China-based photovoltaic (PV)-grade polysilicon manufacturer Daqo New Energy Corporation reported a net income of $278.8 million in the first quarter (Q1) of the financial year (FY) 2023, which corresponds to a 48% year-on-year (YoY) decline, primarily due to lower demand along with lower average selling price (ASP) for its products.

Daqo polysilicon sales volume for the first quarter declined by nearly 35% YoY to 25,284 metric tons.

The company said that ASP for polysilicon stood at $27.83/kg in Q1 2023, compared to $37.41/kg in Q4 2022. However, the company did not disclose the YoY comparison.

Daqo said that polysilicon demand was weak in January due to the seasonal slowdown in the solar PV industry. “In February, lower module prices stimulated end-market demand causing a meaningful recovery in demand and price improvement across the solar value chain. In March and April, polysilicon ASPs declined gradually due to increased polysilicon supplies and constrained short-term demand from wafer manufacturers caused by the limited supply of high-purity quartz used in the silicon-ingot production process,” it said.

For the January-March period, the company’s revenues came in at $709.8 million, a drop of 44.5% YoY.

The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at $490.2 million, a decrease of 40% YoY.

During the first quarter of 2023, the company’s selling, general, and administrative expenses were $41.3 million, which increased significantly from $15.5 million in the same period last year.

Longgen Zhang, CEO of Daqo New Energy, commented, “Efficient operation of our polysilicon facilities in the first quarter of 2023 resulted in a production volume of 33,848 MT. Our production cost decreased by 5.5% in RMB due to reduced metallurgical-grade silicon powder procurement costs. We generated $490 million in EBITDA for the quarter with strong operating cash flow and maintained a healthy balance sheet.”

The company said that with the construction of Phase 5A 100,000 MT polysilicon project in Inner Mongolia, it expects production capacity to reach 205,000 MT per annum. Total production volume would be 44,000 MT to 46,000 MT of polysilicon in Q2 2023, an increase of 30% to 36% compared to Q1 2023 and approximately 193,000MT to 198,000 MT of polysilicon in the full year of 2023, an increase of 44% to 48% as compared to 2022.

Zhang said that in April, the subsidiary Xinjiang Daqo’s cash dividend plan for 2022 was approved by its shareholders. “Therefore, as a 72.7% shareholder of Xinjiang Daqo, we expect Daqo New Energy to receive the dividend distribution in May with an amount of approximately RMB4.96 billion (after tax), which could be the financial source to implement the approved share repurchase plan,” he added.

Daqo New Energy Corporation posted a YoY spike of 164% in its net income at $372.9 million for the fourth quarter of the financial year 2022, backed by increased earnings from polysilicon sales.

Daqo New Energy posted a net income of $323.4 million in the third quarter of 2022, up by 11% YoY.