Sandvika, July 19, 2011: Renewable Energy Corporation ASA (REC) reported second quarter 2011 revenues of NOK 3,391 million and EBITDA of NOK 871 million. REC made improvements in operations, and current cost position is below the year-end target set for FBR polysilicon and in line with the target in Singapore. REC Silicon continued to deliver solid results with 55 percent EBITDA margin and FBR cash cost below USD 15 per kg. Strong capital discipline led to reduced net debt by NOK 0.6 billion to NOK 6.8 billion. Significant price decline in the quarter led to reduced revenues and impairment charges on fixed assets of NOK 6.5 billion, mainly in Norway.
Late clarification of the subsidy scheme in Italy and slow demand growth in Germany combined with continued strong supply growth, led to a very weak solar market in the second quarter. The market imbalance led to inventory build-up throughout the industry and strong price pressure.
REC revenues were down 17 percent from the first quarter 2010, mainly explained by steep decline in average selling prices for wafers and modules, partly offset by increased sales volumes of polysilicon. Average selling prices for wafers and modules were down 21 percent and 14 percent respectively, while polysilicon prices were down three percent from the previous quarter.
EBITDA was NOK 871 million in the second quarter, down from NOK 1,449 million in the previous quarter. The EBITDA was negatively affected by lower average selling prices and inventory write downs of NOK 115 million, partly offset by cost reductions across the value chain in the quarter.
The weak market led to the decision to temporarily shut down cell and wafer production in Norway in the third quarter. In addition to the announced shutdown of the cell plant in Narvik and the oldest wafer plants at Herøya, the multi wafer plant in Glomfjord will be temporarily shut down in the third quarter.
EBIT before impairment charges was NOK 202 million in the second quarter, compared to NOK 772 million in the previous quarter. REC has evaluated the book value of assets, and the steep price decline in the quarter led to impairment charges of NOK 6,461 million on fixed assets, mainly in Norway. EBIT was negative NOK 6,260 million in the second quarter.
Loss before tax of NOK 6,287 million in the first quarter, compared to a loss before tax of NOK 84 million in the previous quarter.
Basic EPS from continuing operations was NOK -6.70 in the second quarter, compared to NOK -0.11 in the previous quarter.
For more information, please see the attached second quarter 2011 report and spreadsheet with detailed financial information.
On the release day, President and CEO Ole Enger of REC will give a presentation together with other members of the management team. The presentation will take place at 08:00 hrs Norwegian time/CET at the conference centre Høyres Hus, Stortingsgaten 20, 0161 Oslo (www.hoyreshus.no).
The presentation, held in English, will be broadcasted live over the Internet, and can be accessed from: www.recgroup.com.
It will also be possible to listen to the presentation through a conference call. Please make sure to dial in 10 minutes prior to scheduled start time on one of the following numbers:
Confirmation code: 9741220
Norway Toll Free: 800 19 640
UK Toll Free: 0800 028 1243
USA Toll Free: 1888 935 4575
International Toll: +44 (0)20 7136 6283
REC will further host an analyst conference call with possibilities for questions and answers later the same day at 15:00 CET. Please make sure to dial in at least 5 minutes ahead of time to finalize your registration:
Norway free call: 800 80 119
International dial in: +47 2318 4501
Immediately after the call, a replay of the conference call will be made available. To access, please dial +47 2318 4502 and use the following procedure:
1. Type pincode 1524 followed by # (pound-sign)
2. Continue by typing reference number 524 followed by # (pound-sign)
For more information, please contact:
Mikkel Tørud, VP and Investor Relations Officer, Tel: +47 976 99 144
Peder Poulsson, Investor Relations analyst, Tel: +47 950 26 311
REC is a leading vertically integrated player in the solar energy industry. Ranked among the world's largest producers of polysilicon and wafers for solar applications and a rapidly growing manufacturer of solar cells and modules, REC also engages in project development activities in selected PV segments. Founded in Norway in 1996, REC is an international solar company, employing more than 3,900 people worldwide with revenues close to NOK 14 billion in 2010. Please visit www.recgroup.com to learn more about REC
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)
REC Q2 2011 report
REC Q2 2011 report