Daqo New Energy Corporation (DQ) has reported a 57.07 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $4.13 million, or $0.39 a share in the quarter, compared with $9.62 million, or $0.91 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $6.16 million, or $0.58 a share compared with $11.87 million or $1.12 a share, a year ago. Revenue during the quarter dropped 22.20 percent to $46.12 million from $59.28 million in the previous year period. Gross margin for the quarter expanded 220 basis points over the previous year period to 30.74 percent. Total expenses were 79.29 percent of quarterly revenues, up from 75.94 percent for the same period last year. That has resulted in a contraction of 335 basis points in operating margin to 20.71 percent.
Operating income for the quarter was $9.55 million, compared with $14.26 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $17.64 million compared with $23.38 million in the prior year period. At the same time, adjusted EBITDA margin contracted 119 basis points in the quarter to 38.26 percent from 39.45 percent in the last year period.
"The fourth quarter of 2016 was an important milestone for Daqo New Energy. and interconnections between our new facilities and existing facilities in Xinjiang at the same time. We also successfully completed all the construction and installation work related to Phase 3A polysilicon expansion. As maintenance, construction, installation of new equipment, and interconnection of facilities were conducted concurrently, our annual maintenance for 2016 took longer than usual to complete. However, the combination of these efforts allowed us to start initial production of our expanded production capacity in the first quarter of 2017, months ahead of our original schedule. We have already reached full production throughput of 18,000 MT per annum by the end of February 2017." said Dr. Gongda Yao, chief executive officer of Daqo New Energy.
Operating cash flow improves significantly
Daqo New Energy Corporation has generated cash of $98.67 million from operating activities during the year, up 48.55 percent or $32.25 million, when compared with the last year. The company has spent $66.12 million cash to meet investing activities during the year as against cash outgo of $74.13 million in the last year.
The company has spent $30.28 million cash to carry out financing activities during the year as against cash inflow of $15.24 million in the last year period.
Cash and cash equivalents stood at $15.99 million as on Dec. 31, 2016, up 10.33 percent or $1.50 million from $14.49 million on Dec. 31, 2015.
Debt comes down
Daqo New Energy Corporation has recorded a decline in total debt over the last one year. It stood at $243.66 million as on Dec. 31, 2016, down 7.23 percent or $18.98 million from $262.64 million on Dec. 31, 2015. Interest coverage ratio deteriorated to 2.33 for the quarter from 3.35 for the same period last year.
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