in 2014 to 8,234MT in 2015.
Revenues from polysilicon sales to external customers were US$125.9 million in 2015, compared to US$127.7 million in 2014. The polysilicon sold in 2014 and 2015 was mostly contributed by its Xinjiang facilities. During the third quarter of 2015 the company ramped its Phase 2B expansion project, which increased annual capacity from 6,150MT to 12,150MT, increasing production by 48.9% from 6,560 MT in 2014 to 9,771MT in 2015.
Revenues from wafer sales were US$56.1 million in 2015, compared to US$54.9 million in 2014. Wafer sales volume was 76.4 million pieces (320MW approx PV Tech estimates), compared to 70.5 million pieces in 2014.
Daqo said it expected to sell approximately 2,800MT to 3,000MT of polysilicon to external customers in the first quarter of 2016, due to increased consumption of polysilicon internally by its expanding wafer production. Wafer sales volume is expected to be approximately 21.5 million to 22.0 million pieces for the quarter.
“In February 2016, we began to see recovery in polysilicon ASPs, driven by strong customer demand for our high-purity polysilicon products. Furthermore, we saw overall polysilicon channel inventory reduced to a normal level by strong end market demand. As the industry and our customers continue to add on additional wafer capacities through 2016, we anticipate continued strong demand for polysilicon. As of March 2016, the spot market price for polysilicon has rebounded by approximately 15% as compared to December of 2015, and we expect to see stable to improving polysilicon ASPs in the coming quarters supported by strong end market demand and increases in downstream solar manufacturing capacities,” added Dr. Yao.
Wafer capacity expansion
The company also noted that it planned to expand wafer production from approximately 87 million pieces to an annual production capacity of 100 million pieces (410MW plus estimate by PV Tech) by mid-2016.