Daqo New Energy Returns to Profit in the Fourth Quarter
Daqo New Energy Corp. (NYSE: DQ) reported strong growth in both revenue and net income for its fourth quarter today, though its stock dropped nearly 2 percent and closed at $33.68 per share in New York.
The Wanzhou-based maker of polysilicon and wafers for solar panels posted a net profit of $11.4 million in the fourth quarter, compared with a net loss of $18.3 million in the previous quarter. Daqo reports polysilicon production volume of 7,301 MT, jumped 54 percent year-over-year, with external sales volume increasing 13 percent to 7,030 MT in the fourth quarter.
The company's revenue increased 12 percent to $75.6 million compared with the previous quarter, however it declined 36 percent on a year-over-year basis.
"With the successful ramp up of our new phase 3B facility and efforts of our operating team, both production volume and cost reduction targets were achieved with excellent results," said Longgen Zhang, CEO of Daqo New Energy. "During the fourth quarter of 2018, we successfully reduced our total production cost to $7.94/kg and our cash cost was lowered to $6.64/kg, representing our lowest cost structure in history."
With Xinjiang production facilities now running at full capacity, the management expects its factories to "produce approximately 8,500 to 8,700 MT of polysilicon during the first quarter of 2019."
Also, with reduction in unit utility usage, operating leverage and other cost savings, the company said it believes that it can further reduce its total production cost.
Looking ahead, the company said it would "conduct a debottlenecking project by gradually upgrading several older CVD furnaces beginning in mid-March through the end of June in 2019". The debottlenecking project is expected to have a limited impact on production volume. As such, the company expects to produce 7,600 to 7,800 MT in the second quarter of 2019.
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