REC ASA - 1st quarter 2006: Substantial organic growth

Oslo, May 24 2006: Renewable Energy Corporation ASA (REC) reported revenues of NOK 872 million in the first quarter 2006, an increase of 137 percent of the NOK 367 million reported for the first quarter 2005. Adjusted for acquisitions, the underlying growth was 35 percent.
 
Earnings before interest, taxes, deprecation and amortization (EBITDA) were NOK 380 million in the first quarter, compared with NOK 85 million in the first quarter 2005. The operating profit (EBIT) was NOK 298 million in the first quarter 2006, and the EBIT margin was 34 percent. This compares with an EBIT of NOK 53 million and an EBIT margin of 14 percent in the first quarter 2005.
 
Profit before tax and fair value/foreign exchange effect on convertible loans was NOK 243 million, compared with NOK 48 million in the first quarter 2005.
 
As in 2005, changes in the fair value assessment and foreign exchange of two convertible loans had significant, unrealized, non-cash accounting effects on the consolidated income statement in the first quarter 2006. This adverse accounting effect amounted to NOK 791 million in the first quarter 2006 (NOK 2 million), and the reported loss before tax was NOK 548 million (NOK 45 million).
 
The reported net loss after taxes was NOK 406 million in the first quarter 2006, compared with a profit after taxes of NOK 38 million in the first quarter 2005.
 
Excluding the fair value effect of the convertible loans, the net profit was estimated at NOK 163 million for the first quarter 2006.
 
The year-on-year growth in revenues can partially be explained by the acquisition of REC Advanced Silicon Materials LLC (ASiMI) in August 2005, and the acquisition of the smaller ingot producer REC SiTech AS in Norway in July 2005. In August 2005 REC also increased its shareholding in REC Solar Grade Silicon LLC (SGS) to 100 percent from 70 percent.
 
Excluding the acquisitions, overall revenues increased by 35 percent, which reflects higher production, increased capacity utilization, improved production yields and higher prices across all business units.
 
About REC
REC is uniquely positioned in the solar energy industry as the only company with a presence across the entire value chain. REC Silicon and REC Wafer are the world's largest producers of solar grade silicon and wafers for solar applications, while REC Solar produces solar cells and solar modules. REC Group had revenues in 2005 of 2.454 MNOK and an operating profit of 601 MNOK. Please see also www.recgroup.com
 
For more information, please contact;
Erik Thorsen, President & CEO, +47 67 81 52 60
Jon André Løkke, SVP & Investor Relation Officer, +47 67 81 52 65
 
***
This press release is issued pursuant to the requirements of Norwegian law and the Oslo Børs and is not intended to be an offer to sell the securities.  This press release may not be relied upon by any person to whom it was not intended to be provided. These materials are not an offer of securities for sale in the United States. No securities may be offered or sold in the United States absent registration or an exemption from registration. Any public offering of the securities to be made in the United States will be made by means of a prospectus.
 
 
Presentation 1st Quarter 2006:
1Q 2006 results
Attachments:
1Q 2006 results