Daqo positive of EU-China agreement

Not all the sentiment coming out of China since the EU’s imposition of anti dumping duties on its panels last week has been negative.

In announcing his company’s unaudited first quarter results, Daqo New Energy CEO Dr Gongda Yao said: "We believe today’s challenging situation is only temporary. We are confident that the political leaders of China and the European Union have the competence to manage the international trading conflict in the solar PV industry, so as to enable the industry to achieve a healthy and sustainable growth in the future."

In fact Daqo’s figures were accompanied by positive thinking all round with Dr Yao adding: "We have seen average selling prices stabilizing across the solar PV value chain. The current improved financial performances of downstream entities indicates the start of stabilization in the market."

With a balance sheet that at the end of March showed US$11.7 million in cash against total borrowings of $301.5 million – of which only $178.7 million was long term – the polysilicon producer could be forgiven for thinking the upturn in the industry cannot come quickly enough.

It should be noted, though, that those borrowing figures had improved slightly against the $307.8 million in the red column at the end of 2012.

There was an optimistic outlook for the April-June figures too with Daqo predicting poly shipments will rise from 706 MT in Q1 to 920 MT in the current quarter and wafer shipments will rise from 2.21 million pieces to 6.5 million.

The bottom line was another quarterly loss but at least a healthier deficit with the operating loss being cut from $55.9 million to $16.6 million quarter on quarter on the back of a revenue rise from $6.2 million to $14.5 million over the same period.

Despite the positive outlook, the effects of the global oversupply in polysilicon were again reflected in the figures with Daqo’s idle Wanzhou production facility booking a loss of $10.4 million in Q4, 2012 and a further $9.7 million from January to March.