Daqo New Energy's Q3 loss widens as polysilicon prices drop further

Solar modules. Author: Oregon Department of Transportation. License: Creative Commons, Attribution 2.0 Generic.

Chinese solar-grade polysilicon producer Daqo New Energy Corp (NYSE:DQ) saw its third-quarter attributable net loss expand to USD 60.7 million (EUR 55.8m) from USD 6.3 million a year back, hit by the lower polysilicon prices and sales volume.

"Entering the third quarter, China solar industry's market conditions remained challenging, exacerbated by the overall over-supply in the industry,” the company’s CEO Xiang Xu said on Wednesday and explained that polysilicon selling prices continued to be below production costs. “Although this caused Daqo New Energy to sustain quarterly operating and net losses, our losses narrowed compared to the second quarter and we continued to maintain a strong and healthy balance sheet with no financial debt,” he added.

The Chinese firm booked USD 198.5 million in revenues in June-September, down from USD 219.9 million in the second quarter USD 484.8 million in the year-ago period due to the drop in the average selling price (ASP) of polysilicon and decreased sales volumes.

Daqo New Energy produced 43,592 tonnes of polysilicon in the third quarter, against 64,961 in the previous trimester. Polysilicon sales volume, meanwhile, was 42,101 tonnes, down from 43,082 tonnes in the second quarter.

Amounts in USD million	Q3 2024	Q3 2023
Revenues	198.5	484.8
Gross profit (loss)	(60.6)	67.8
Gross profit margin	(30.5%)	14%
Income (loss) from operations	(98)	22.5
Net income (loss) attributable to Daqo New Energy shareholders	(60.7)	(6.3)
Adjusted net income (loss) attributable to Daqo New Energy shareholders	(39.4)	44
EBITDA (loss)	(34.3)	70.2

Daqo New Energy had a total annual polysilicon nameplate capacity of 305,000 tonnes at the end of September.

In the fourth quarter, the Chinese manufacturer expects its polysilicon production to decrease further, coming at between 31,000 tonnes and 34,000 tonnes. The output for 2024 is seen to be within the 200,000 tonne-210,000 tonne range, which will include the impact of the annual facility maintenance launched in the third quarter.

(USD 1.0 = EUR 0.919)

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