Thank you for joining Q1 2026 earnings call of OCI Holdings Company. I am Su Mi Lee, Chief Operating Officer of OCI Holdings. I will walk you through our key financial results and business updates. Let me begin with page five, which shows our consolidated results for the first quarter. In Q1, consolidated revenues amount to KRW 892 billion, while operating profit came in at KRW 11 billion. The outbreak of the U.S.-Iran conflict in March led to sharp increases in oil and raw materials prices, heightening external uncertainties. Against this backdrop, our major subsidiary, OCI Company, contributed positively to consolidated earnings with higher ASPs for key products driven by rising oil prices, resulting in earnings exceeding the plan. On the other hand, OCI TerraSus underwent scheduled maintenance during the quarter, and the associated impact led to a loss weighing on consolidated earnings.
Nevertheless, on a consolidated basis, OCI Holdings recorded a slight operating profit. Moving on to page six, let me show our consolidated financial position. As of the end of Q1 2026, total assets stood at KRW 8.2 trillion, liabilities at KRW 3.3 trillion, and equity at KRW 4.9 trillion. The key change versus the previous quarter reflects the consolidation effect from the completed acquisition of NeoSilicon Technology, a wafer business subsidiary under OCI TerraSus. With the initial ramp-up of NST, related working capital increased along with non-current assets. In addition, higher quarterly and exchange rates resulted in foreign exchange translation impacts on overseas assets and liabilities. The debt-to-equity ratio remained stable at 67%, while the net debt ratio rose to 20% compared with the previous quarter.
However, this increase was driven by temporary cash outflows related to CapEx execution and higher working capital associated with NST, rather than increased borrowing burden. Now, let me move to the performance review of major subsidiaries beginning on page seven. Page seven covers the performance of OCI TerraSus, which operates the polysilicon business. In Q1, revenues declined by 30% and operating profit turned to a loss. As guided in the previous quarter, scheduled shutdown maintenance was carried out during Q1, resulting in higher production costs and inventory valuation losses of approximately KRW 13 billion. In addition, delays in Section 232 investigation announcement for polysilicon led to continued market wait-and-see sentiment, reducing sales volumes versus the previous quarter and weighing on revenue. For Q2, production and sales are expected to be normalized. Following completion of maintenance, the plant is currently operating normally and costs are expected to stabilize.
While waiting for the outcome of a Section 232 investigation, OCI TerraSus plans to expand spot sales to new customers, targeting newly ramped-up capacities in non-ADCVD regulated regions alongside secured volumes under existing LTAs. For the wafer business, with the licensing procedures expected to be completed in this May, NST is targeting full-scale sales to U.S. cell manufacturers. Page eight covers the performance of OCI Enterprises, focusing on the U.S. energy business. In Q1, revenues increased by 121% QOQ, and operating profit returned to positive territory. The increase in revenues were primarily driven by higher module sales volumes and improved pricing at Mission Solar Energy, which operates the module business. In addition, receipt of remaining proceeds relating to the project sold last year by OCI Energy contributed to positive operating profit. In Q2, revenues and earnings contributions from the sale of a 500 MW project are expected to be recognized.
MSE is also expected to maintain the positive momentum seen in Q1 and to continue contributing to earnings. Page nine covers the performance of OCI SE cogeneration power plant. In Q1, revenue increased by 39% QOQ while operating losses were narrowed significantly. The improvement was driven by higher utilization rates, which supported increased utility sales volumes along with a modest rise in SMP power prices. However, certain maintenance activities continued during the quarter, reducing operating days and resulting in some losses. In Q2, performance is expected to be normalized. Recently, LNG prices have risen amid geopolitical developments with linked SMP also trending upward. While key raw material prices are also increasing, OCI SE plans to manage risk through stable procurement efforts, including supply chain diversification. Let me move on to page 10, which covers the performance of DCRE, urban developments business. In Q1, revenues increased by 21% while operating profit declined slightly.
Revenues decreased as progress rates rose across three complexes currently under revenue recognition. The decline in operating profit was mainly attributable to costs recognized related to the phase eight pre-sales conducted in last December. In Q2, preparations are underway for the complex nine pre-sales. In addition, DCRE is making ongoing efforts to drive land sales and leasing of commercial facilities. However, operating profit may decline due to costs related to landholding tax payments expected within the quarter. Page 11 covers the performance of OCI Company chemical and materials business. In Q1, revenue increased by 8% QoQ while operating profit rose significantly. Higher oil price during the quarter led to higher ASP for related products, increasing earnings contribution. In addition, operating performances are in the process of normalization as restructuring efforts, including impairment recognition and underperforming subsidiaries were completed. This trend is expected to continue in second quarter.
With elevated oil price likely to persist, spreads are expected to remain supported. In addition, rising prices for basic chemical products are expected to support improved performance in this business division. Now, let me move to page 13. U.S. solar policy continues to evolve and near-term uncertainty remains. However, from the IRA in year 2022 to the recently revised OBBBA in 2025, we believe this broader policy direction remains consistent. At its core, that direction is aimed at reducing concentration in the China-related supply chain, promoting supply chain diversification, and supporting reshoring of the solar value chain into the United States. In practice, measures such as the Uyghur Forced Labor Prevention Act and tariffs on circumvention imports have already driven supply chain shift outside China while investment in U.S. manufacturing continues to expand.
As is shown in the timeline below, when we look at both policy developments and demand trends beyond 2025, we believe dependence on Chinese supply chain is likely to continue declining, while the market environment for accelerating U.S. investment is becoming increasingly supportive. Importantly, when we consider recent large scale solar investment announced by U.S. corporates, with the growing reality of a power shortage driven by AI infrastructure expansion and rising focus on energy security, we believe the industry is moving on to a new phase. Page 14 covers how we view the business outlook and opportunities ahead. OCI sees expanding opportunities in the U.S. market, driven not only by policy, but increasingly by structural growth from rising power demand and infrastructure build-out. As AI adoption accelerates, power constraints are becoming more pronounced, leading to greater adoption of on-site solar power generation, energy storage, and power asset acquisitions.
In this context, silicon-based technology is extending beyond the traditional terrestrial and space solar energy applications into next generation semiconductor and data infrastructure. Reflecting these shifts, OCI is aligning its portfolio with the customer's next generation technologies and broader structural industry changes, including areas such as silicon photonics, while continuing to enhance capabilities to meet customer requirements. OCI TerraSus, NeoSilicon Technology, and OCI Energy are actively engaging with their partners and customers, exploring investments, supply agreements, and broader expansion strategies. Overall, OCI views this transition as a long-term structural growth opportunity and will continue to update the market as initiatives progress. Thank you for your attention. If you have any question, please contact our IR team.