Norwegian REC hurt by weak market in Q2 2011

Jul 20, 2011 - Norwegian solar power company Renewable Energy Corporation (OSL:REC) blamed the difficult international solar market for its unsatisfactory performance in the second quarter of 2011.

A late clarification of the subsidy scheme in Italy and slow demand growth in Germany, together with continued strong supply growth resulted in a weak market in the second quarter, the group said in its interim report on Tuesday.

Although demand is growing in a number of emerging markets, this has not offset lower growth in the main markets in Europe. The market imbalance led to inventory build-up across the value chain and strong price pressure.

REC swung to a pretax loss from continuing operations of NOK 6.287 billion (USD 1.138bn/EUR 803.6m) in the second quarter of 2011, on the back of NOK-6.461-billion write-downs. In the second quarter of 2010, REC posted a pretax profit from continuing operations of NOK 866 million. However, REC expects market conditions to improve in the second half of 2011.

(NOK 1.0 = USD 0.181/EUR 0.128)

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