Total revenue for 2013 was US$109 million, compared to US$86.9 million in the prior year. The increase was said to be primarily due to higher sales volume of both polysilicon and solar wafers.

China-based polysilicon and wafer producer, Daqo New Energy Corp reported narrowing quarterly losses on improved shipments of polysilicon and wafers in the fourth quarter of 2013.

The company said that its new Xinjiang polysilicon production facility had reached close to its nameplate capacity of 6,150MT per annum, with production of 1,445 MT in the fourth quarter of 2013, up from 1,311MT and 962MT in the third and second quarters of 2013, respectively.

Daqo said that it shipped approximately 4,240MT of polysilicon and 33.5 million pieces of solar wafers during 2013, compared to 3,585MT of polysilicon and 15.1 million pieces of solar wafers in the previous year.

The company also shipped approximately 119.6MT of silicon ingots during 2013, compared to 500MT in 2012.

Previous plans to double polysilicon production at its Xinjiang production complex are going forward with the company saying that it would commence ground preparing construction on a new expansion at the Xinjiang facility in April of 2014. Financing for the project had not been set but the company is reviewing a range of options, management noted in an earnings call.

Daqo is cutting capital expenditure requirements for the new 6,000MT facility by relocating a key amount of equipment and machinery from its shuttered polysilicon plant in Chongqing. Daqo also noted it would upgrade its off-gas treatment process from traditional hydrogenation technology to hydrochlorination technology to reduce production costs at Xinjiang, which would begin with its annual scheduled maintenance work in April and completed by the end of 2014 with full ramp up of the new capacity by the second quarter of 2015.

At that point, Daqo expects to be targeting polysilicon production costs of US$12/kg, despite its relatively small scale compared to larger rivals such as GCL-Poly which has a nameplate capacity of 65,000MT.

With wafering operations continuing to expand on strong demand, Daqo is planning to add a slurry recycling system at its ingot/wafer facilities to further reduce production costs.

Fourth quarter results

Daqo reported revenue of US$37 million in the fourth quarter of 2013, compared to US$29.6 million in the third quarter of 2013, and US$6.2 million in the fourth quarter of 2012.

Polysilicon revenue in the quarter was US$24.2 million, compared to US$22.9 million in the third quarter, helped by a significant increase in ASPs, which increased from US$17.99/kg in the third quarter of 2013, to US$18.67/kg in the fourth quarter.

Solar wafer sales in the quarter were US$11 million, compared to US$6 million in the third quarter, due primarily to higher sales volumes, according to the company.

The company reported an EBITDA of US$8.1 million, compared to US$6.8 million in the third quarter of 2013. EBITDA margin was 21.9% compared to 22.9% in the third quarter of 2013, and negative 754.9% in the fourth quarter of 2012.

Gross margin was approximately US$1 million compared to a gross loss of US$3.9 million in the third quarter and a gross loss of US$11.1 million in the fourth quarter of 2012.

Daqo reported a quarterly operating loss of US$4.1 million compared to US$5 million in the third quarter of 2013, and US$55.9 million in the fourth quarter of 2012.

Full-year results

Total revenue for 2013 was US$109 million, compared to US$86.9 million in the prior year. The increase was said to be primarily due to higher sales volume of both polysilicon and solar wafers.

The company reported a gross loss for the year of US$26.1 million, compared to a loss of US$37.4 million in 2012. Gross margin was negative 23.9%, compared to negative 43.1% in 2012. The decrease in gross loss was due to improved cost structures in both polysilicon and wafering operations, including higher utilisation rates and increased sales, according to the company.

However, Daqo undertook a US$158.4 million impairment loss for its polysilicon facility closure in the second quarter of 2013.

Operating loss was US$200.6 million in 2013, compared to an operating loss of US$88.5 million in 2012. Excluding fixed asset impairment loss, non-GAAP operating loss was US$41.8 million, down from US$45.8 million in 2012.

Guidance

Daqo expects demand for its products to further increase in 2014, driven by global end market demand of over 45GW with greater demand expected in the second-half of the year.

The company guided shipments of 1,350MT to 1,400MT of polysilicon and approximately 16.6 million to 17.0 million pieces of solar wafers for the first quarter of 2014.

Daqo management noted in its fourth quarter earnings call that polysilicon ASPs would remain in a range of US$20/kg to US$25/kg in 2014.