Norwegian REC EBITDA seen to jump in Q2 2011

Jul 18, 2011 - Norwegian solar power company Renewable Energy Corporation (OSL:REC) is expected to more than double on the year its earnings before interest, tax, depreciation and amortisation (EBITDA) to NOK 1.032 billion (USD 184.7m/EUR 131.2m) in the second quarter of 2011.

In the same period of 2010, the item stood at NOK 455 million.

The second-quarter EBITDA estimates of 13 analysts, polled by SIX Estimates, ranged from NOK 809 million to NOK 1.189 billion with a median of NOK 1.040 billion.

Sales are seen to jump to NOK 3.434 billion from NOK 2.758 billion.

However, REC pretax profit is projected to plunge to NOK 185 million from NOK 866 million a year earlier. The company is expected to write-down inventories at the end of the second quarter of 2011 to reflect the recent price declines in wafers and modules.

Since May 24, when REC announced plans to cut production of wafers, cells and modules as of July 1, its stock has lost some 45%.

The average share price target, provided by the analysts, is NOK 14.30. Seven analysts have a "buy" rating on the stock, three have a "neutral" and three have a "sell" recommendation.

REC is due to release its interim results on July 19.

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