China's Daqo back in the black

China’s Daqo New Energy bounced back to profitability in the three months to 31 March, posting a net profit of $2.6m as polysilicon shipments rose 9.4% on the quarter to 1,391 MT.

Wanzhou-based Daqo had not recorded a net profit since the third quarter of 2011. It posted an $18.7m loss in the first three months of 2013.

The NYSE-listed polysilicon and wafer producer also announced plans this week to launch a public offering of 2,000,000 American Depositary Shares (ADSs). It will use the funds to expand and upgrade its polysilicon plant in western China’s Xinjiang region.

Revenue from polysilicon rose from $24.2m in the last three months of 2013 to $30.1m in the first quarter. Higher average selling prices and a spike in sales volumes helped to offset a $3.7m loss it booked on a non-operational polysilicon plant in Chongqing.

Operating income reached $6.6m. Wafer sales hit $12m, from $12.8m in the fourth quarter.

Daqo’s nameplate polysilicon production capacity reached 6,150 MT, following a de-bottlenecking push in December.

The company expects to ship 1,375 MT to 1,400 MT of polysilicon and 16.6 million to 17 million wafers in the second quarter. It anticipates the average selling price of polysilicon to reach $20/kg to $25/kg this year.T.

Chief executive Gongda Yao vowed to increase the company’s annual polysilicon production capacity to 12,150 MT by the end of this year. 

The company is cutting costs by shifting production to Shihezi, near the Xinjiang capital of Ürümqi. Longer term, it may expand annual production capacity at the Xinjiang plant to 25,000 MT.