Daqo New Energy Corp · NYSE:DQ
Daqo New Energy — Q4 2016 Earnings Presentation
21 slides from Daqo New Energy's earnings presentation, Mar 7, 2017
Slide 1: Unaudited Q4 and Fiscal Year 2016 Financial Results Presentation
Daqo New Energy Corp. Unaudited Q4 and Fiscal Year 2016 Financial Results Presentation March 7, 2017
Slide 2: Safe Harbor Statement
Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “antici
Slide 3: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 3
Slide 4: Business update and Q4 2016 highlights
Business update and Q4 2016 highlights Polysilicon Cost Structure (1) -- total production cost (including depreciation) of $9.98/kg in Q4 2016, compared to $8.66/kg in Q3 2016. Q4’s cost structure was affected by annual maintenance -- cash cost (excluding depreciation) of $7.34/kg in Q4 2016, comp
Slide 5: Phase 3A Polysilicon Facilities
Phase 3A Polysilicon Facilities Fully ramp up to 18,000 MT at the end of Feb. 2017 PRIVATE & CONFIDENTIAL P. 5
Slide 6: Management commentary
Management commentary "The fourth quarter of 2016 was an important milestone for Daqo New Energy. During the quarter, we successfully completed our annual maintenance work and interconnections between our new facilities and existing facilities in Xinjiang at the same time. We also successfully compl
Slide 7: Daqo's quarterly polysilicon Average Selling Prices
Daqo’s quarterly polysilicon Average Selling Prices Quarterly Polysilicon ASPs($/kg) $21.63 $22.04 $21.50 $20.47 $18.67 $17.98 $18.09 $17.24 $16.71 $15.95 $15.64 $14.98 $14.96 $13.86 $13.72 Q2 2013 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 PRIVATE & CONFIDENTIAL P. 7
Slide 8: Xinjiang polysilicon facilities update
Xinjiang polysilicon facilities update Q4 2016 key facts Outlook Successfully complete annual maintenance Fully ramp up the capacity to 18,000 MT at the end Production volume of 2,456 MT Feb. 2017 External sales volume of 2,209 MT Expected sales volume in Q1 2017: Average total productio
Slide 9: Polysilicon manufacturing overview
Polysilicon manufacturing overview Production Volume (MT) 3,547 3,570 3,636 3,405 2,689 2,456 1,748 1,791 1,801 1,734 1,445 1,517 1,504 1,311 962 Q2 2013 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Cash cost and Depreciation ($/kg)* Cash cost Depreciation 17.64 15.98 15.75 14.49 14.13 5
Slide 10: Chongqing wafer facilities update
Chongqing wafer facilities update Q4 2016 key facts Q1 2017 sales volume outlook 21.3 million pieces sold to customers Q1 2017 wafer sales volume: 23.5 ~24.0 million pieces PRIVATE & CONFIDENTIAL P. 10
Slide 11: Sales volume in Q4 2016 and outlook for Q1 2017
Sales volume in Q4 2016 and outlook for Q1 2017 Q1 2017E Sales Volume Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 guidance Polysilicon 3,800~ 3,092 2,905 2,931 2,838 2,209 (MT) 4,000 Wafer 21.0 22.1 25.0 14.0 21.3 23.5~24.0 (million pieces) PRIVATE & CONFIDENTIAL P. 11
Slide 12: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 12
Slide 13: Q4 2016 financial highlights
Q4 2016 financial highlights Revenue of $46.1 million in Q4 2016, compared to $54.3 million in Q3 2016 Gross profit of $14.2 million in Q4 2016, compared to $20.1 million in Q3 2016; Non-GAAP gross margin (1) of 34.1% in Q4 2016, compared to 39.9% in Q3 2016; Income from operations of $9.6 m
Slide 14: P&L Summary (Q4 2016 vs. Q3 2016)
P&L Summary (Q4 2016 vs. Q3 2016) US$ in millions Q4 2016 Q3 2016 Change Analysis Polysilicon: Ext. sales volume ↓ , ASP↓ Revenues 46.1 54.3 (8.2) Wafer: Sales volume↑, ASP↓ Polysilicon: Ext. sales volume ↓ Unit cost↑ Cost of revenues (31.9) (34.2) 2.2 Wafer: Sales volume↑ Unit cost↓ Gross profit 14
Slide 15: Balance sheet summary
Balance sheet summary Change (Q4 2016 vs. US$ in millions 12/31/2016 9/30/2016 Q3 2016) 12/31/2015 Cash and restricted Cash 31.9 29.2 2.7 33.6 Accounts receivable 4.8 4.6 0.2 19.9 Note receivables 13.0 17.0 (4.0) 11.1 Inventories 12.3 14.9 (2.6) 10.7 Prepaid land use rights 24.8 26.0 (1.2) 27.9 Net
Slide 16: Cash flow summary
Cash flow summary 12 months ended 12 months ended US$ in millions Dec. 31, 2016 Dec. 31, 2015 Net cash provided by operating activities 98.7 66.4 Net cash (used in) investing activities (66.1) (74.1) Net cash (used in) provided by financing activities (30.3) 15.2 Effect of exchange rate changes (0.8
Slide 17: Full Year 2016 financial and operating highlights
Full Year 2016 financial and operating highlights Polysilicon production volume of 13,068 MT in 2016, an increase of 33.7% from 9,771 MT in 2015 Polysilicon external sales volume of 10,883 MT in 2016, an increase of 32.2% from 8,234 MT in 2015 Solar wafer sales volume of 82.8 million pieces in
Slide 18: P&L Summary (FY2016 vs. FY2015)
P&L Summary (FY2016 vs. FY2015) US$ in millions 2016 2015 Change Analysis Poly : Sales↑, ASP↑ Revenues 229.1 182.0 47.1 Wafer: Sales↑, ASP↓ Poly : Production↑, Unit cost↓ Cost of Revenues (148.7) (144.5) (4.2) Wafer: Production↑, Unit cost↓ Gross profit 80.4 37.6 42.8 Poly : Sales↑;Unit Cost ↓;ASP↑
Slide 19: Non-GAAP reconciliation
Non-GAAP reconciliation US$ in millions Q4 2016 Q3 2016 Q4 2015 FY 2016 FY 2015 Net income 4.2 11.3 9.7 43.9 13.0 Income tax expenses 1.3 2.2 0.5 7.4 1.1 Interest expense 4.1 3.1 4.3 14.6 13.2 Interest income (0.01) (0.1) (0.3) (0.4) (0.5) Depreciation 8.1 8.5 9.1 33.8 31.4 EBITDA (1) 17.6 25.0 23.4
Slide 20: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures To supplement Daqo’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), the Company uses certain non-GAAP financial measures that are adjusted for certain items from the most directly comp
Slide 21: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 21