Q2 2024 Daqo New Energy Corp Earnings Call Transcript
Key Points
- Daqo New Energy Corp (DQ) maintained a strong balance sheet with $997 million in cash and a combined cash and bank note receivable balance of $1.1 billion.
- The company started initial production at its 100,000 metric tons Phase 5B polysilicon project in Inner Mongolia, contributing approximately 12% of total production volume.
- Total production volume for the quarter was 64,961 metric tons, exceeding expectations and representing an increase of 2,683 metric tons compared to the previous quarter.
- The overall N-type product mix reached 73% during the quarter, with Phase 5B achieving 70% N-type, indicating strong progress towards achieving 100% N-type by the end of next year.
- Production costs trended down further in the second quarter, decreasing by 3% from Q1 2024 to an average of $6.19 per kilogram.
- The solar industry experienced significant challenges during the second quarter, with market prices falling below production costs, leading to a non-cash inventory impairment expense of $108 million.
- Revenues decreased to $220 million, compared to $415.3 million in the first quarter of 2024 and $637 million in the second quarter of 2023.
- Gross loss was $159 million, compared to a gross profit of $72 million in the first quarter of 2024 and $259 million in the second quarter of 2023, resulting in a negative gross margin of 72%.
- Net loss attributable to Daqo New Energy shareholders was $120 million, compared to net income of $15.5 million in the first quarter of 2024 and $103.7 million in the second quarter of 2023.
- The company adjusted its target production utilization rate for the third quarter and full year, expecting Q3 production volume to be approximately 43,000 to 46,000 metric tons, down from previous levels.
Hello, and welcome to the Daqo New Energy second quarter 2024 results conference call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Anita Chu, Investor Relations, Director. Please go ahead.
Hello, everyone. I'm Anita Chu, the Investor Relations of Daqo New Energy. Thank you for joining our conference call today.
Daqo New Energy just issued its financial results for the second quarter of 2024, which can be found on our website at www.dqsolar.com.
So today attending the conference call, we have our chairman and CEO, Mr. Xiang Xu; our CFO, Mr. Ming Yang, and myself. The call today will begin with an update from Mr. Xu on market conditions and company operations, and then, Mr. Yang will discuss the company's financial performance for the quarter and the year. After that, we'll open the floor to Q&A from the audience.
Before we begin the
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