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REC Silicon posts negative EBITDA in Q3 2018

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REC Silicon posts negative EBITDA in Q3 2018


October 29 (Solar) – Norway-based polysilicon and silicon gas supplier REC Silicon ASA (STO:RECO) last week reported a USD-6.1-million (EUR 5.4m) loss before interest, tax, depreciation and amortisation (LBITDA) for the third quarter of 2018, against a profit of USD 3.6 million a year earlier.

The result is still an improvement from the previous quarter when the company recorded an LBITDA of USD 9.6 million. REC Silicon explained that the loss came due to a decrease in both solar grade polysilicon volumes and sales prices, higher fluidised bed reactor (FBR) cash production costs and inventory write-downs. Those were partly offset by cost cutting measures, among which is the company’s decision to let go about 100 employees in Moses Lake, Washington, following the effects of the US-China solar trade dispute.

REC Silicon, which also has manufacturing facilities in Butte, Montana, closed the third quarter with a net loss of USD 19.6 million, narrowing from USD 120.8 million a year back. Revenues totalled USD 43.7 million, falling from USD 75.5 million due to the lower sales volumes and lower prices for solar grade polysilicon, following the reduction of solar subsidies in China.

Cash outflows from operations stood at USD 1.7 million.

The table below shows more details on REC Silicon’s performance and sales.

Results (currency is USD) Q3 2018 Q3 2017
Polysilicon production 1,615 2,835
Polysilicon sales 1,113 4,091
Silicon gas sales 856 904
Revenues 43.7m 75.5m
EBITDA (loss) (6.1m) 3.6m
EBIT (loss) (16.9m) (82.2m)
Profit (loss)  (19.6m) (120.8m)

Polysilicon production in the July-September quarter was in line with expectations and the reduced capacity of the Moses Lake facility.

Looking ahead, REC Silicon expects to produce 1,660 tonnes of polysilicon in the fourth quarter and 7,565 tonnes for the whole of 2018. It said it will continue to operate its Moses Lake factory at only 25% of its capacity and will return to full capacity only when the solar trade dispute with China comes to an end or when the market allows it.

(USD 1.0 = EUR 0.878)


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