Good morning, and good evening. First of all, thank you all for joining this conference call, and now we will begin the conference of the fiscal year 2023, third quarter earnings results by OCI Holdings. This conference will start with a presentation, followed by a divisional Q&A session. If you have a question, please press asterisk and one. That is asterisk one on your phone during the Q&A. For cancellation, please press asterisk and two, that is asterisk two on your phone. Now, we shall commence the presentation on the fiscal year 2023, third quarter earnings results by OCI Holdings.
Good evening. My name is Jae Lee, and I am the CSO of OCI Holdings. Thank you for joining our earnings call for the third quarter of 2023. I will present with the materials posted on our website. To begin with, I'd like to provide an update on the progress of OCI Holdings' Corporate Split and transition to a holding company, which is currently in its final stages. From August 31st to September 20th, OCI Holdings conducted a public takeover and a capital increase procedure for OCI Company stock. During this process, we acquired around 2.3 million shares, which is 31.99% of the issued share of OCI Company. OCI Holdings also had 1.26% shares from the time of the Corporate Split, resulting in a total of 33.25% ownership. This acquisition satisfied the requirements for establishing a holding company.
Today, both OCI Holdings and OCI Company held their board meetings to approve the in-kind contribution of certain OCI Holdings subsidiaries to OCI Company. This decision was made for the subsidiaries that are closely related to OCI Company in terms of business operations. Specifically, OCI China, P&O Chemical, OCI Japan, Philko Peroxide, and OCI Dream are the subsidiaries subject to this in-kind contribution. The valuation of these subsidiaries for the in-kind contribution was determined in accordance with the usual practice, resulting in a total value of KRW 165 billion. Once this valuation is approved by the court, OCI Holdings is expected to secure more than 40% of OCI Company shares in early next year. Next page is the third quarter consolidated financial results.
In the third quarter, the consolidated revenue was approximately KRW 690 billion, and the operating profit was approximately KRW 131 billion. Compared to the previous quarter, revenue increased by 16%, while operating profit decreased by 1%. As I will explain in the next section, apart from the decrease in quarterly revenue due to the downturn in the U.S. module market, other major subsidiaries recorded overall growth in revenue compared to the previous quarter. From page 6, I will explain the performance and outlook for major subsidiaries. First, let's talk about the performance in the Malaysian polysilicon business. Sales volume increased by 25% compared to the previous quarter.
Due to the maintenance work conducted in the last quarter, the cost rate has slightly increased, but a profit of around KRW 90 billion was secured with an operating rate consistently maintained at over 90%. Next is the operating result of OCI Enterprises. As shown in the data, OCI Enterprises' consolidated revenue decreased by approximately KRW 13 billion, compared to the previous quarter, and operating profit turned negative. The main reason for this is the sharp contraction in the U.S. residential module market that Mission Solar Energy mainly targets. As a result, Mission Solar Energy recognized an impairment on long-term inventory, leading to a decrease in revenue and operating profit. On the other hand, OCI Solar Power successfully sold two solar projects in the last quarter and continued to operate stably by selling a 100-megawatt ESS project in the third quarter.
Page 8 shows the result of the OCI SE, our cogeneration business. The key indicator, SMP prices, decreased this quarter. However, by securing a 100% operation rate, power sales increased. Now, OCI SE is preparing for the anticipated steam demand that will begin from 2024, as battery companies and others start moving into the Saemangeum Industrial Complex. Last is the operating result of DCRE, a subsidiary for urban development. Sales and operating income were recognized as usual, according to construction progress. The construction project proceeded smoothly, resulting in increased revenue and operating profit. In addition, the approval process from city government, which had been delayed, has been completed. As a result, we are progressing with preparations to resume the next stage of apartment sales. Now, moving on to management update. First, let me provide an overview of the solar market trend.
As you may be aware, the first half of this year saw an accelerated drop in solar product prices. The polysilicon prices also reached the lowest level of 2020. However, in the third quarter, supply constraints were observed due to the delayed or the halted expansion of Chinese polysilicon. As a result, the price has somewhat rebounded. In particular, a noticeable price differential between Chinese and non-Chinese polysilicon has been established since earlier this year, and it was maintained during the third quarter. It seems that the competition for securing non-Chinese polysilicon for the wafer production outside of China is expected to continue for the time being. Our company is also experiencing an increase in discussions and contract with customers. Moving to page 11, I'd like to provide more detailed insight into the overall solar market and the U.S. customs clearance situation.
OCI Malaysia procures all of its metal silicon from non-Chinese suppliers. The ongoing issue of U.S. CBP clearance, which was somewhat uncertain until earlier this summer, has been resolved recently. Thanks to this, we have seen an increase in discussions on supply contract with both existing and new customers. Lastly, I'd like to provide a brief description of OCI Holdings' subsidiaries business operation in Malaysia. After the acquisition of OCI Malaysia in 2017, OCI Holdings went through some initial challenges, but since then, we have expanded production capacity by 250% and increased sales by 430%. As a result, OCI Malaysia achieved KRW 1 trillion in cumulative EBITDA in the first half of this year. Also, we have established OCI Kumho in a joint venture with Kumho Petrochemical, which is focused on environmentally friendly ECH production.
Moreover, we have plans to launch a joint venture with Tokuyama for the production of 11,000 tons of semiconductor-grade polysilicon. Furthermore, considering the international situation and market conditions, if the planned expansion of polysilicon proceeds as expected, we are planning to invest more than KRW 1 trillion in the Samalaju region of Malaysia over the next five years. I will wrap up the presentation now, and we are now open for questions and answers. Thank you.
Now, Q&A session will begin. Please press asterisk one, asterisk and one, if you have any questions. For cancellation, please press asterisk two, asterisk and two on your phone. The first question will be given by Veeral Gandhi from Ninety One. Please go ahead, sir.
Hi, just a question on the Malaysia subsidiary. I saw that quarter-on-quarter sales grew, but operating income was flat, quarter-on-quarter. Could you just talk me through why there was an increase in cost?
Cost increase, the way-
Okay.
Okay, thank you for your question. Yeah, yes, some of OCI Malaysia's costs increased. It is mainly because OCI Malaysia changed its metal silicon source to the non-China region, so it raised some of our OCI Malaysia costs. And the other one is the regular maintenance. OCI Malaysia took a regular maintenance in this quarter, and that's the other reason of cost raises. Thank you.
As there are no further questions, we will now end the Q&A session. For any additional inquiries, please contact our IR department. This concludes the fiscal year 2023 third quarter earnings results by OCI Holdings. Thanks for the participation.