Tax expense hurts REC Silicon's Q4

Ken Teegardin/CC BY-SA 2.0

February 12 (Renewables Now) - Polysilicon producer REC Silicon ASA (STO:RECO) on Friday reported an after-tax loss of USD 153.1 million (EUR 124.9m) for the fourth quarter of 2017, against a USD-34.6-million profit a year earlier.

The loss includes tax expense of USD 145.8 million due to a write-down of deferred tax assets, which is a result of recurring net operating losses in the US.

USD in million	Q4 2017	Q4 2016	2017	2016
Revenues	78	80.4	272.4	271.2
EBITDA	10.3	4.9	19.8	(30.8)
EBITDA margin (in %)	13.2	6.1	7.3	(11.3)
Profit (loss)	(153.1)	34.6	(367)	(147.4)

Quarter-on-quarter revenues rose 3.4% thanks to an increase in the average sales prices for prime grade solar polysilicon and higher silicon gas sales volumes. Polysilicon sales volumes were down 3.6% to 3,943 tonnes, which was attributed to lower available inventory due to high sales volumes during the third quarter.

REC Silicon's facility in Moses Lake, Washington remains at reduced capacity due to the trade war between China and the US, the company said. In January, REC Silicon called on the US government to pursue negotiations with China as soon as possible after it was announced that the US Trade Representative will engage in discussions aimed at a “positive resolution” of the anti-dumping and anti-subsidy duty measures currently imposed on Chinese solar products coming to the US and on US polysilicon imports to China. “The goal of those discussions must be fair and sustainable trade throughout the whole solar energy value chain [..]” that statement said.

The company's cash balance improved over the three-month period by USD 16.6 million to USD 104.5 million and chief executive Tore Torvund said that REC Silicon is well placed to address its 2018 debt obligations. This is in part thanks to the recent agreement regarding the Yulin joint venture (JV) in China. Under the deal, Shaanxi NonFerrous Tian Hong New Energy Co Ltd (SNF) will pay REC Silicon's outstanding capital contribution of USD 169 million to the JV, with the companies' stakes to be adjusted to 85% and 15%, respectively.

The JV started production in December 2017 and is expected to reach designed output levels by the end of the year.

(USD 1 = EUR 0.816)