Good afternoon. Thank you for joining Q3 2026 earnings call of OCI Holdings Company. I am Su Mi Lee, Chief Operating Officer of OCI Holdings Company. I will present our third quarter result and the performance of our key subsidiaries, followed by an update on the U.S. solar market and our shareholder return strategy. Let me begin with the consolidated financial performance on page five. In the third quarter of 2026, OCI Holdings recorded a consolidated revenue of 1.06 trillion KRW, and operating profit over 68 billion KRW. Revenue increased by 4% QoQ, while operating profit declined by 37%. The increase in revenue was primarily driven by higher sales volume at OCI TerraSus, as well as higher sales of semiconductor materials and carbon chemical products at OCI Company.
While operating performance improved across most of our major subsidiaries, consolidated operating profit declined due to the absence of solar project sale earnings recognized by OCI Energy in the previous quarter, as well as relatively lower profitability at OCI Company. Let me review the performance of each major subsidiary in later part. On page six, I will show the consolidated balance sheet. As of the end of third quarter, total assets stood at 8.1 trillion KRW, total liabilities at 3.5 trillion KRW, and total equity at 4.7 trillion KRW. Both total assets and total liabilities decreased QoQ, primarily reflecting foreign exchange movements during the period. The appreciation of the Korean won reduced the translated value of assets and liabilities held by our overseas subsidiaries. Our balance sheet remains solid. To our quarter end, the debt-to-equity ratio stood at 74%, while the net debt-to-equity ratio was 23.5%.
This financial position is supported by solid liquidity and disciplined financial management. Let's move on to the performance of our key subsidiaries. Page seven covers OCI TerraSus, our polysilicon business. OCI TerraSus delivered a meaningful recovery during this third quarter, with revenue increasing by 48% QoQ and the company returning to operating profitability. Sales volume increased by 45% compared with the previous quarter, driven primarily by higher spot sales to key customers. Average selling prices also improved slightly. Following the announcement of U.S. Section 232 measures in August, some customers resumed spot purchases as policy uncertainty began to ease. Nevertheless, customer purchasing activity remains cautious as the market awaits implementation details. With greater clarity emerging around the implementation of Section 232, which takes effect on December 4th, we believe both sales volume and ASPs should improve progressively.
NeoSilicon Technologies, our wafer manufacturing subsidiary, plans to begin production in the fourth quarter for a new customer under a long-term agreement, with shipments expected to commence in the first quarter of next year. Utilization rates are expected to ramp up gradually over time. Page eight shows the results for OCI Enterprises, our U.S. energy business. In the third quarter, revenue declined by 59% QoQ and the company recorded a modest operating loss. This was primarily due to the earnings recognized from the sale of a 500-megawatt solar project in the second quarter. At Mission Solar Energy, U.S. residential module sales rebounded from the previous quarter, supported by increased demand ahead of the implementation of Section 232 measures. In addition, module pricing across the U.S. market continues to trend higher.
In the fourth quarter, we expect the sale of a 250-megawatt project to be completed with related earnings recognized upon closing. Meanwhile, our owned and operated project pipeline continues to advance with key milestones such as PPA execution and EPC activities progress as planned. Page 9 covers OCI SE, which operates our cogeneration power plant in the Saemangeum Industrial Complex. In the third quarter, revenue increased by 14% QoQ, and OCI SE returned to operating profitability. The improvement was primarily driven by higher electricity prices, reflected in stronger SMP levels. Increased REC sales and higher steam sales volume also contributed positively to earnings. Looking ahead, we expect the business to maintain stable operation in the fourth quarter. The profitability is likely to decline substantially due to seasonally weaker electricity demand, lower SMP levels, and the impact of the scheduled major maintenance activities. Page 10 covers DCRE's urban development performance.
In the third quarter, revenue declined by 2% QoQ while operating profit increased by 92%. Revenue and earnings continued to be recognized steadily in line with the construction progress. The increase in operating profit was primarily attributable to the absence of one-time SG&A expenses recognized in the previous quarter. In the fourth quarter, revenue and operating profit are expected to continue being recognized based on construction progress. Next quarter, our year-end land valuation review is scheduled, and depending on the outcome, certain impairment charges could be recognized. Turning to OCI Company's performance on page 11. Third quarter revenue increased by 12% QoQ, while operating profit declined by 30%. The increase in revenue was driven by higher sales volume across semiconductor materials and carbon chemical products. Operating profit declined as chemical products spreads normalized from the elevated levels recorded in the previous quarter amid geopolitical disruptions.
Looking ahead to the fourth quarter, major maintenance activities are scheduled at both our basic chemicals and carbon chemicals facilities. As a result, we expect both revenue and operating profit to decline slightly on a sequential basis. At the same time, OCI Company continues to optimize its business portfolio while expanding its semiconductor materials business as a key long-term growth driver. Strategic initiatives include expanding long-term supply agreements with the leading semiconductor customers and selectively investing in future growth opportunities within the segment. Now, let me show our strategic response to Section 232. As announced in August, the U.S. government plans to implement Section 232 measures beginning in December. Key elements include a minimum import price for solar product, additional tariff on certain derivatives products, and incentives designed to support domestic manufacturing investment.
While implementation has not yet begun, we believe the MIP framework will help establish a more rational pricing environment by reducing the competitiveness of low-priced imports. We also believe the value of non-PFE supply chains will increase as policy requirements become more stringent. In response, we remain focused on three key priorities. First, while customers continue to take a cautious approach to purchasing ahead of implementation, we are working to expand the long-term customer agreements to enhance volume stability and improve demand visibility. Second, while the impact of policy changes on realized pricing has been limited so far, we continue to work closely with our customers to ensure that the market changes are appropriately reflected in contract pricing over time. Third, we expect investment in U.S. solar manufacturing to accelerate further. To meet potential growth in customer demand, we are preparing to expand our supply capacity.
At the same time, we will continue to monitor detailed guidance on PFE requirements and Section 232 and reflect relevant developments in our future expansion plans. Next, on page 14, I'd like to provide a brief update on NeoSilicon Technologies, another key long-term growth driver alongside OCI TerraSus. Following the completion of commissioning last quarter, we had expected the sales to U.S. cell customers to ramp up during the second half of this year. However, even after the announcement of Section 232 measures, market uncertainty has persisted, leading to a slower-than-expected recovery in customer demand and order placement. Despite these challenges, qualification activities with a key U.S. customer have advanced successfully through each stage, and both product quality and manufacturing yields remain stable. Based on these achievements, we plan to begin ramping up production from the fourth quarter.
Our existing production line will be modified to meet customers' specific requirements by the end of this year, while a new production line is scheduled to begin construction by the third quarter of next year to support volumes secured under our long-term agreements starting year 2028. Financing for this investment has already been secured. We currently expect a meaningful recovery in demand and revenue generation to begin in the first quarter of next year. Looking ahead, additional incentives for U.S.-made products and increasing localization of cell manufacturing in the U.S. are expected to support demand for non-PFE wafers. We remain confident in the long-term growth opportunity and are moving forward with our expansion plans. At the same time, we continue to focus on securing additional customers while preparing to fulfill our existing LTA commitments as scheduled. Let me show our performance in shareholder return on page 15.
Under our 2024 to 2026 shareholder return policy, we completed our target share buyback of 5% of total shares outstanding ahead of schedule in the first half of 2026. This quarter, we decided to cancel those repurchased shares. Going forward, we remain committed to delivering meaningful and sustainable shareholder returns. We intend to maintain a total shareholder return ratio of at least 50% of standalone net income and target an additional KRW 50 billion of share repurchases and cancellation through 2029. This concludes OCI Holdings Company's third quarter 2026 earnings presentation. Despite continued market uncertainty, we remain focused on strengthening our core businesses, maintaining financial discipline, and creating long-term value for our shareholders. We appreciate your continued interest and support, and we look forward to speaking with you again next quarter. Thank you for your attention. If you have any questions, please contact our IR team.