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REC Silicon Publishes 2nd 2018 results: Revenues Down 15 Percent, EBITDA Turns Red

Fornebu, Norway - REC Silicon ASA reported second quarter 2018 revenues of USD 58.9 million, down from USD 69.6 million in the previous quarter. The corresponding EBITDA during the second quarter was a loss of USD 9.6 million compared to a positive USD 14.6 million in the previous quarter. Polysilicon sales volume for the quarter was 2,077 MT, a 28.5 percent decrease from the first quarter, while inventory increased by 401 MT.

REC Silicon reported a cash balance of USD 42.4 million on June 30, 2018. This represents a decrease of USD 69.6 million compared to March 31, 2018. The company refinanced its outstanding debt during the quarter with a net repayment of USD 59.5 million. Cash outflows from operations was USD 7.1 million for the quarter.

Silicon gas sales volumes for the second quarter were 918 MT, an increase of 2.4 percent compared to the first quarter. Prices were 2.1 percent higher than first quarter. Second quarter semiconductor polysilicon production was 267 MT, in line with guidance of 270 MT.

FBR capacity utilization was decreased to approximately 25 percent in early June resulting in cash costs of USD 13.4/kg, compared to USD 9.40/kg in the first quarter. FBR production was 2,078 MT, a 1,049MT decrease compared to the first quarter.

The Yulin JV plant continued to operate at reduced capacity utilization during the second quarter. The plant produced approximately 1,000 MT of granular polysilicon during the quarter. Year-to-date, the plant has produced a total of 1,800 MT compared to a target of 8,000 MT for 2018.

REC Silicon reported impairment charges of USD 340.4 million due to the market disruption from the curtailment of solar incentives in China, as well as continued trade barriers that prevent access to primary markets inside China. As previously announced on July 1, 2018, REC Silicon reduced its Moses Lake workforce by approximately 30 percent.

President and CEO, Tore Torvund, said, "Although our semiconductor and silane gas business in Butte remains strong, it is regrettable that we had to reduce our headcount by 85 highly-skilled employees. Despite having the most advanced polysilicon manufacturing technology; REC Silicon has no access to the largest market for polysilicon in China due to the 57 percent duty imposed by China. We need the United States and Chinese governments to cooperate in ending the solar trade dispute between the two countries to prevent additional job losses and to enhance the value of the solar industry in the United States and China."

Source: IWR Online, 19 Jul 2018