REC Silicon EBITDA positive after better-than-expected Q4 sales

The Moses Lake polysilicon factory. Source: REC Silicon. License: All Rights Reserved.

Feb 16 (Renewables Now) - REC Silicon ASA (STO:RECO) said today its fourth-quarter (Q4) 2016 revenues jumped 58% quarter-on-quarter to USD 80.4 million (EUR 75.6m), as polysilicon sales exceeded expectations.

This led to the company registering positive earnings before interest, tax, depreciation and amortisation (EBITDA) of USD 4.9 million, versus a loss of USD 7.9 million in the prior quarter and of USD 29.6 million a year earlier.

The Norway-based company pointed out that, as expected, the solar markets started to recover following the deterioration in the third quarter that was due to the reduction of feed-in tariffs (FiT) in China. The firm sold 3,801 tonnes of polysilicon during the fourth quarter, as compared to 1,775 tonnes in the preceding three months.

CEO Tore Torvund commented that the company’s “efforts to decrease costs and better align FBR production with sales volumes have been successful in the fourth quarter”. The table below gives more details about Q4 and full-year financial performance.

(in USD million) Q4 2016 Q3 2016 Q4 2015 2016 2015
Revenues 80.4 50.9 74.9 271.2 329.9
EBITDA (Loss) 4.9 (7.9) (29.6) (30.8) (13)
EBIT (Loss) (30.5) (109.8) (211.6) (216) (298.8)
Profit (Loss) from continuing operations 34.6 (98.5) (111.9) (147.4) (62.8)
Polysilicon sales
(in million tonnes)
3,801 1,775 2,740 13,067 13,460

REC Silicon, whose main polysilicon production facilities are located in the US, expects its Yulin joint venture in China to begin production of FBR (Fluidised Bed Reactor) polysilicon in the second half of 2017.

In September, REC Silicon said it will not be able to make the agreed JV capital contributions until the solar trade war between the US and China is resolved. Today, it said it has successfully negotiated a deferral of the USD-15-million capital contribution until at least July 2017. The parties continue to discuss a potential deferral of the firm’s remaining USD-154-million contribution until after 2018.

(USD 1.0 = EUR 0.941)

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