Renewable Energy Corporation ASA increases revenues but also EBIT-loss

Sandvika, Norway - Renewable Energy Corporation ASA (REC) reported third quarter 2013 revenues from continuing operations of NOK 705 million and EBITDA of NOK 36 million.

Nominal net debt was NOK 2.6 billion, while net debt will be reduced by NOK 800 million through the proceeds from the sale of REC Solar to be completed on October 25, 2013. Reported revenues and EBITDA are re-presented for REC Solar as discontinued operations.

REC Silicon reported third quarter revenues of NOK 738 million up from NOK 498 million in the previous quarter. EBITDA in the third quarter was NOK 80 million down from NOK 106 million in the previous quarter. The second quarter EBITDA was positively affected by reversal of expenses recognized in the first quarter, and hence the underlying third quarter EBITDA was broadly unchanged from the previous quarter. Strong sales volume growth for both polysilicon and silane gas was offset by price declines for both product categories in the quarter. Despite the introduction of preliminary anti-dumping duties on solar grade polysilicon in China, strong demand for granular polysilicon led to an increase in polysilicon sales volume of 56 percent compared to the previous quarter. Polysilicon selling prices came down three percent reflecting reduced prices for electronic grade polysilicon and a larger share of solar grade polysilicon in the sales mix partly offset by increased prices for solar grade polysilicon. Silane gas sales increased by 73 percent while the selling prices decreased by 18 percent, compared to the previous quarter. Silane gas prices decreased due to deliveries under some large contracts at low prices. Some industry rationalization has begun and REC Silicon increased its silane gas market share in the quarter.

REC Solar reported third quarter revenues of NOK 917 million down from NOK 1,070 million in the previous quarter. EBITDA in the third quarter was NOK 59 million down from NOK 75 million in the previous quarter. The reduction from the previous quarter mainly reflects lower shipments and selling prices, partly offset by continued cost reductions. Solar panel sales volume was down eight percent compared to the previous quarter as panel inventory was slightly below the normalized level in the previous quarter. Selling prices decreased by five percent mainly reflecting currency effects and lower realized prices in Japan. REC Solar continues to hold a strong market position, in particular in Asia and Europe. REC Solar increased solar panel production and continued reduction of cash cost based on operational improvements. Cash cost for producing solar panels was in the third quarter 49 Eurocents/Watt. Financial items for continuing operations were negative NOK 155 million, mainly reflecting interest expenses and fair value adjustments of the convertible bonds. Loss after tax from total operations was NOK 1,578 million in the third quarter, compared to a loss of NOK 447 million in the previous quarter. The increased loss mainly reflect the impairments on Group level of REC Solar, as the segment is accounted for as held for sale at the end of the third quarter.

Source: IWR Online, 24 Oct 2013