Chinese photovoltaic-grade polysilicon manufacturer Daqo New Energy Corporation posted revenue of $1.24 billion in the second quarter (Q2), a year-over-year (YoY) rise of 182% from $441.4 million in Q2 2021.

Daqo’s Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) amounted to $955.4 million in Q2, a YoY leap of 207% from $311.7 million in the same period last year. The EBITDA margin for the period was 76.8%, compared to 64.6% in Q1 and 70.6% in the same period last year.

The net income attributable to the company’s shareholders was $627.8 million, a YoY spike of 170% from $232.1 million. Daqo’s earnings per basic American Depository Share stood at $8.36, a YoY rise of 165% from $3.15.

The company’s polysilicon production volume totaled 35,326 MT, a quarter-over-quarter (QoQ) surge of 13% from 31,383 MT produced in the previous quarter. However, Daqo’s polysilicon sales volume dropped QoQ by 3.33% to 37,545 MT compared to 38,839 MT in the previous quarter.

The polysilicon average selling price (ASP) was $33.08/kg in Q2, compared to $32.76/kg in Q1.

Longgen Zhang, CEO of Daqo New Energy, commented, “Our sequential improvements in gross profit and gross margin were primarily driven by a 28% reduction in our polysilicon production cost. With higher manufacturing efficiency and better economy of scale, we reduced our per unit electricity cost and depreciation cost by 7% and 13% in RMB terms quarter-over-quarter, respectively. In addition, our metallurgical–grade silicon cost in the second quarter was reduced by 37% as compared to the first quarter.”

The total income of Daqo New Energy from operations stood at $927.6 million, a YoY increase of 217% from $292.4 million in last year’s same quarter. The company posted an operating margin of 74.6% for the quarter compared to 62.2% in Q1 and 66.3% in the same period last year.

Daqo’s gross profit for Q2 was $946.9 million, a YoY leap of 212% from $303.2 million last year, while the gross margin was 76.1% compared to 63.5% in the previous quarter and 68.7% in Q2 2021. The company attributed lower production costs and higher ASPs to the gross profit and margin surge.

Net cash accumulated by Daqo New Energy from operating activities for the first six months (1H) ending June 30 totaled $1.12 billion, a YoY increase of 155% from $442.3 million.

Daqo used $80.3 million in investing activities during 1H, down YoY by 69% from $255.4 million last year. The company said that the use of the cash in 1H of this financial year was primarily due to capital expenditures on the company’s 100,000 MT polysilicon project in Baotou City, Mongolia, which was partially offset by a $265 million redemption of short-term investments.

“In the first half of 2022, despite a 53.4% increase in production volumes in China over the same period of 2021, polysilicon was still a drag on the entire solar PV manufacturing value chain and capacity expansion was meaningfully slower than in the downstream sectors. Challenges in getting energy consumption approvals, long construction times, and delayed ramp-up times, as well as the operational inexperience of new players, make polysilicon one of the sectors with the highest entry barriers and slowest expansion growth in the solar PV manufacturing value chain. We expect this imbalance to continue for a while and help our sector greatly benefit from the robust market demand,” added Zhang.

The company posted revenue of $1.28 billion in the first quarter (Q1), a YoY growth of 399% from $256.1 million in Q1 2021.

Earlier this year, Mercom reported that in 2021, China exported 100 GW of solar modules, overcoming the challenges posed by the Covid-19 pandemic. The country deployed 55 GW of new solar installations last year while maintaining an annual output growth rate of 50-60%.