REC Silicon posts wider Q4 loss

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

February 14 (Renewables Now) - Norway-based polysilicon and silicon gas supplier REC Silicon ASA (STO:RECO) today posted a wider fourth-quarter net loss of USD 45.5 million (EUR 41.9m) as revenues shrank and the EBIT margin was deeply negative.

In the fourth quarter of 2019, REC Silicon saw its net loss expand to USD 45.5 million from USD 8 million a year before, which followed a drop in revenues from USD 48.9 million to USD 31.8 million and an EBIT margin of -44.5%. The company warned that the effects of the US-China solar trade war that is limiting access to markets in China, an overall market uncertainty and lower demand for solar-grade polysilicon are contributing to high liquidity risk.

REC Silicon produces polysilicon and silicon gases in Moses Lake, Washington, and in Butte, Montana. In May 2019 it shut down the fluidised bed reactor (FBR) polysilicon plant in Moses Lake because of the above-mentioned market conditions.

REC Silicon’s fourth-quarter loss before interest, tax, depreciation and amortisation (LBITDA) shrank to USD 3 million from USD 3.8 million. Although it narrowed, the result was impacted by lower average sales prices and sales volumes and increased power costs for the semiconductor materials factory in Montana.

The table below shows more details on REC Silicon’s financial performance in the two reporting periods:

Amounts in USD million Q4 2019 Q4 2018 2019 2018
Revenues 31.8 48.9 160.2 221.2
EBITDA (loss) (3) (3.8) (12.9) (4.9)
EBITDA margin in % (9.4) (7.7) (8) (2.2)
EBIT (loss) (14.1) (14.4) (82.6) (407.1)
Net profit (loss) (45.5) (8) (127) (341.6)
Total polysilicon production (tonnes) 281 1,664 3,109 9,280
Total polysilicon sales (tonnes) 643 1,690 5,892 7,784
Silicon gas sales (tonnes) 857 920 3,380 3,600

The Semiconductor Materials segment contributed USD 5.3 million to the company’s EBITDA in the fourth quarter, down from USD 11 million in the year-ago period. The Solar Materials division, meanwhile, ended the fourth quarter with an LBITDA of USD 3.8 million, narrowing from USD 9.1 million a year before thanks to lower costs after the shutdown of the Moses Lake site, where the company is now evaluating options for a restart, CEO Tore Torvund said. The company’s intention is to restart operations at the facility only when “significant positive developments in solar grade polysilicon markets occur.”

Looking ahead, REC Silicon expects to produce 280 tonnes of polysilicon in the first quarter of 2020 and 1,100 tonnes for the full 2020. Solar grade polyslicon is expected to be 100 tonnes and 390 tonnes, respectively.

(USD 1.0 = EUR 0.922)

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