Thank you for joining OCI Holdings Q2 2025 on-call. I am Su-Mi Lee, CEO of OCI Holdings Company. I will provide you a brief overview of the presentation materials available on our website. First, let me explain the Consolidated Operating Result on page 5. In Q2, we recorded a sales revenue of KRW 776 billion and Operating Loss of KRW 77 billion. The sales revenue decreased by 18%, and Operating Income turned negative Q2. While all major subsidiaries faced Macroeconomic Headwinds, OCI TerraXas, our Core Polysilicon Business, was particularly affected by uncertainties surrounding U.S. Trade Policy. I will provide details on the performance of key subsidiaries in the following pages. Page 6 shows consolidated financial position as of the end of Q2. Compared to the end of Q1, both Total Assets and Liabilities decreased. Our financial position was influenced by several factors, including Foreign Exchange Rate Movements.
On the asset side, Accounts Receivable primarily from OCI TerraXas and OCI Company declined due to lower sales. The decrease of Inventory and Account Payables was mainly driven by DCRE. On the liability side, Debt increases due to Bond Issuance by OCI Company for refinancing and operational purposes, raising the Net Debt Ratio from 5.4% - 12%. Despite this, the Balance Sheet and overall Financial Position remained quite strong and stable. Next, I will explain the performance of key subsidiaries. Page 7 provides details on the performance of OCI TerraXas, our Polysilicon Business Unit. In Q2, OCI TerraXas' sales revenue declined by 66%, and Operating Income turned negative. Sales Volume dropped 64% Q2, with the Operating Loss reflecting Planned Shutdown Cost for Inventory Adjustment and inventory valuation losses. Market uncertainty peaked during this quarter due to a shift in the U.S.
Trade Policy and revisions to the IRA, leading to Operational Suspensions at customer sites. Demand was virtually nonexistent, prompting us to halt operations at our facility to manage Cash Flow and Inventory. Although the Plant remains offline now, we are scheduled to restart operations in Q3. The market conditions remain uncertain; however, we have recently engaged in constructive discussions with our customers. With the enactment of the new IRA, we expect demand to gradually recover. Page 8 highlights the performance of OCI Enterprises. Our U.S. business experienced a 35% decline in sales and recorded an Operating Loss. Operations remained normal without any product sales. Mission Solar Energy completed the sale of its remaining Module Inventory and recognized $2.7 million in AMPC. In July, OCI Energy is completing the sale of two projects totaling 220 MW, which will contribute to our Third-Auarter Earnings.
Mission Solar Energy will be supplying ODM Modules to existing customers based on confirmed orders while preparing for strategic decisions regarding Cell Investment. Page 9 outlines the performance of OCI SC's Cogeneration Power Plant. OCI SC recorded an 8% decline in sales and a 61% drop in Operating Income. Although the SMP, our key sales and profit driver, increased slightly in Q2, supporting electricity sales, lower REC volume weighed on profitability. Operating Income was further impacted by maintenance costs booked during the quarter. Looking ahead to Q3, SMP is expected to improve slightly with the onset of the peak demand season, and earnings are expected to be normalized following maintenance. Page 10 presents the performance of DCRE, our urban development project. In Q2, DCRE completed the Pre-Sale of Complex 7, totaling 1,453 units. Sales and Operating Income were primarily recognized based on the Construction Progress of Complex 6.
However, due to an additional Land Evaluation Loss, Operating Income turned negative. In Q3, both sales revenue and Operating Income are expected to grow, driven by continued Construction Progress of Complex 6 and 7. In addition, preparations are also underway for the final Pre-Sale of the year, Complex 8, comprising 1,348 units. Next is regarding OCI Holdings Company's performance. For detailed explanations, please refer to OCI Holdings Company's IR materials. For both OCI Holdings Company's sales revenue and Operating Income were reduced due to sales sluggishness for the main chemical products and ASB declines. On a Consolidated Basis, OCI Holdings turned negative after fully reflecting the performance of P&O Chemicals, which continues to operate at a low utilization rate amid the broader Down Cycle in Semiconductor Materials. While overall Market Demand remains low for general Chemical Products, the improved spread in some Carbon Chemical Products will help Q3 Earnings Q2.
Now, let me provide Key Management Updates from page 13. In Q2, the Inflation Reduction Act was finally announced and enacted into law, which had a significant impact on the U.S. solar value chain. Our main subsidiaries, OCI TerraXas, Mission Solar Energy, and OCI Energy, and their businesses were directly affected by Policy Changes. We have highlighted the short-term implications and strategic direction under the chart below. For certain, the U.S. Inflation Reduction Act is prompting a Strategic Realignment of the domestic solar value chain. Its FEOC provisions create new opportunities for Non-China Solar Manufacturers. In response to increasing Non-FEOC Requirements, our subsidiaries are pursuing strategic initiatives to capitalize on the opportunities presented by the Inflation Reduction Act. Our primary focus is to establish a Non-FEOC Value Chain for our Polysilicon and downstream businesses in the U.S.
OCI Energy is well-positioned under the Inflation Reduction Act, with nearly 6 GW Pipeline Projects ready to begin construction in this year and next year. Page 15 provides updates on our urban development project. In Q2, DCRE successfully completed the Pre-Sale of Complex 7, totaling 1,453 units. While some investors have raised concerns about the Pre-Sale Real Estate Market, amid these tighter real estate policies, we have completed five rounds of Pre-Sale to date, with Unit Prices consistently exceeding the Initial Offering Price. Three more rounds of Pre-Sales are scheduled by next year, and we are targeting project completion by Year 2029. Pages 16 and 17 highlight the financial position of our key subsidiaries and outline upcoming Project Milestones. Some investors have also raised concern about our Balance Sheet and Liquidity, given our significant CapEx plans.
It's important to note that our Balance Sheet includes Project Financing Loans related to the urban development project. Excluding DCRE, we maintain a Net Cash Position. OCI TerraXas recently established a joint venture with Tokuyama Corporation to produce 8,000 metric tons of Electronic-grade polysilicon in Malaysia. Construction will begin in Q3, with the initial production targeted for the first half of year 2027 for qualification tests by the customers. Although earnings are currently under pressure due to external factors, we anticipate improvements starting the second half of this year as market demand recovers and our investment begins to generate returns. I will conclude the presentation here. Please refer to the appendix for recent trends in the solar industry. If you have any further questions, please contact the IR team. Thank you for joining the call.