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REC Silicon's loss expands in Q2

Ken Teegardin/CC BY-SA 2.0

July 23 (Renewables Now) - Norway-based polysilicon and silicon gas supplier REC Silicon ASA (STO:RECO) on Thursday reported a USD-9.6-million (EUR 8.2m) loss before interest, tax, depreciation and amortisation (LBITDA) for the second quarter of 2018, against a profit of USD 1.3 million a year earlier.

The company’s results were hurt by USD 340.4 million of impairment charges due to market disruptions following the reduction of solar subsidies in China and continued trade barriers that are limiting access to primary markets inside China, REC Silicon said. It closed the quarter with a net loss of USD 374.4 million, widening from USD 62 millions a year ago, on revenues of USD 58.9 million.

The following table shows more details about REC Silicon’s results in the second quarter and first half of 2018.

USD in million Q2 2018 Q2 2017 H1 2018 H1 2017
Revenues 58.9 61.4 128.6 118.9
EBITDA (loss) (9.6) 1.3 5.0 5.9
EDBITDA margin (in %) (16.3%) 2.1% 3.9% 5.0%
Profit (loss) (374.4) (62.0) (313.9) (79.2)

REC Silicon produces polysilicon and silicon gases for the solar and electronics industries in Moses Lake, Washington, and in Butte, Montana. Capacity utilisation at the facility in Moses Lake currently remains at just 25%, and will keep that level until the end of the trade war between China and the US or an improvement of market conditions.

"Despite having the most advanced polysilicon manufacturing technology; REC Silicon has no access to the largest market for polysilicon in China due to the 57% duty imposed by China. We need the United States and Chinese governments to cooperate in ending the solar trade dispute between the two countries to prevent additional job losses and to enhance the value of the solar industry in the United States and China," said REC Silicon’s president and CEO Tore Torvund.

Polysilicon production in the April-June quarter was 6.4% lower than the company’s forecast, falling to 2,491 tonnes from 3,057 a year back, due to the lower capacity utilisation. Meanwhile, polysilicon sales volumes marked a 28.5% drop sequentially to 2,077 tonnes.

The company's cash balance decreased over the three-month period by USD 69.6 million to USD 42.4 million, while net debt rose to USD 92.1 million at the end of June from USD 82.3 million at end-March.

(USD 1.0 = EUR 0.853)

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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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