Good morning and good evening. First of all, thank you for joining this conference call. Now we will begin the conference of the Fiscal Year 2023 First Quarter Earnings Resulted by OCI. 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 First Quarter Earnings Resulted by OCI.
Good afternoon. This is Woo Hyun Lee. I'm the Vice Chairman of OCI. I'll be in charge of for this, the earning release for first quarter 2023. I'll go with the page four. Before we start it, as you might be aware, there was a the shareholders approval on the corporate spinoff, so the company will be split off to one part portion will be OCI Holdings, and another company will be OCI Company that will be dominantly in the chemical manufacturing business. That will be, the split will be done on May 1st, so this earning release is gonna be the last earning release before the split off.
When we look at on the page four, this number is going to reflect what's the number look like as a holding company level alone before it turning to be some holding company structure. When we look for the independent number only, the first quarter revenue was KRW 719.5 billion, and operating income was KRW 203.6 million. However, if you go to page five, this would be a lot more familiar, the figures that should be in line with what has been just as a consolidated number.
Based upon those, the pre-spinoff basis, the first quarter revenue is KRW 1,195 billion as a revenue, and operating income is KRW 251.8 million. This is the revenues about 10% down and operating income went down by 27% due to the several reason, and I will get back to you in divisional section. Mostly, the polysilicon price was fluctuated when overall the solar PV the market fluctuate during the Chinese Lunar Year the time which was the last week of January and the first part of February. There was a substantial some turmoil in the overall the solar PV market.
Also for domestic, the factor was there was substantial increase in domestic electricity price that actually inevitably caused some negative impact on the earning. Furthermore, starting from last December, the Korean government has been reduced the SMP, which is a system marginal price for electricity wholesale pricing. In starting from December 1st last year, the government decide to shut the cutoff by almost 30% of the revenue of all those, the power generation business that inevitably caused some negative impact on our business. This KRW 1,195 billion of the revenue with KRW 251.8 billion of operating income has been the result of those negative impact.
However, the considering all those, the negative some of the factors, we were able to minimize those negative factor, that we were able to produce quite decent the performance like as we reported to you. I will go to page six. This is gonna be our pre-split off the basic chemical, the business that includes the solar PV the polysilicon and also the semiconductor-grade polysilicon and also semiconductor-grade the chemical business. The first highlight is the sales and operating income fell down and the volume-wise dropped by 10%. Also, ASP also went down by 10% due to substantial turmoil in and every pricing of the solar PV value chain.
Starting from March, the pricing for most of solar PV value chain has been stabilized, and that actually helped to maintain certain profitability. Other, the domestic business-wise, the profitability has been negatively impacted by increased the electricity price, that's almost like 41% year-over-year. That has been some of the negative impact on the first quarter. For outlook for second quarter is we anticipate stable market demand for polysilicon. Despite all the incoming excess capacity out of China, however, due to strong demand for clean module, that means the solar PV module made out of non-Chinese value chain, has been actually quite strong.
Despite that, there might be certain price adjustment, the demand for the non-Chinese polysilicon market has been stable and also quite strong. We should be able to maintain certain profitability in second quarter. Going back, going to page seven, petrochemical and carbon material. This entire business unit will move to OCI, this is the new operating company. This, the first quarter, we have recorded KRW 518 billion of revenue, with KRW 39 million of operating income. That market was somewhat. We went through another turmoil in this sector because our petrochemical and the carbon material, the pricing of these products are highly correlated to oil price movement, which was somewhat quite up and down, quite extensively in the first quarter.
In the meantime, the overall demand for petrochemical product globally has been quite weak, due to some of the concern, the recession in many key markets. We experienced both, the increase, the cost for feedstock, but then also unstable some of the market. We had a somewhat like a sluggish time for this market. However, we were able to defend some of the pricing for our key products that actually enable us to generate a fairly decent return on this business. Second quarter will be even more the turmoil because as you might be aware, many of those petrochemical complex has been downsizing their the operation.
Many of our competitors in and outside of Korea, they lower their operating rate by minimum 20% or as low as 40%. Many of the market is currently running in a much lower capacity utilization. That issue because many of our company are concerned about some of the weak demand going forward. We are paying attention the supply side and also the demand side. We will try to make sure that we maintain a certain profitability despite all the turmoil in the market. I'll go to page eight. Anode solution is made out of pretty much two separate business. One is OCI SE, that is combined heat power producer in Korea in Kunsan area.
Their business has been negatively impacted by the adjustment in SMP, the pricing. So-called, we wrote that implementation of SMP cap. That means the government just force the market mechanism. Power generation player like OCI, we have just immediate 30% revenue cut by those, the government intervention starting from December, and this will likely last until end of the November this year. We have been negatively impacted on this part. In this Gunsan, area, due to rising the energy cost, many of the battery-related company, those battery recycling player or those who are making the advanced anode product for battery, are coming to in Gunsan, industrial zone, where OCI has exclusive right to serve some of the utility service.
Going forward, the market, the perspective on our, this, the power generation business in Korea is actually getting much better and better year by year. However, at this moment, some, we have been negatively impacted due to the sudden, the implementation of SMP cap announced by Korean government in November last year. For the next two quarters, we will be likely impacted by SMP cap. That's the domestic part. Second part, our energy solution or with this includes our, the solar power generation, the business in, and also Mission Solar Energy's, our U.S. subsidiary for module making. They are doing quite well. And we believe they will continue to do well, and this will be some, another growth engine for OCI.
This is a snapshot of first quarter. Second quarter, as I mentioned earlier, the SMP cap is still there in Korea. This is actually negative part for our profitability, but we already announced 110 MW solar PV project was sold to our international buyer, and we are pretty much confirmed to monetize another 310 MW of some of the asset that will be highly likely closed in this second quarter. We have some of the good news and bad news, and hopefully, we're trying to improve this circumstance going forward. Page nine, urban development is the business-wise, nothing special.
The most of the P&L is just based upon the sales and operating income recognized from those constructions for these residential unit that we sold in 2021. Ever since, we have not going into any additional residential unit sales yet due to sluggish market economy, and also we still have some regulatory issues that we need to settle with Incheon City Government. We anticipated all the remaining regulatory issue will be done in hopefully end of this quarter, or at least end of third quarter. Once we complete all of the regulatory approval done, then we will look for some ideal time for our residential sales activity.
Still, some of the housing market in Korea is not so active now. We would most likely, we will not going into any residential apartment sales activity end of May, end of this year. This would mean, we were targeting as early as first quarter next year, or realistically for the second quarter of next year. Until then, our activity in this urban development has been quite stable and quite limited, and this will likely stay that way. On to the financial position, which, I mean, normally we used to call just the balance sheet for page 10. Nothing, the substantial changes because, I mean, we have been recording some of the positive the cash flow.
Most of our, the financial position paper has been improved mostly. As you can see, the net debt number in the bottom of those, the table, you can see that KRW 534 billion of net debt of end of last year, it went down to KRW 173 billion. Hopefully, by end of next quarter or, you know, going into third quarter, hopefully we see that some, the negative net debt number going forward. As I've been doing this earning release announcement for the more than 10 years, past the 10 years, and I have been always stressed out the importance of a sound financial position.
We will make sure that despite our business will be split into OCI Holdings and OCI for the operations business, and this discipline for managing the sound financial position will stay there and we'll make sure that we will continue to improve. This is the end of the earnings release, and I'll go to some of the business updates that go in page 12. As you can see on those data table, we have been experiencing quite like a rollercoaster or something like a turmoil in the pricing in every the solar PV value chain.
The reason it happened on January is in the U.S. and the Europe, those the products mostly exported from China that was stayed in the U.S. custom office and also European custom office, was released by end of actually the January. That actually caused just so it inevitably caused the sudden oversupply situation in every product category. That actually drove many of the price down quite substantially in the end of the January. However, after two weeks from those, the release of those, the constrained inventory, the pricing has been stabilized and all the supply and chain and supply and the demand, the equilibrium has been somewhat stable.
As you can see on the page two, this has been some, it's a trend that the polysilicon made in China and polysilicon made outside of China, the premium on this, the non-China-based polysilicon has been strong because this is mostly due to the strong demand for clean module in the U.S. and also the Europe. I mean, the many institutional investors wish to secure all the important solar PV, their parts and components and sourced from, exclusively from, non-China basis.
The pricing premium for the non-China-based polysilicon has been quite strong, and we anticipate that this premium will last fairly for some, I mean, some time. For OCI, we are supplying to our customer and our more than two-third of our sales volume, it will be actually sold, so it has been sold close to this the premium pricing rather than the making the China products. We would like do our best to make sure that our quality stay ahead of the our competition. Also we would like to maximize this marketing opportunity on this non-China-based polysilicon pricing.
When I go to the page 13, solar PV installation is also still looking strong because when due to the war in Ukraine actually spark the need for energy independence, and that actually embark the strong demand for the PV solar value chain. The PV solar industry in general experienced a 40% year-over-year growth in 2021, 2022. Based upon our interaction with the market and also supplier and also our vendors and our customers, we anticipate the key market in the world will continue to grow minimum at least the 10% per annum for the next five to 10 years. The installation demand is actually quite strong.
The only, the concern from the market is right now, the a certain part of the U.S. and certain part of China, and also certain part of Europe, their, the supply of renewable energy power generation has been too much dominating source in terms of the some, the supply volume. There has been potential risk for curtailment on because of the congestion and grid. The need for, yes, the work collaboration with ESS for the renewable energy has been more important and that is becoming critical in order for this entire industry to continue to grow. OCI will also pay attention to this, the need of working together with ESS, and we'll make sure that we can stay ahead of those competition.
On page 14, this is a simple business update that our that we went through the rating agency's revaluation on corporate bond on OCI. We're proud to announce that our the rating has been upgraded from A zero, A zero Positive to A+ stable. This has been some and this is a fairly high and very stable the status for and confirmed by rating agency. We're very pleased to be back to A+ stable because so we were able to be this position in almost 11 years. We'll make sure that at least we stay here or hopefully we can actually to even upgrade from one more from this. Secondly is the high-purity phosphoric acid business.
This will go into our new operating company. 25,000 ton has been in full operation, and we're actually expanding our market. We have been selected as a prime supplier of this the phosphoric acid to Samsung's new foundry factory in Taylor, Texas. This, and we will start supplying this the product first half of next year. This will be the beginning of our new expansion in the semiconductor-grade chemical market. Hopefully we can announce the more of this type of some the new expansion of our the semiconductor-related the product business.
In case of solar-grade polysilicon, our, the OCI, the Malaysia factory has been working diligently to improve our quality and also to make sure that the maximizing some our production capacity. We are currently making serial expansion because it's not economical and also it would be too expensive to making some just one lump sum big expansion.
We are making pretty much about 10,000 tons per annum type of polysilicon expansion in Malaysia and make sure that we lead in this non-China-based polysilicon supplier market and also to make sure that we are to take advantage of this, the clean module demand situation. Solar PV module, which is done by our MSE, which is our U.S. subsidiary located in Texas. This second quarter, we will be completing the second phase expansion that will make us to 350 MW of capacity, and we will continue to work hard to complete our third expansion by end of this year.
Early next year, we'll be able to have minimum 1 GW of the capacity that will be predominantly serving for the faster-growing lucrative U.S. market. Also solar PV project, as I mentioned earlier, in April, we already completed sale of 110 MW project sales. Also in the first half, which is this month, this quarter, we should be able to sell two more projects that will be close to 310 MW, the project scale. Additionally, we already secure over 1 GW from the pipeline.
This will make us, we're currently being a number one power generation developer in Texas, and we're diligently working hard to being us in the more substantial play in the lucrative U.S. market. Hopefully, I mean, this will turn into be another group engine for OCI. Page 15 is the something, I mean, I just illustrate how volatile than our the coal and petrochemical market. As you can see, some of the pricing has been crazily actually goes up and down. We had some issue of securing some the feedstock in a stable pricing.
I mean, that has not been the case for the first quarter and it's gonna be the second quarter because the global market has been tumbling so much. We will do is we will try to stabilize our supply source and also, try to do more aggressive marketing, try to not to keep any inventory any time long. We should be able to monetize as soon as possible to try to minimize the impact of some of the market fluctuation. The last one would be the page 16, and this is gonna be the snapshot of our the corporate split up, the process. As I mentioned earlier, OCI will be split into two company. The surviving company, our good name, will be changed to OCI Holdings.
The new company, split new company, will be the operating company, but they will assume the OCI Company name. The new company will assume the, our old name, and surviving company will change our, the name, in this way. This whole process was approved by our shareholders meeting in the March 27th. Our company, shares will be start trading, the, in this Thursday. These two separate company will be splitted, on May 1st, and our two separate stock of two companies will be relisted in the Korean stock market on May 30th. After that, there's gonna be tender offer of the shares for the new company.
We anticipate that, in fourth quarter, the holding company will be structure will be completed and the new governance structure will be completed. On page 17 is the financial impact on some of the businesses. OCI Holdings and OCI, the both company will have this type of the financial structure. Starting from this July, the separate two company will have independent the earning release going forward. We will come back to you in three months and try to update you what happened and also, we'll also share more about some, the new company's perspectives going forward. This will be the end of my the earning release.
I have been doing this, the earning release since second quarter of 2006. We've been doing this for over like six, 17 years. This will be my last, the earning release. Starting from this July, the other management team member of both OCI Holdings and OCI will have a separate, the earning release. Thank you very much your support, and I will take any question if you may have.
As there are no participants with questions, we will now end the Q&A session. For any additional inquiries, please contact our IR department. This concludes the Fiscal Year 2023 First Quarter Earnings Resulted by OCI. Thanks for the participation.
Thank you very much.