Daqo New Energy Corp · NYSE:DQ
Daqo New Energy — Q1 2016 Earnings Presentation
20 slides from Daqo New Energy's earnings presentation, May 10, 2016
Slide 1: Unaudited Q1 2016 Financial Results Presentation
Daqo New Energy Corp. Unaudited Q1 2016 Financial Results Presentation May 10, 2016
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 Q1 2016 highlights
Business update and Q1 2016 highlights Polysilicon Cost Structure -- total production cost (including depreciation) of $9.65/kg in Q1 2016, compared to $9.74/kg in Q4 2015 -- cash cost (excluding depreciation) of $7.62/kg in Q1 2016, compared to $7.69/kg in Q4 2015 Polysilicon production volume
Slide 5: Phase 2B Existing and Phase 3A Polysilicon Facilities
Phase 2B Existing Polysilicon Facilities Phase 3A Polysilicon Facilities Under Construction PRIVATE & CONFIDENTIAL P. 5
Slide 6: Market update
Market update •Since February 2016, polysilicon ASPs have improved meaningfully due to strong downstream demand. We saw significant additions of new wafer capacities in the market, which have increased polysilicon consumption and created an environment of relatively tight polysilicon supply. During
Slide 7: Daqo's quarterly polysilicon Average Selling Prices
Daqo’s quarterly polysilicon Average Selling Prices Quarterly Polysilicon ASPs($/kg) $22.04 $21.63 $21.50 $20.47 $18.67 $17.98 $18.09 $16.71 $16.73 $15.95 $14.98 $13.86 $13.72 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 PRIVATE & CONFIDENTIAL P. 7
Slide 8: Xinjiang polysilicon facilities update
Xinjiang polysilicon facilities update Q1 2016 key facts Outlook Production volume of 3,405 MT Expected sales volume in Q2 2016: External sales volume of 2,905 MT 2,850 ~ 2,950 MT Average total production cost : $9.65/kg Cost targets: (on average) Average cash cost: $7.62/kg -- Total pro
Slide 9: Polysilicon manufacturing overview
Polysilicon manufacturing overview Production Volume (MT) 3,547 3,405 2,689 1,748 1,791 1,801 1,734 1,445 1,517 1,504 1,311 1,088 962 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Cash cost and Depreciation ($/kg)* Cash cost Depreciation 20.59 17.64 4.76 15.98 15.75 14.53 14.13 5.43 13.
Slide 10: Chongqing wafer facilities update
Chongqing wafer facilities update Q1 2016 key facts Q2 2016 sales volume outlook Annual capacity of approximately Q2 2016 wafer sales volume: 90 million pieces (388 MW) 23.5 ~24.0 million pieces 22.1 million pieces sold to customers Technology enhancement project: Reduce manufacturing cost
Slide 11: Sales volume in Q1 2016 and outlook for Q2 2016
Sales volume in Q1 2016 and outlook for Q2 2016 Q2 2016E Sales Volume Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 guidance Polysilicon 2,850~ 1,502 1,363 2,277 3,092 2,905 (MT) 2,950 Wafer 18.1 18.3 19.1 21.0 22.1 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: Q1 2016 financial highlights
Q1 2016 financial highlights Revenue of $57.7 million in Q1 2016, compared to $59.3 million in Q4 2015; Gross profit of $16.7 million in Q1 2016, compared to $16.9 million in Q4 2015; Non-GAAP gross margin (1) of 32.6% in Q1 2016, up from 31.9% in Q4 2015; Income from operations of $13.3 mil
Slide 14: P&L Summary (Q1 2016 vs. Q4 2015)
P&L Summary (Q1 2016 vs. Q4 2015) US$ in millions Q1 2016 Q4 2015 Change Analysis Polysilicon: Ext. sales volume ↓, ASPs ↓ Revenues 57.7 59.3 （1.6） Wafer: Sales volume ↑ Polysilicon: Ext. sales volume ↓, Cost ↓ Cost of revenues (40.9) (42.4) 1.5 Wafer: Sales volume ↑ Gross profit 16.7 16.9 (0.2) Gro
Slide 15: Balance sheet summary
Balance sheet summary Change (Q1 2016 vs. US$ in millions 3/31/2016 12/31/2015 Q4 2015) 3/31/2015 Cash and restricted Cash 35.7 33.6 2.1 32.2 Accounts receivable 15.4 19.9 (4.5) 8.8 Notes receivable 25.3 11.1 14.2 48.4 Inventories 10.9 10.7 0.2 9.4 Prepaid land use rights 27.2 27.1 0.1 28.9 Net PP&E
Slide 16: Cash flow summary
Cash flow summary 3 months ended 3 months ended US$ in millions Mar 31, 2016 Mar 31, 2015 Net cash provided by operating activities 22.5 1.3 Net cash (used in) investing activities (17.5) (16.3) Net cash provided by financing activities (3.3) 22.7 Effect of exchange rate changes 0.096 0.005 Net incr
Slide 17: Non-GAAP reconciliation – EBITDA and gross margin
Non-GAAP reconciliation – EBITDA and gross margin US$ in millions Q1 2016 Q4 2015 Change Net income 8.4 9.6 (1.5) Depreciation 8.6 9.1 (0.5) EBITDA (1) 21.9 23.4 (1.5) EBITDA margin (1) 38.0% 39.5% (1.5%) Costs related to Chongqing poly 2.0 2.0 - facilities Non-GAAP gross profit (2) 18.8 18.9 (0.1)
Slide 18: Non-GAAP reconciliation – Adjusted Net Income and EPS
Non-GAAP reconciliation – Adjusted Net Income and EPS US$ in millions Q1 2016 Q4 2015 Change Net income 8.4 9.6 (1.2) Costs related to Chongqing poly 2.0 2.0 - facilities Share-based compensation 1.3 0.3 1.0 Adjusted Net income* 11.7 11.9 (0.2) (non-GAAP) Adjusted Earnings per basic $1.12 $1.14 ($0.
Slide 19: 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 20: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 20