Daqo New Energy CEO Longgen Zhang has announced another impressive set of quarterly results for the Chinese polysilicon producer but also noted a recent shortage of glass for solar panels.
Echoing comments made by Canadian Solar chief Shawn Qu, Zhang noted: “In recent weeks, because of strong solar module and installation demand, we began to see solar glass capacity shortage becoming a bottleneck for the solar industry and limiting module production.” Like his counterpart at Canadian, the Daqo chief executive predicted the situation would ease in “coming months” as more solar glass production capacity comes online.
There was little else to be gloomy about for Daqo investors in a sprightly third-quarter earnings update. Revenue may have dipped, quarter-on-quarter, from $134 million to $126 million, sales volumes may have slipped from 18,881 metric tons (MT) to 13,643 and average production costs may have risen three U.S. cents to $5.82/kg, but the bottom line looks solid for the manufacturer.
Polysilicon output rose from 18,097 MT in the second quarter to 18,406 MT and Zhang said the completion of a “digital transformation” of the business – plus rising demand – has prompted an expectation of producing 19,500-20,500 MT during the current reporting period.
Net income for July-to-September rocketed from $2.4 million in Q2 to $20.8 million on the back of gross profits which leaped from $22.7 million to $45.3 million during the same period.
A big rise in average selling price – from $7.04/kg in April-to-June to $9.13/kg in the last quarter – made a big contribution to those numbers and the Daqo boss predicted prices would “improve meaningfully” again in the current window.
Even the ostensibly disappointing rise in production costs was explained away in currency exchange terms, with Zhang hailing a, third-quarter “record-low cost, in renminbi terms.”
The chief executive said the business expects to sell 20,500-21,500 MT of polysilicon in the current reporting period for a full-year figure of 75,800-76,800.
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