FX.co ★ Daqo New Energy Q1 Net Profit Tanks; Stock Down In Pre-market

Daqo New Energy Corp., a China-based manufacturer of monocrystalline silicon and polysilicon for solar photovoltaic systems, reported a substantial decline in its net profits for the year's first quarter. The fall in profits is attributed to a decrease in revenue, a drop in the average selling price of polysilicon, and higher inventory levels.

Subsequent to the announcement, Daqo's shares fell by 3.66 percent to $22.87 in pre-market trading on the New York Stock Exchange. The company's net income for the quarter stood at $15.5 million, noticeably below the previous year's Q1 figures of $278.804 million.

Daqo's per-share earnings for American Depository Shares (ADS) were $0.24, a stark contrast to the $3.52 per ADS recorded a year ago. When special items are excluded, earnings amounted to $36 million, a significant drop from the previous year's $310.205 million.

The adjusted per-ADS earnings were reported at $0.55, compared to $3.93 the previous year. The company's income before taxes also fell sharply to $42.510 million, from last year's figures of $475.762 million.

When special items are excluded, earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at 76.9 million, a significant drop from the previous year's $490.214 million. The company's operating income also plummeted to $30.5 million, a steep fall from the $463.802 million of the previous year.

Revenues fell to $415.3 million, a noticeable decrease from the 2023 revenues of $709.834 million. Looking forward, Daqo's CEO, Xiang Xu, forecasted that the total polysilicon production volume for Q2 2024 would be around 60,000 MT to 63,000 MT, matching Q1 2024 levels as the company maintains full production.

He further stated that the company plans to initiate pilot production at its new facility, Inner Mongolia Phase 5B, in Q2 2024 and reach full production by the end of Q3 2024. Consequently, the expected full-year 2024 production volume is projected to be within 280,000 MT to 300,000 MT range, which stands at approximately 40% to 50% above the 2023 figures.