Daqo New Energy Corp · NYSE:DQ
Daqo New Energy — Q4 2014 Earnings Presentation
20 slides from Daqo New Energy's earnings presentation, Apr 10, 2015
Slide 1: Q4 and Fiscal Year 2014 Financial Results Presentation
Daqo New Energy Corp. Q4 and Fiscal Year 2014 Financial Results Presentation April p 10,, 2015
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 us ess Highlights g g ts and a d Summary Su ay Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 3
Slide 4: Business update and Q4 2014 highlights
Business update and Q4 2014 highlights Record-high R d hi h polysilicon l ili production d ti volume l off 1 791 MT in 1,791 i Q4 2014 2014, up ffrom 1 1,748 748 MT in Q3 2014 Cost Structure – total production cost (including depreciation) of $13.23/kg and cash cost $10 88/k in off $10.88/kg i Q
Slide 5: Market update
Market update Polysilicon P l ili ASP under d pressure in i Q4 2014 due d tot increased i d import i t from f foreign f i polysilicon l ili makers. As the existing processing trade agreements of some major foreign polysilicon makers will gradually become expired starting from Q2 2015, we don’t exp
Slide 6: Market price trend (PV Insights)
Market price trend (PV Insights) Polysilicon sport market price ($/kg) Wafer ASP ($ / piece) $0.94 $21.37 $21.61 $20.83 $20.35 $17.87 $0.90 $17.45 $16.78 $16.94 $0.88 $0.85 $0.85 $0.84 $0.84 $0.82 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 PRIVATE
Slide 7: Xinjiang polysilicon facilities update
Xinjiang polysilicon facilities update Q4 2014 key facts Outlook 1,791 MT production Expected shipment in Q1 2015: 1,500 MT 1,537 MT shipment to customers Capacity increase from 6,000 MT to 12,150 MT Solar Grade I: 100% in Q4 2014 ‒ Fully ramp up by the end of Q2 2015 Q4 2014 production
Slide 8: Polysilicon manufacturing overview
Polysilicon manufacturing overview Production Volume (MT) Production cost, SG&A, interest ($/kg)** 1,791 1,748 1,517 1,504 $23.47 1 504* 1,445 2.88 $20.76 1,311 1,211 $18.81 3.12 $18.30 1,143 46 4.76 $16.94 $16.47 1,088 2.83 83 2 55 2.55 1 041 1,041 $15.23 $15.25 962 2.45 2.34 5.43 4.16 3.77 2.18 2.
Slide 9: Consistent first class quality -- 100% Solar Grade 1
Consistent first class quality -- 100% Solar Grade 1 Daqo New Energy polysilicon quarterly quality data (1) 99 3% 99.3% 99 5% 99.5% 100 0% 100.0% 100% 100% 92.5% 100% 88.3% 94.7% 95.8% 95.0% 90.7% 84.3% 85.3% 77.4% 67.5% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Electronic grad
Slide 10: Wanzhou wafer facilities update
Wanzhou wafer facilities update Q4 2014 key facts Outlook 17.8 17 8 million illi pieces i shipped hi d tto customers t Q1 2015 wafer f shipment hi t expected t d tto be b 17.5 –18.0 million pieces PRIVATE & CONFIDENTIAL P. 10
Slide 11: Historical shipments and Q1 2015 outlook
Historical shipments and Q1 2015 outlook Q1 2015E Shipments Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 guidance Polysilicon (MT) 1,271 1,391 1,436 1,598 1,537 1,500 Wafer 16.7 16.8 17.6 18.5 17.8 17.5-18.0 (million pieces) Ingot & block (MT) - 1.5 5.0 - - PRIVATE & CONFIDENTIAL P. 11
Slide 12: Agenda
Agenda Business Highlights and Summary Financial Results and Update p (Mr. Bing Sun, CFO) Q&A PRIVATE & CONFIDENTIAL P. 12
Slide 13: Q4 2014 financial highlights
Q4 2014 financial highlights Revenues were $49.5 million, an increase of 4.6% compared with $47.3 million in Q3 2014 Polysilicon production cost of $13.23/kg in Q4 2014, compared to $13.05/kg in Q3 2014; cash cost of $10.88/kg in Q4 2014, compared to $10.72/kg in Q3 2014 Gross profit was $12.6
Slide 14: P&L summary (Q4 2014 vs. Q3 2014)
P&L summary (Q4 2014 vs. Q3 2014) US$ in millions Q4 2014 Q3 2014 Change Analysis Polysilicon: Sales ↑, ASP↓ Revenues 49.5 47.3 2.2 Wafer: Sales ↑,ASP flat C t off revenues Cost (36 9) (36.9) (35 7) (35.7) (1 2) (1.2) Gross profit (loss) 12.6 11.6 1.0 Gross margin 25.4% 24.5% 0.9% Non-GAAP Gross mar
Slide 15: Non-GAAP reconciliation – EBITDA and gross margin
Non-GAAP reconciliation – EBITDA and gross margin US$ in millions Q4 2014 Q3 2014 Change Net income (loss) 3.6 5.9 (2.3) I Income tax t expenses - - - Interest Expense 4.0 3.6 0.4 Interest income (0 03) (0.03) (0 16) (0.16) 0 13 0.13 Depreciation 7.1 7.0 0.1 EBITDA (1) 14 7 14.7 16 4 16.4 (1 7) (1.7
Slide 16: Polysilicon Inventory
Polysilicon Inventory Inventory (MT) Q4 2014 Beginning of the period 47 Production during the period 1,791 External shipments (1,537) Internal shipments ( (279) ) (to internal wafer sector) End of the period 22 Currently our average daily polysilicon output is around 18 to 20 MT. PRIVATE & CONFIDENT
Slide 17: P&L Summary (FY2014 vs FY2013)
P&L Summary (FY2014 vs FY2013) US$ in millions 2014 2013 Change Analysis Poly : Sales↑, ASP↑ Revenues 182.6 109.0 73.6 Wafer: Sales↑, ASP↑ Cost of Revenues 139.3 135.1 4.2 Poly : ASP↑, Cost ↓; Gross profit (loss) 43.3 (26.1) 69.4 Wafer: ASP↑, Cost ↓; Gross margin 23.7% (23.9%) 47.6% SG&A + R&D expen
Slide 18: Balance sheet summary
Balance sheet summary Change US$ in millions 12/31/2014 6/30/2014 (Q4 2014 vs Q3 2014) 12/31/2013 Cash and restricted Cash 29.2 30.0 (0.8) 16.7 Accounts receivable 8.7 6.8 1.9 9.9 Notes receivable 50.2 36.8 13.4 15.9 I Inventories t i 96 9.6 11 3 11.3 (1 7) (1.7) 10 5 10.5 Prepaid land use rights 29
Slide 19: Cash flow summary
Cash flow summary 12 months ended 9 months ended 12 months ended US$ in millions Dec. 31, 2014 Sep. 30, 2014 Dec. 31, 2013 Net cash provided by operating activities 45.6 47.7 (16.5) Net cash used in investing activities (90.6) (81.0) (30.7) Net cash provided by financing activities 44.3 38.1 48.8 Ef
Slide 20: Agenda
Agenda Business us ess Highlights g g ts and a d Summary Su ay Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 20