Daqo posts Q2 results; China May Initiate Anti-dumping Probe Against EU Companies
| 17 August 2012
Posted in News - SPVI news
On a slightly positive note, Daqo was able to reduce its gross loss from $11M in the first quarter to $5.9M in the second quarter of 2012
The China-based polysilicon manufacturer Daqo New Energy Corp (NYSE: DQ) has released its second quarter unaudited results for 2012. Revenues have fallen from $34M in the first quarter to $30.6M in the second quarter. Most of the total earnings, i.e., 77% ($23.6M), have come from the sale of 1,028MT of polysilicon, the company’s core business area. In the previous quarter, polysilicon sales were 964MT and in Q2 2011, they were 1,001 MT. However, due to a continuous decline in average selling prices, the revenues have not increased.
The PV modules and wafer shipments in the second quarter were 3.6MW and 11.2MW, which translated into earnings of $3M and $2.8M, respectively. In the previous quarter, these figures were $1.9M and $6.2M, while a year ago, in Q2 2011, they were $6.8M and $0.9M. The increase in revenue was achieved due to higher sales volume, while the decrease was attributed to a decline in selling prices.
On a slightly positive note, Daqo was able to reduce its gross loss from $11M in the first quarter to $5.9M in the second quarter of 2012, an almost 46% improvement. However, compared to the gross profit of $33M in Q2 2011, the business is nowhere near its peak. The reduction in gross loss was also represented in better gross margin from -32.2% in Q1 2012 to the current -19.5%. Net loss was $7.06M, which is translated as loss per share of $0.20. This was an improvement from the loss of $13.7M in the previous quarter, but was still considerably lower than the profit of $25M a year ago. Analysts were expecting Daqo to post a loss per share of $0.29; in those terms, the company has performed better.
The improvement was because the company was able to achieve considerable reductions in production costs due to the use of better technology and reduction in electricity expenses. For Q3, Daqo aims to supply 1000-1200 MT of polysilicon, 6MW of wafers, 8MW of wafers OEM and 3MW of PV modules. The business aims to further expand with technologically advanced products.
In another development, the China – EU solar dumping case took an interesting turn today when Xinhua, the official Chinese news agency, revealed that the country’s Ministry of Commerce (MOFCOM) is considering a request by the four Chinese polysilicon manufacturers, which include Jiangsu Zhongneng Polysilicon, a subsidiary of GCL-Poly Energy Holdings Limited. (HKG: 3800), to start anti-subsidy and anti-dumping investigations on polysilicon exported from the EU.
Most of the polysilicon exported from the EU into China, which is then used to manufacture solar panels, has come from the German-based Wacker Chemie AG (ETR: WCH). A month ago, China had revealed that it would start anti-dumping investigations against US and South Korean polysilicon manufacturers on the complaint of its polysilicon producers. GCL-Poly, Daqo and LDK Solar Co., Ltd (ADR) (NYSE: LDK) are the leading polysilicon manufacturers in China.
