Daqo Q4 2023 Earnings Fall Amid Crashing Polysilicon Prices

The company’s Q4 revenue and net income fell by 45% and 82%, respectively

February 29, 2024


China-based polysilicon manufacturer Daqo New Energy Corporation reported lower revenue and net income in the fourth quarter (Q4) of 2023, as polysilicon prices continued to decline due to market oversupply.

Daqo’s Q4 revenue was $477.1 million, down 45% from $864.3 million last year. Quarterly adjusted net income also fell 82% to $66 million from $363 million in the same period last year.

The steep declines were due to lower polysilicon average selling prices (ASP), which dropped to $7.97/kg in Q4 from $32.54/kg in 2022.

The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) in Q4 2023 stood at $128.2 million, a fall of 80% from $649 million last year.

The company’s polysilicon shipments, however, rose to 59,906 MT in Q4, up 156% from 23,400 MT last year, partially offsetting the ASP decline. Gross margin also improved sequentially to 18.3% from 14% last quarter due to lower production costs and a slight rebound in ASP.

Daqo struck an optimistic tone for 2024, citing signs of polysilicon market stabilization after prices plunged earlier last year. The company expects strong demand growth for solar installations globally to continue driving polysilicon demand.

“Going to the first quarter of 2024, we expect poly prices to rebound slightly in the first quarter, seasonally affected by the Chinese New Year, and then stabilize in the second quarter,” said CEO Xiang Xu during a post-earnings conference call with analysts.

Full Year 2023

For the full-year 2023, Daqo’s revenue declined 50% to $2.3 billion from $4.6 billion in 2022, while adjusted net income came in at $554 million, down 77% from $2.1 billion in 2022.

The declines were again due to lower ASPs, which averaged $11.48/kg in the year. The higher sales volume partially offset the decline. The company sold 200,002 MT of polysilicon in 2023, 50% higher than 132,909 MT in 2022.

EBITDA for the year was down 71% to $918.6 million from $3.2 billion in the previous year.

“Despite robust demand growth for solar PV products globally in 2023, the high poly prices driven by capacity mismatches between upstream and downstream players and the resulting supply shortages that we have seen in 2022 were alleviated by early 2023. As a result, poly-ASPs declined significantly for the year,” said Xu.

Falling polysilicon prices have weighed on Daqo’s earnings for the entirety of 2023. The company’s net income for the first quarter, second quarter, and third quarter fell by 48%, 93% and 84%, respectively.