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REC Silicon expects zero granular polysilicon production through 2019

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

July 25 (Renewables Now) - Norway-based REC Silicon ASA (OSE:REC) does not expect any further production of granular polysilicon at its Fluidised Bed Reactor (FBR) facility in Moses Lake, Washington, this year as the US-China trade dispute continues.

The company curtailed production at the particular site in mid-May and announced 100 job cuts there earlier this month because of the restricted access to Chinese polysilicon markets. During the second quarter of 2019, REC Silicon produced just 980 metric tonnes of polysilicon at the factory, both granular and Siemens solar grade as well as Semiconductor grade, compared with 2,478 tonnes a year earlier and 1,508 tonnes in the prior quarter.

As a result of the shutdown, the company has started depleting its granular polysilicon inventories, which declined by 1,059 tonnes to 1,435 tonnes at June 30, 2019. The remainder is expected to be sold in the second half of the year.

“We continue to be hopeful that negotiations between the United States and China result in the restoration of REC Silicon’s access to polysilicon markets in China and we can restart production in the FBR facility,” said president and CEO Tore Torvund.

From a financial point of view, the company posted a net loss of USD 37.8 million (EUR 33.9m) for the second quarter of 2019 compared with a loss of USD 374.4 million in April-June 2018, when its results were burdened by USD 340.4 million in impairment charges. Earnings before interest, tax, depreciation and amortisation (EBITDA) improved to USD 0.5 million in Q2 2019 from a loss of USD 9.6 million a year earlier.

More details are available in the table below.

Figures in USD million, unless otherwise noted Q2 2019 Q2 2018 H1 2019 H1 2018
Revenues 47 58.9 92.1 128.6
EBITDA (loss) 0.5 (9.6) (4.2) 5
EBITDA margin 1% -16.3% -4.6% 3.9%
EBIT (loss) (32.9) (370.1) (51.4) (375.7)
Net profit (loss) (37.8) (374.4) (61.3) (313.9)

(USD 1.0 = EUR 0.9)

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