Norway-based polysilicon and silicon gas supplier REC Silicon ASA (STO:RECO) reported positive EBITDA in the third quarter but saw its revenues drop as no contribution was made from its solar materials segment.
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 after the US-China solar trade war limited access to markets in China and demand for its solar-grade polysilicon fell. Polysilicon for the solar energy markets is produced in Moses Lake through the company’s solar materials segment.
REC Silicon’s earnings before interest, tax, depreciation and amortisation (EBITDA) came at USD 17.9 million (EUR 15.1m), as compared to a loss of USD 5.6 million a year earlier, its financial report shows. The improvement was registered due to a USD-16-million non-cash adjustment related to a property tax settlement. Excluding this effect, EBITDA amounted to USD 1.9 million, which was a lower result in quarterly terms, mainly attributed to decreased sales and production volumes of silicon gases.
The Norwegian firm closed the July-September quarter with a net profit of USD 30.7 million after losing USD 20.2 million a year ago. EBIT margin was 9.4% versus a negative 17.1% in the third quarter of 2019. Revenues, meanwhile, declined to USD 30.3 million as the solar materials segment did not bring any revenues.
Total polysilicon production volume in July-September amounted to 237 tonnes, contracting from 340 tonnes a year back. Sales more than halved, falling from 1,155 tonnes to 401 tonnes.
The table below shows more details on REC Silicon’s financial performance.
| Amounts in USD million |
Q3 2020 |
Q3 2019 |
9mo 2020 |
9mo 2019 |
| Revenues |
30.3 |
36.4 |
86.0 |
128.4 |
| EBITDA (loss) |
17.9 |
(5.6) |
21.9 |
(9.9) |
| EBITDA (loss) margin |
59.1% |
(15.5%) |
25.5% |
(7.7%) |
| EBIT (loss) |
9.4 |
(17.1) |
(33.6) |
(68.5) |
| EBIT (loss) margin |
31.1% |
(47.1%) |
(39.0%) |
(53.3%) |
| Net profit (loss) |
30.7 |
(20.2) |
(20.1) |
(81.5) |
| Total polysilicon production (tonnes) |
237 |
340 |
714 |
2,828 |
| Total polysilicon sales (tonnes) |
401 |
1,155 |
874 |
5,249 |
| Silicon gas sales (tonnes) |
746 |
860 |
2,308 |
2,523 |
REC Silicon explained that its sales opportunities in the semiconductor grade polysilicon markets were limited by decreased demand and excess inventory levels following the COVID-19 fallout. On a positive note, it added that demand for silicon wafers continued to grow and the overall demand for solar is on the rise globally, in spite of the pandemic.
“Once again, the Company has reported consistent financial results for the third quarter. Butte operations continue to display resilience despite challenges caused by Covid-19,” said CEO Tore Torvund. He noted that the company has agreed to tie up with Violet Power to develop a non-Chinese solar value chain, while a partnership with Group 14 Technologies will see the creation of a silicon anode battery materials production facility in Moses Lake.
In view of the overall uncertainty and weak economic activity brought by COVID-19, REC Silicon said it will not provide estimates for production volumes or silicon gas sales volumes for the fourth quarter and the full 2020.
(USD 1.0 = EUR 0.845)
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The Moses Lake polysilicon factory. Source: REC Silicon. License: All Rights Reserved.
