REC boosts revenue, cuts loss in third quarter

Share

Norway’s Renewable Energy Corporation (REC) reported third-quarter revenue of NOK 705 million ($119.2 million) while sustaining a NOK 220 million ($37.2 million) net loss.

The company’s results stem from continuing operations. REC’s revenue from total operations in the quarter, including the REC Solar division the company is selling off, reached NOK 1.6 billion ($272 million), while loss after tax from total operations reached NOK 1.58 billion ($268 million) compared to a loss of NOK 447 million ($75.8 million) in the previous quarter.

In September, REC shareholders approved a plan to split the company, paving the way for the sale of solar division REC Solar, which will be established as an independent listed company based in Singapore, and changing the name of the remaining division to REC Silicon, based in the U.S. state of Washington.

REC said its nominal net debt of NOK 2.6 billion ($440 million) would be reduced by NOK 800 million ($135 million) through the proceeds from the sale of REC Solar, to be completed on October 25.

The group’s REC Silicon division reported third quarter revenue of NOK 738 million, up from NOK 498 million ($84.5 million) in the previous quarter. Earnings before tax, interest, depreciation and amortization (EBITDA) dropped to NOK 80 million ($13.6 million) from NOK 106 million ($18 million) in the second quarter.

The company said strong sales volume growth for both polysilicon and silane gas was offset by price declines for both product categories in the third 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% compared to the previous quarter, the group reported. Polysilicon selling prices fell 3%, 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, it added. Silane gas sales increased by 73% while selling prices decreased by 18% compared to the previous quarter.

REC Solar reported third quarter revenues of NOK 917 million ($155.5 million), down from NOK 1.07 billion ($181.4 million) in the previous quarter, while EBITDA dropped from NOK 75 million ($12.7 million) to NOK 59 million ($10 million). The reduction mainly reflected lower shipments and selling prices, partly offset by continued cost reductions, REC said.

The group’s solar panel sales volume fell 8% compared to the previous quarter. Selling prices decreased by 5%, due mainly to currency effects and lower realized prices in Japan. REC Solar continues to hold a strong market position, in particular in Asia and Europe, the group added.

REC Solar increased solar panel production and continued reduction of cash cost based on operational improvements. Cash cost for producing solar panels in the third quarter was €0.49 per Watt.