Norway-based polysilicon and silicon gas supplier REC Silicon ASA (STO:RECO) has registered increased EBITDA for the second quarter of 2020 but saw its revenues decline amid falling sales of solar materials.
The company’s net loss in the three months came at USD 40.2 million (EUR 34.7m), widening from USD 37.8 million a year before, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased to USD 2.9 million from USD 500,000. This improvement came as a result of the higher sales volumes of silicon gases.
REC Silicon’s top line fell after revenues in the Solar Materials segment came mainly from sales of remaining granular polysilicon inventories, with the total falling to USD 31 million from USD 47 million a year ago. Activity on the global photovoltaic (PV) market in the reporting period was largely affected by the COVID-19 fallout, REC Solar said, pointing out at analyst’s estimates for excess polysilicon inventories and increased downward pressure on prices. The Norwegian firm’s Semiconductor Materials segment, meanwhile, enjoyed an upward trend in revenues to USD 30.7 million.
Second-quarter EBIT margin stood at a negative 103.6%, as compared to a negative 69.9% in the same period of 2019.
REC Silicon produces polysilicon and silicon gases in Moses Lake, Washington, and in Butte, Montana. In May 2019, however, 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. Its total polysilicon production volume in April-June decreased to 234 tonnes from 980 tonnes, with sales shrinking to 385 tonnes from 2,090 tonnes from the year-ago period.
The table below shows more details on REC Silicon’s financial performance.
| Amounts in USD million |
Q2 2020 |
Q2 2019 |
H1 2020 |
H1 2019 |
| Revenues |
31 |
47 |
55.7 |
92.1 |
| EBITDA (loss) |
2.9 |
0.5 |
4 |
(4.2) |
| EBITDA (loss) margin |
9.5% |
1% |
7.1% |
(4.6%) |
| EBIT (loss) |
(32.1) |
(32.9) |
(43.0) |
(51.4) |
| EBIT (loss) margin |
(103.6%) |
(69.9%) |
(77.2%) |
(55.8%) |
| Net profit (loss) |
(40.2) |
(37.8) |
(50.7) |
(61.3) |
| Total polysilicon production (tonnes) |
234 |
980 |
476 |
2,488 |
| Total polysilicon sales (tonnes) |
385 |
2,090 |
474 |
4,094 |
| Silicon gas sales (tonnes) |
831 |
834 |
1,562 |
1,663 |
“I’m pleased with the financial and operational results of our semiconductor business at the Butte plant despite the challenges caused by Covid-19,” said REC Silicon’s CEO Tore Torvund.
In view of the overall market disruption caused by the coronavirus pandemic, REC Silicon said the impact of the crisis is not “reasonably estimable” at this time. As a result, it has decided not to provide estimates of production volumes or silicon gas sales volumes for the third quarter and full 2020. It plans to keep its Moses Lake facility closed “until significant positive developments in solar grade polysilicon markets occur.” The company’s CEO, however, noted that he is optimistic about the market opportunities for the plant amid the COVID-19 relief plans and global decarbonisation trends.
(USD 1.0 = EUR 0.863)
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The Moses Lake polysilicon factory. Source: REC Silicon. License: All Rights Reserved.
