Good morning and good evening. First of all, thank you all for joining this conference call. Now we'll begin the conference of the Fiscal Year 2022 Fourth Quarter Earnings With OCI. This conference will start with a presentation followed by a Q&A session. If you have a question, please press asterisk and one, that is asterisk one on your phone to make a Q&A. For translation, please press asterisk and two, that is asterisk two on your phone. Now we should connect the presentation of the fiscal year 2022 fourth quarter earnings with OCI.
Hello, good afternoon. This is Woohyun Lee for OCI. would like to go ahead with 2022 fourth quarter earnings release. I'll go with the first page for 2022 annual consolidated income statement slide. 2022, we have experienced a lot of unexpected issues, especially sparked by the war between Russia and Ukraine that erupts many of supply chain issue globally, not only energy prices but also many other key raw material for industrial activities and that also erupted global logistics issues that made a quite negative impact on overall the business environment. However, thanks to all the significant effort by the employees and our partners and our customers, we were able to make actually the good results 2022.
In terms of sales revenue, OCI has recorded KRW 4.67 trillion . That's about 44% increase year-over-year compared to the previous year. Our operating income has recorded close to KRW 1 trillion , which is KRW 981 billion , which was a 57% year-over rise from compared to year before. This is the largest profit since 2012, which we are quite proud of. Go to the page five. This is the quarterly earnings. Our quarterly sales recorded KRW 1.3 trillion . That's about 4% year-over-year growth. However, operating income, we have recorded KRW 348 billion , which is a 21% quarter-over-quarter increase.
Despite of many maintenance activity in domestic plants, however, the strong market for solar PV market drove polysilicon price strong and also the volume high, and that tremendously help us to achieving some of the results. I go to page six on the Basic Chemical sectors. Basic Chemical sector includes polysilicon and many other semiconductor related inorganic chemical business, including hydrogen peroxide and phosphoric acid. The biggest contributor for the good result of KRW 571 billion of sales and with the KRW 249 billion of the operating income for the last quarter was thanks to the strong polysilicon sales, which went up by 13% by volume and 5% by pricing, and that made a good contribution to the good results.
However, early January of 2023, which is the first quarter, we have experienced the sudden the price fluctuation in the polysilicon price and also many other solar chain basis because prior to the Lunar New Year holiday and many of the Chinese companies, they intended to minimize some of their inventory, some of the carrying costs, and so they stopped purchasing the upstream products, especially polysilicon and wafer, and that drove over polysilicon and wafer price down quite substantially. However, after the Lunar New Year holiday, many of our Chinese operations went back to normal, and they have resumed some ordinary procurement activity that also help us to recover a substantial portion of the solar value chain pricing.
We anticipate that relatively stable polysilicon pricing over this quarter. Go to page seven, which is the Petro Chemicals & the Carbon Materials business. This segment that we have been mostly impacted by the war between Ukraine and Russia, because that not only drove global the carbon price went up, especially the crude oils and the natural gas and coal. Because of this, many of the consequence from those the war, it actually inflated so much on those raw material cost section. However, due to the global sluggish economy led by strong interest rate hike by the U.S. Federal Reserve, that also negative impact on some of the downstream market.
While the upstream price went up, but the downstream stream market actually become weaker, that actually drove the entire Petro Chemicals & Carbon business in very difficult position. However, we were able to maintain certain level of, you know, margins by maximizing our productivity and minimizing our development or costs. We have recorded KRW 490 billion of the quarterly sales where we recorded KRW 30 billion of operating income. We believe that this is fairly some the way, the number, especially considering the sluggish business environment. Also we have went through our annual turnaround in one of our factory, Gwangyang factory. In addition to that, we have closed down the VIP Vacuum Insulation Panel business last quarter.
This was over 10 years old in the business that we internally developed the technology for high-performance insulation material business. We could not secure a way in our factory market, and we have not been able to turn around those business. We decide to close down this business and anticipated the loss related to closure of this business is approximately KRW 7 billion. This the first quarter outlook is while the lower demand anticipated and also the weak economy, we have been seeking the best effort for it to protect those from the margin and the spread between our the raw material and our end product pricing.
Hopefully, well, we can actually to keep as much as this, the spread so we can generate some decent margin in this first quarter. Go to page eight of the energy solution side. With the energy solution business, we have two separate business. One is local utility business in Korea, based in Samyang area of Korea, and another one is solar PV developing business in the United States. The bigger impact for this energy solution business is actually domestic part, because our utility business by the Samyang Energy, there were two type of revenue recognition. One is electric tariff sales plus renewable energy credit sales. Renewable energy credit sales went okay.
Our Electricity Tariff Sales business has been negatively impacted by government temporary measure that restricts the power generation company to acquire a certain level of SMP System Margin Pricing, which is the base price for electricity tariffs. Normally, last quarter and this quarter average, the electricity price in the wholesale market is approximately KRW 250 per K-W-H. Government came up with some one-year term restriction, some the order that power generation company can only recognize up to KRW 164 per K-W-H. That means the power, all power generation company in Korea have lost 1/3 of their revenue just overnight.
This act has been in place from December 1st of last year, up to November 30th of this year. Hopefully, we take a lift the restriction in this December. However, in the meantime, we anticipate that some our, some the margin from this power generation business will not be very good due to this unexpected market intervention. However, our the power generation business in the U.S. have gone quite smoothly, and we'll come back to you with some more updates, but, well, we would be able to complete some of our project development and hopefully we can announce certain sale of our project either this quarter or at least the next quarter. Page nine for urban development business side.
For this quarter, we have recorded KRW 133 billion of revenue with KRW 24 billion of operating income. This is in line with some of revenue and the profit recognition by existing sale of our apartment unit that we did in 2021. Based upon the progress, some the construction schedule, we have successfully and smoothly recognized all of the sales and the profits. However, last year, we want to go into the sale of new addition of 4,500 units of apartment sales that has been postponed last year. This year still we have not been able to achieving some the right permits for the sales activity.
Currently, we are in discussion with city development of Incheon for improving some of the soundproof system for the highway that are going through some our, the land. Once we settle with this, the noise control act, then we should be able to resume some our real estate development business. Once we have settled all of these required punch line item, then we will be able to resume this activity shortly. Once we do, we'll come back to you and we'll actually report you back about the progress. Page 10 is the financial position numbers.
Due to strong performance of the company in overall, there are not many actually noticeable things, but when you look at our inventory number or even improved. There are not many substantial things to report. Only related is for our increase in accounts and receivable. It's not because they were expected to list some overview numbers, it's actually our real estate business side recognition of AR for the sale of a presale existing, the advance the numbers. Since because of the progress revenue recognition, all of the presales in advance, the number is actually becoming our accounting receivable. This is more like an accounting issue, not actual real and substantial matters.
Going to page 11, I wanna show some of our financial ratio of the current company. For the past 16 years, we have stressed out that we will not seek just the growth. Growth important for the company. Without growth, I mean, company will not have any future. We strongly believe that the growth should be backed by sound financial structure. Every time when whether we came up with earning release, we always has been emphasizing on importance of having a sound financial position of the company. As you can see, our net debt to equity ratio, it was in 2020, it was 43%, which was not that high, but I mean, we were even able to lower it all the way to the 13% level.
The net debt to equity ratio is less than 0.5 times. In one of the most important management issue for the assets management is actually ROE number. For last year and this year, two years ago in 2002, 2022, we both were able to record over 20% ROE numbers. OCI are the company with very, very good sound financial position with over 20% operating margin, with above 20% ROE as under company. So far, I mean, our strategy has been well implemented. In the, in the future, we also look for just a lot of growth opportunity. However, in the meantime, we'll make sure that our financial position will stay sound.
That will be some commitment for the management. Let me go to the business update and strategy on page 13. PV value chain, as I mentioned earlier, last year, there are many things happen, especially the war between Russia and Ukraine that really sparked global energy crisis and also ongoing tension between U.S. and China that escalate many of those trading issues and the introduction of IRA that actually drove strong U.S., the market for PV market, and also now the Europe is coming up with some their own promotion program. That really helped the overall sound business environment for solar PV value chain.
Early this year in January, because of many companies' effort to lower their working capital and also inventory burden, so they suddenly stop actually procuring any of those upscale upstream, sort of, solar PV value chain product, especially polysilicon and the wafer. That actually exhausted quite substantial portion of the solar polysilicon and also wafer inventory in the market. Right after the Chinese New Year, the market has rebounded back, and we believe there are sound the demand for non-China based, solar PV value chain, going forward. We also see quite healthy growth in overall in the market. Page 14 is solar PV installation outlook. Early January, there was another unanticipated event, which was a flood in Northern California.
As you know, U.S. is a very important market, and California is the largest market for some solar PV installation. In late that last year and early this year, there has been quite severe flood in the Northern California that has negatively impacted on the installation market in general. In addition to that, there were nationwide influenced by strong snow storm from the Arctic. That actually limited certain some installation activity. It slowed down some of the demand for solar PV in early this January. In the meantime, there has been, like, some piles of many Chinese solar products on the U.S. harbor, and many of them were actually released by end of actually January.
That actually drove sudden increase in solar energy products in the U.S. market. That actually impacted first two months of this operation of the U.S. However, as the weather become normalized and as the market pretty much observe all of the sudden increase in the overdue Chinese product, the market become quite normalized. We believe strong, healthy growth in the U.S. market. As I mentioned earlier, demand for solar energy in non-China polysilicon that anticipated to increase due to this strong support by the U.S. IRA and Europe's introduction of the new Net-Zero Industry Act and also directed on the corporate sustainability due diligence process. These will continuously drive overall demand for non-Chinese solar PV products in general.
We believe that the stable growth in the demand for non-Chinese, the non-China based, the solar PV business, going forward this year. Also the market-wise, the first hot item for at this moment is a high-efficiency module made by the N-type wafer. N-type wafer is made by, it's mostly for high-purity polysilicon. That also help also the high-purity polysilicon producer like OCI and many non-Chinese, the makers become in the good advantage. This will help us to keep some of the premium on our new product. Going for page 15. This is a price index for many of the Petro Chemical products that substantially impacted by various activity, especially war between Russia and Ukraine and also inflation in many countries.
Because of the strong, the price hike in those upstream the market, however, downstream, the market has been negatively impacted by high interest rate and also the inflation, the issue in many, the global market. That actually drove the entire Petro Chemicals & the Carbon business in quite difficult position. 2022, the hour cheaper, the pitch rose and aluminum price stayed strong. However, because of the sudden slowdown in the global economy, we believe the demand will become much weaker. In the meantime, some overall demand will be high actually, some, and hard to predict. We will do our best to minimize this downturn risk, and hopefully we can keep certain level of our margin going forward.
The only good news is in 2023, strong recovery is anticipated after China canceled zero COVID policy. This will promote some more trade and investment and production activity in China. We will gradually monitor this impact, and next time we will try to make some updates when it's available. Page 15 is our investment program. In 2023, so in polysilicon, the solar-grade polysilicon, we have a two major important task. Operation of the 35,000 ton capacity that we have in Malaysia. This is obviously it's most important thing, and we have to make sure that we are in full production mode, and that will make us to minimize our production costs.
In the meantime, we are finally will launch our capacity expansion in Malaysia that the total capacity of 30,000 tons. This is actually the same capacity that we closed down in 2020 in our Gunsan factory. We will initiate some of the dismantle and to relocate these facilities into our Malaysia site, and we will go into three-phase installation some of the work going forward. We will complete our preparation this the first half of this year, and starting from second half, we will go into actual action program. The initial stage will take much longer because this will involve lot of dismantle and also the reassemble in Malaysia.
Our, the first additional capacity will be coming from stream, at best, in 2025, mid-2025, and remaining 20%, 20,000 ton capacity will be on stream after 2026. This will be our some, our, this year's the highlight for our some activity. Solar module side, we have been operating very small module factory in Texas, the capacity of 270 MW. I mean, because of our the collaboration work with other vendors, we have managed approximately 400 MW of the module sale so far. By first half of this year, we will increase our module capacity from 270 - 350 MW.
By end of this year, we will complete all our module capacity up to 1 GW. Starting from 2024, we will go into the market with approximately 1 GW of capacity, and this will be our new venture into the U.S., and everything is under control and on schedule at this moment. Solar PV project, as I mentioned earlier, we have in addition to have developed, successfully developed under the collaboration with our local partner, CPS Energy of San Antonio. We have secured a good project, and we have about to close our development phase. Because we do not have a U.S. tax position, it is most beneficial for us to sell this project to those who can enjoy the U.S. tax return basis.
We decide to sell additional 320 MW scale of solar PV project that are about to be deployed in the first half of this year. Some of them will be able to be announced either this quarter or at least next quarter. We'll be able to announce accordingly once it is confirmed. In the meantime, we are currently on schedule of developing additional 1 GW of solar the pipeline, and this will be another growth engine for OCI going forward. On page 17, in addition to our solar-grade polysilicon, we would like to strengthen our position as a semiconductor material supplier in semiconductor side.
We currently supply to top three out of top five global wafer companies, and we are currently about to sort our situation. We are going to make some two of expansion project. One is a 2,500 ton capacity expansion in Korea, existing Gunsan factory. This will be capitally timely investment. However, in order for us to keep better the price and the cost competitiveness, we will expand additional 10,000 ton of capacity, polysilicon capacity outside of Korea, most likely in Malaysia, going forward. This will be another very meaningful activity in 2023. Besides that, we are in many other area for, in semiconductor industry, including hydrofluoric acid and phosphoric acid and many others.
We will actually, yes, increase our capacity in order to respond for the increasing demand from our semiconductor customers. They are also strongly investing both in domestically and in the U.S., we will actually keep up with our the customers' investment phase. We will also enter into special etching business with using our the existing based competitiveness, and this will be another milestone for OCI going into high lucrative semiconductor material business. In terms of battery materials, we are already having in collaboration with our strategic partner, POSCO Chemical, which is the world-leading the anode and cathode manufacturers.
In second half of this year, we'll be completing our investment project, and we're going into commercial production of high-voltage business, which is about 15,000 ton capacity, high-voltage business. This will be very important milestone for at this moment, because currently this is 100% imported from our competing country. Once we having this 15,000 ton high-voltage availability, this will reinforce our domestic battery makers in a much better position. In addition to that, we would like also to use our strong inaudible-based chemistry capability into this anode business that will also produce high value added from the business opportunity. On page 18, we have not announced any of our future business outlook.
However, we have been requested by many investors on how does OCI look alike in five years. We have calculated and projected all of our growth project that I have mentioned so far. Without actually adding any other new business or any M&A activity, once we complete our ongoing expansion project, at least this will provide 100% sales growth in five years and 65% growth in some EBITDA numbers. As I mentioned earlier, we already are having over 20% EBITDA margin from the business. Maintaining 20% EBITDA is not an easy target considering our size and the nature of the business. However, as I mentioned earlier, our the company's goal is sustainable growth, the activity.
While we are making any of the growth activity, we will not sacrifice our profitability or any our financial position issues. This is our commitment. I can assure that this is a commitment from our tender management. In 2027, hopefully we can report it as high with the better results than this. On page 19, this is just update of our ongoing corporate restructuring activity. Last year, as you are aware that we have announced, for example, spin-off of the company, the structure that holding company and the new company. Approximately 70% will stay as a holding company, but the 30% of the most of chemical related business will go into the new company.
This new company will be listed as a separate company. Last week on January 27th, we have all the clearance by our, the Korea Stock Exchange that we have passed all of those screening tests. In March 7th, we'll announce or the notice for shareholders meeting. March 22nd, we'll have a shareholders meeting for approval for this spin-off. Once it is done, in May 1st, the company will be split it, and in May 29th, the both separate company will be separately listed and will be traded in separate on the Korea Stock Exchange. We will come back to you with any updates that we might have going forward. On page 20, this is just a briefing on our ESG activity.
In 2022, in Korean, ESG integrated, the KCGS, which is a Korea Institute of Corporate Governance and Sustainability, this is a non-government based agency. They rating all the Korean companies activity, and they have reviewed OCI, and they have granted for A grade for which is a high grade for for our ESG effort. Also 14 consecutive years, OCI has been selected as a thousands industry Korea starting this for 14 consecutive years that we are very proud of. On behalf of the management of OCI, we'll pay attention to it and we will do our best to comply with all those ESG related requirement and going forward. This is about the end of our, the earning release.
If you have any questions, we'll be more than happy to answer the questions.
As there are no further questions, we'll now end the Q&A session. For any additional inquiries, please contact our IR department.
Okay. Thank you.