Daqo New Energy Announces Unaudited Fourth Quarter and Fiscal Year 2023 Results
Fourth Quarter 2023 Financial and Operating Highlights
- Polysilicon production volume was 61,014 MT in Q4 2023, compared to 57,664 MT in Q3 2023
- Polysilicon sales volume was 59,906 MT in Q4 2023, compared to 63,263 MT in Q3 2023
- Polysilicon average total production cost(1) was
$6.50 /kg in Q4 2023, compared to$6.52 /kg in Q3 2023 - Polysilicon average cash cost(1) was
$5.72 /kg in Q4 2023, compared to$5.67 /kg in Q3 2023 - Polysilicon average selling price (ASP) was
$7.97 /kg in Q4 2023, compared to$7.68 /kg in Q3 2023 - Revenue was
$477.1 million in Q4 2023, compared to$484.8 million in Q3 2023 - Gross profit was
$87.2 million in Q4 2023, compared to$67.8 million in Q3 2023. Gross margin was 18.3% in Q4 2023, compared to 14.0% in Q3 2023 - Net income attributable to
Daqo New Energy Corp. shareholders was$44.9 million in Q4 2023, compared to net loss attributable toDaqo New Energy Corp. shareholders of$6.3 million in Q3 2023 - Earnings per basic American Depositary Share (ADS)(3) was
$0.64 in Q4 2023, compared to loss per basic ADS of$0.09 in Q3 2023 - Adjusted net income (non-GAAP)(2) attributable to
Daqo New Energy Corp. shareholders was$66.0 million in Q4 2023, compared to$44.0 million in Q3 2023 - Adjusted earnings per basic ADS(3) (non-GAAP)(2) was
$0.94 in Q4 2023, compared to$0.59 in Q3 2023 - EBITDA (non-GAAP)(2) was
$128.2 million in Q4 2023, compared to$70.2 million in Q3 2023. EBITDA margin (non-GAAP)(2) was 26.9% in Q4 2023, compared to 14.5% in Q3 2023
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Three months ended |
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US$ millions except as indicated otherwise |
December. |
September. |
December. |
Revenues |
477.1 |
484.8 |
864.3 |
Gross profit |
87.2 |
67.8 |
668.9 |
Gross margin |
18.3 % |
14.0 % |
77.4 % |
Income from operations |
83.3 |
22.5 |
623.1 |
Net income/(loss) attributable to Daqo New Energy |
44.9 |
(6.3) |
332.7 |
Earnings/(loss) per basic ADS(3) ($ per ADS) |
0.64 |
(0.09) |
4.26 |
Adjusted net income (non-GAAP)(2) attributable to |
66.0 |
44.0 |
363.1 |
Adjusted earnings per basic ADS(3) (non-GAAP)(2) |
0.94 |
0.59 |
4.65 |
EBITDA (non-GAAP) (2) |
128.2 |
70.2 |
648.5 |
EBITDA margin (non-GAAP)(2) |
26.9 % |
14.5 % |
75.0 % |
Polysilicon sales volume (MT) |
59,906 |
63,263 |
23,400 |
Polysilicon average total production cost ($/kg) (1) |
6.50 |
6.52 |
7.69 |
Polysilicon average cash cost (excl. dep'n) ($/kg) (1) |
5.72 |
5.67 |
6.78 |
Full Year 2023 Financial and Operating Highlights
- Polysilicon production volume was 197,831 MT in 2023, compared to 133,812 MT in 2022
- Polysilicon sales volume was 200,002 MT in 2023, compared to 132,909 MT in 2022
- Revenue was
$2,308.5 million in 2023, compared to$4,608.4 million in 2022 - Gross profit was
$920.7 million in 2023, compared to$3,407.9 million in 2022. Gross margin was 39.9% in 2023, compared to 74.0% in 2022 - Net income attributable to
Daqo New Energy Corp. shareholders was$421.2 million in 2023, compared to$1,819.8 million in 2022. Earnings per basic ADS was$5.64 in 2023, compared to$24.00 in 2022 - EBITDA (non-GAAP)(2) was
$918.6 million in 2023, compared to$3,150.7 million in 2022. EBITDA margin (non-GAAP)(2) was 39.8% in 2023, compared to 68.4% in 2022 - Adjusted net income (non-GAAP)(2) attributable to
Daqo New Energy Corp. shareholders was$554.7 million in 2023, compared to$2,122.3 million in 2022 - Adjusted earnings per basic ADS(3) (non-GAAP)(2) was
$7.42 in 2023, compared to$27.97 in 2022
Notes:
(1) Production cost and cash cost only refer to production in our polysilicon facilities. Production cost is calculated by the inventoriable costs relating to production of polysilicon divided by the production volume in the period indicated. Cash cost is calculated by the inventoriable costs relating to production of polysilicon excluding depreciation and non-cash share-based compensation, divided by the production volume in the period indicated.
(2)
(3) ADS means American Depositary Share. One (1) ADS represents five (5) ordinary shares.
Management Remarks
Mr.
During the fourth quarter, continued optimization of operations and improvements in yield and throughput at our two polysilicon facilities resulted in total production volume of 61,014 MT, an increase of 3,350 MT compared to the previous quarter. Our new
"We expect Q1 2024 total polysilicon production volume to be approximately 60,000 MT to 62,000 MT, similar to that for Q4 2023 as the Company maintains full production. We plan to begin initial production at our new
"Industry polysilicon prices in Q4 declined from approximately
"Regarding the Company's
"2023 was an unprecedented year, marking a step change for renewable power growth. The global acceleration in the transition to renewable energy was primarily driven by
Outlook and guidance
The Company expects to produce approximately 60,000MT to 62,000MT of polysilicon during the first quarter of 2024. The Company expects to produce approximately 280,000MT to 300,000MT of polysilicon for the full year of 2024, inclusive of the impact of the Company's annual facility maintenance.
This outlook reflects
Fourth Quarter 2023 Results
Revenues
Revenues were
Gross profit and margin
Gross profit was
Selling, general and administrative expenses
Selling, general and administrative expenses were
Research and development expenses
Research and development (R&D) expenses were
Foreign exchange (loss)/gain
Foreign exchange loss was
Income from operations and operating margin
As a result of the abovementioned, income from operations was
Operating margin was 17.5%, compared to 4.6% in the third quarter of 2023 and 72.1% in the fourth quarter of 2022.
Net income/(loss) attributable to
As a result of the abovementioned, net income attributable to
Earnings per basic American Depository Share (ADS) was
Adjusted income (non-GAAP) attributable to
As a result of the aforementioned, adjusted net income (non-GAAP) attributable to
Adjusted earnings per basic American Depository Share (ADS) was
EBITDA (non-GAAP)
EBITDA (non-GAAP) was
Full Year 2023 Results
Revenues
Revenues were
Gross profit and margin
Gross profit was
Selling, general and administrative expenses
Selling, general and administrative expenses were
Research and development expenses
Research and development (R&D) expenses were
Income from operations and operating margin
As a result of the foregoing, income from operations was
Interest income, net
Interest income, net was
Income tax expense
Income tax expense was
Net income attributable to
Net income attributable to
Adjusted net income (non-GAAP) attributable to
EBITDA
EBITDA (non-GAAP) was
Financial Condition
As of
Cash Flows
For the twelve months ended
For the twelve months ended
For the twelve months ended
Use of Non-GAAP Financial Measures
To supplement
The Company uses EBITDA, which represents earnings before interest, taxes, depreciation and amortization, and EBITDA margin, which represents the proportion of EBITDA in revenues. Adjusted net income attributable to
A reconciliation of non-GAAP financial measures to comparable US GAAP measures is presented later in this document.
Conference Call
The Company has scheduled a conference call to discuss the results at 8:00 AM
The dial-in details for the earnings conference call are as follows:
Participant dial in (
Participant international dial in: +1-412-902-4272
Please dial in 10 minutes before the call is scheduled to begin and ask to join the
Webcast link:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=ZH6URNsB
A replay of the call will be available 1 hour after the conclusion of the conference call through
International toll: +1-412-317-0088
Replay access code: 3690953
To access the replay through an international dial-in number, please select the link below.
https://services.choruscall.com/ccforms/replay.html
Participants will be asked to provide their name and company name upon entering the call.
About
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the
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Unaudited Condensed Consolidated Statement of Operations |
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(US dollars in thousands, except ADS and per ADS data) |
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Three months ended |
Year ended |
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2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
(389,937) |
|
(417,025) |
|
(195,368) |
|
(1,387,880) |
|
(1,200,428) |
Gross profit |
|
87,196 |
|
67,814 |
|
668,884 |
|
920,650 |
|
3,407,922 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
(39,004) |
|
(89,697) |
|
(43,979) |
|
(213,241) |
|
(354,074) |
Research and development expenses |
|
(3,250) |
|
(2,758) |
|
(2,738) |
|
(10,116) |
|
(10,041) |
Other operating income/(expense) |
|
38,349 |
|
47,112 |
|
903 |
|
86,137 |
|
(3,181) |
Total operating expenses |
|
(3,905) |
|
(45,343) |
|
(45,814) |
|
(137,220) |
|
(367,296) |
Income from operations |
|
83,291 |
|
22,471 |
|
623,070 |
|
783,430 |
|
3,040,626 |
Interest income, net |
|
13,772 |
|
13,832 |
|
12,030 |
|
52,301 |
|
14,473 |
Foreign exchange (loss)/gain |
|
(796) |
|
3,143 |
|
- |
|
(17,367) |
|
680 |
Investment income |
|
253 |
|
(165) |
|
(132) |
|
109 |
|
1,110 |
Income before income taxes |
|
96,520 |
|
39,281 |
|
634,968 |
|
818,473 |
|
3,056,889 |
Income tax expense |
|
(26,737) |
|
(21,438) |
|
(148,675) |
|
(173,973) |
|
(577,247) |
Net income |
|
69,783 |
|
17,843 |
|
486,293 |
|
644,500 |
|
2,479,642 |
Net income attributable to non-controlling |
|
24,837 |
|
24,155 |
|
153,559 |
|
223,342 |
|
659,841 |
Net income/(loss) attributable to |
|
|
|
( |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per ADS |
|
0.64 |
|
(0.09) |
|
4.26 |
|
5.64 |
|
24.00 |
Basic |
|
|
|
|
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|||||
Diluted |
|
0.64 |
|
(0.09) |
|
4.71 |
|
5.62 |
|
23.35 |
Weighted average ADS outstanding |
|
|
|
|
|
|
|
|
|
|
Basic |
|
69,862,986 |
|
74,038,122 |
|
78,052,481 |
|
74,717,201 |
75,873,062 |
|
Diluted |
|
69,905,271 |
|
74,152,055 |
|
78,898,049 |
|
74,963,535 |
77,291,968 |
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Unaudited Condensed Consolidated Balance Sheets |
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(US dollars in thousands) |
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ASSETS: |
|
|
|
|
|
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Current Assets: |
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
|
3,047,956 |
|
3,280,816 |
|
3,520,351 |
|
Short-term investments |
|
- |
|
2,749 |
|
13,927 |
|
Notes receivable |
|
116,358 |
|
275,843 |
|
1,131,566 |
|
Inventories |
|
173,271 |
|
129,067 |
|
169,517 |
|
Other current assets |
|
239,050 |
|
150,633 |
|
53,802 |
|
Total current assets |
|
3,576,635 |
|
3,839,108 |
|
4,889,163 |
|
Property, plant and equipment, net |
|
3,641,024 |
|
3,237,803 |
|
2,605,195 |
|
Prepaid land use right |
|
150,358 |
|
147,774 |
|
80,330 |
|
Other non-current assets |
|
73,507 |
|
70,956 |
|
19,408 |
|
TOTAL ASSETS |
|
7,441,524 |
|
7,295,641 |
|
7,594,096 |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable and notes payable |
|
93,161 |
|
100,466 |
|
102,562 |
|
Advances from customers-short term portion |
|
148,984 |
|
252,262 |
|
121,992 |
|
Payables for purchases of property, plant and |
|
435,344 |
|
292,488 |
|
230,440 |
|
Other current liabilities |
|
173,598 |
|
165,102 |
|
281,548 |
|
Total current liabilities |
|
851,087 |
|
810,318 |
|
736,542 |
|
Advance from customers – long term portion |
|
113,857 |
|
104,206 |
|
153,176 |
|
Other non-current liabilities |
|
36,681 |
|
33,526 |
|
99,772 |
|
TOTAL LIABILITIES |
|
1,001,625 |
|
948,050 |
|
989,490 |
|
EQUITY: |
|
|
|
|
|
|
|
|
|
4,753,522 |
|
4,733,218 |
|
4,807,376 |
|
Non-controlling interest |
|
1,686,377 |
|
1,614,373 |
|
1,797,230 |
|
Total equity |
|
6,439,899 |
|
6,347,591 |
|
6,604,606 |
|
TOTAL LIABILITIES & EQUITY |
|
7,441,524 |
|
7,295,641 |
|
7,594,096 |
|
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Unaudited Condensed Consolidated Statements of Cash Flows |
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(US dollars in thousands) |
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For the year ended |
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2023 |
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2022 |
|
Operating Activities: |
|
|
|
|
|
Net income |
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by |
|
301,615 |
|
431,965 |
|
Changes in operating assets and liabilities |
|
664,753 |
|
(448,955) |
|
Net cash provided by operating activities |
|
1,610,868 |
|
2,462,652 |
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
Net cash used in investing activities |
|
(1,190,781) |
|
(998,416) |
|
|
|
|
|
|
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Financing activities: |
|
|
|
|
|
Net cash (used in)/provided by financing activities |
|
(795,399) |
|
1,472,091 |
|
|
|
|
|
|
|
Effect of exchange rate changes |
|
(97,083) |
|
(139,942) |
|
Net (decrease)/increase in cash, cash equivalents and restricted cash |
|
(472,395) |
|
2,796,385 |
|
Cash, cash equivalents and restricted cash at the beginning of the |
|
3,520,351 |
|
723,966 |
|
Cash, cash equivalents and restricted cash at the end of the period |
|
3,047,956 |
|
3,520,351 |
|
|
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Reconciliation of non-GAAP financial measures to comparable US GAAP measures |
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(US dollars in thousands) |
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Three months ended |
Year
ended |
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|
|
|
|
|
|
|
2023 |
|
2022 |
Net income |
69,783 |
17,843 |
486,293 |
644,500 |
2,479,642 |
|||||
Income tax expense |
|
26,737 |
|
21,438 |
|
148,675 |
|
173,973 |
|
577,247 |
Interest income, net |
|
(13,772) |
|
(13,832) |
|
(12,030) |
|
(52,301) |
|
(14,473) |
Depreciation & Amortization |
|
45,455 |
|
44,765 |
|
25,585 |
|
152,454 |
|
108,317 |
EBITDA (non-GAAP) |
|
128,203 |
|
70,214 |
|
648,523 |
|
918,626 |
|
3,150,733 |
EBITDA margin (non-GAAP) |
|
26.9 % |
|
14.5 % |
|
75.0 % |
|
39.8 % |
|
68.4 % |
|
|
|
|
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Three months ended |
Year
ended |
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|
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|
|
2023 |
|
2022 |
Net income/(loss) attributable to |
|
44,946 |
|
(6,312) |
332,734 |
421,158 |
1,819,801 |
|||
Share-based compensation |
|
21,008 |
|
50,287 |
|
30,376 |
|
133,520 |
|
302,495 |
Adjusted net income (non-GAAP) |
65,954 |
43,975 |
363,110 |
554,678 |
2,122,296 |
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Adjusted earnings per basic ADS (non- |
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Adjusted earnings per diluted ADS |
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