Daqo New Energy Q4 Loss Narrows - Quick Facts

(RTTNews) - Daqo New Energy Corp. (DQ) said its fourth quarter of 2013 net loss attributable to shareholders narrowed to $8.0 million from $75.6 million in the fourth quarter of 2012. Loss per ADS was $1.16, compared to a loss $10.76 in the prior year quarter.

Revenues for the quarter were $37.0 million, up from $6.2 million last year.

Quarterly Polysilicon shipments were about 1,271 metric tons (MT) and wafer shipments were 16.7 million pieces, respectively.

For the first quarter of 2014, the Company expects to ship 1,350 MT to 1,400 MT of polysilicon. The company also expects to ship approximately 16.6 million to 17.0 million pieces of wafer.

The company said it will commence ground preparing construction on a new expansion at the Xinjiang facility in April of 2014, which will add 6,000 MT and take nameplate polysilicon capacity to 12,150 MT once completed. The Company will utilize some of the existing equipments which are being relocated from the Chongqing line where production is no longer taking place, and as a result the capital expenditure required will be less than that of an equivalent completely new build. Daqo New Energy ceased a technology improvement project at the Chongqing polysilicon line in the second quarter of 2013 ahead of the relocation of the machinery and equipment to Xinjiang.

The company has already completed an optimized feasibility study and received all permits and approvals required for the ground preparing construction. The upcoming scheduled annual maintenance work in April 2014 will include readying the existing plant for the expansion project and upgrading off-gas treatment process from traditional hydrogenation technology to hydrochlorination technology. Construction work on the expansion is expected to be completed by the end of 2014 with full ramp up of capacity by the second quarter of 2015.

The company believes the transition to Xinjiang has transformed it into a low-cost leader and positions the Company to compete with the leading polysilicon manufacturers in China and globally. As of the fourth quarter 2013, the Company achieved a total production cost, including depreciation, of $15.8 per kilogram, and cash cost, excluding depreciation, of $12.0 per kilogram.

The company expects to further lower total production cost to $12 per kilogram when capacity at the Xinjiang expansion is fully ramped up by the second quarter of 2015.