REC Silicon records positive trends in Q4 2018

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

February 12 (Renewables Now) - Norway-based polysilicon and silicon gas supplier REC Silicon ASA (STO:RECO) narrowed to USD 3.8 million (EUR 4.3m) its loss before interest, tax, depreciation and amortisation (LBITDA) for the fourth quarter of 2018, mainly thanks to improved sales of polysilicon and silicon gases.

The result compares to positive earnings of USD 4.9 million in the year-ago period but is still an improvement from the LBITDA of USD 6.1 million in the third quarter of 2018. In a press release on Tuesday, the company explained that the loss is a result of the “challenging market conditions” for solar grade polysilicon and the effects of the US-China solar trade war limiting access to markets in China. The last three months of the year, however, benefitted from lower spending levels in the solar materials segment and increased sales of silicon gases in the semiconductor materials division, as well as a drop in inventories.

REC Silicon produces polysilicon and silicon gases in Moses Lake, Washington, and in Butte, Montana. In the October-December quarter, it saw sales in the solar materials segment jump by 60.6% in sequential terms to USD 9.9 million due to the polysilicon sales volumes, while those in the semiconductor materials unit rose to USD 39 million from USD 37.6 million. Total revenues for the quarter improved from USD 43.7 million in the third quarter to USD 48.9 million but declined in annual terms.

REC Silicon closed the last quarter of 2018 with a net loss of USD 8 million, narrowing its deficit from USD 150.6 million a year earlier. Its cash balance at end-2018 amounted to USD 31.8 million, with fourth-quarter cash outflows from operations totalling USD 8.7 million.

The table below shows more details on REC Silicon’s performance:

Amounts in USD Q4 2018 Q4 2017 2018 2017
Total polysilicon production (tonnes) 1,664 2,616 9,280 11,636
Total polysilicon sales (tonnes) 1,690 3,943 7,784 13,503
Silicon gas sales (tonnes) 920 969 3,600 3,501
Revenues 48.9m 78m 221.2m 272.4m
EBITDA (loss) (3.8m) 10.3m (4.9m) 19.8m
EBIT (loss) (14.4m) (10.3m) (407.1m) (127.5m)
Net profit (loss) (8m) (150.6m) (341.6m) (350.6m)

Polysilicon production in the solar materials segment in October-December rose to 1,270 tonnes from 658 tonnes in the previous quarter but are lower as compared to the 3,426 tonnes produced a year before.

REC Silicon intends to continue to operate its Moses Lake factory at only 25% of its capacity and will consider a two-month production curtailment at the factory to reduce existing inventories. The move will not lead to a reduction in the workforce there, the company pointed out.

In terms of production, REC Silicon guided for polysilicon production of 1,630 tonnes for the first quarter of 2019 and 6,630 tonnes for the full 2019. Silicon gas sales volumes, meanwhile, are seen at 850 tonnes and 3,840 tonnes for the first quarter and full year.

(USD 1.0 = EUR 1.141)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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