REC Silicon ASA - Second quarter 2015 results

Fornebu, Norway - July 15, 2015: REC Silicon ASA (REC Silicon) reported second quarter revenues of USD 93.0 million, compared to USD 74.4 million in the previous quarter. The corresponding EBITDA during the second quarter was USD 5.8 million compared to USD 24.8 million in the previous quarter. The decrease in EBITDA can be attributed to lower sales prices.

Second quarter production remained strong with total polysilicon production of 5,071 MT. The company also realized improved FBR cash cost of $11.0/kg, compared to guidance of $11.5/kg.

Finished goods inventory increased by 1,248 MT, compared to 2,818 MT in the previous quarter. The inventory built in Q2 will be sold in Q3.

Silicon gas sales volumes in the second quarter were strong, at 989 MT, beating previous guidance of 700 MT. However, silicon gas prices declined in the second quarter by approximately 21% due to sales contracts that were entered into in order to regain market opportunities that were previously lost due to the West Coast port shut-down. Despite the silicon gas price decline in the second quarter, third quarter silicon gas prices are expected to rebound to first quarter levels.

The joint venture in China remains on track for start-up in 2017 and construction has begun in Yulin. However, in order to conserve cash, the expansion effort in Moses Lake, WA of Reactors 25 and 26 has been halted.  

REC Silicon also announced today a reduction of roughly half of its production capacity in Moses Lake, WA USA with the shut-down of the Silane III production unit for the remainder of 2015. This reduction in production capacity is the result of the significant effect on REC's ongoing ability to sell solar grade polysilicon in China due to the unresolved trade dispute between the United States and China.

Tore Torvund, REC Silicon's CEO said, "In spite of being the world's lowest cost producer of solar grade polysilicon, we are no longer able to access the Chinese market without a 57% duty. None of our global competitors outside of the US face this duty, so it is only adversely affecting the two US polysilicon producers that were previously accessing China. We have experienced very real consequences from this ongoing trade war, and it is hard to see that it will be resolved without mutual agreement from both the US and China. Regrettably, due to the effects of the trade dispute, in order to adapt to the present situation, we have decided to undertake roughly 50% reduction in the production capacity in Moses Lake for the rest of the year.  However, we can be ready to resume production if the trade dispute is resolved in the coming months."

The capacity reduction is expected to impact 2015 FBR production by 2,030 MT. REC Silicon intends to perform inspections of equipment and preventative maintenance on the Silane III unit during the time it is shut-down.

Second quarter 2015 report and presentation attatched.

Morning Program Thursday 16 July,
The company will give a presentation at 8:00 am CET at Høyres Hus Konferansesenter, Stortingsgaten 20, Oslo, Norway. The presentation will be in English.

A live webcast from the presentation can be accessed at www.recsilicon.com or the following link "Webcast REC Silicon Q2 2015 presentation".

It will also be possible to listen to the presentation through a conference call. Please make sure to dial in 5-10 minutes prior to scheduled start time on one of the following numbers:

Norway: +47 2350 0486
UK: +44 (0)20 3427 1900
USA:  +1 646 254 3360
Other international: +44 20 3427 1900
Please provide confirmation code 1177690 and state your name, company and country of residence.

Afternoon Program Thursday 16 July,
REC Silicon will host an analyst conference call at 3:00 p.m. CET. Please make sure to dial in at least 5-10 minutes ahead of time to complete your registration.

Norway: +47 2350 0486
UK: +44 (0) 20 3427 1900
USA:  +1 212 444 0481
Other international: +44 20 3427 1900
Please provide confirmation code 2693675 and state your name, company and country of residence.

For further information, please contact:
Chris Bowes, Investor Relations
REC Silicon ASA
Phone: +1 509 793 8127
Email: chris.bowes@recsilicon.com

Nils O. Kjerstad
IR Contact Europe
Phone: +47 9135 6659
Email: nils.kjerstad@crux.no

About REC Silicon
REC Silicon is a leading producer of advanced silicon materials, delivering high-purity polysilicon and silicon gas to the solar and electronics industries worldwide. We combine 25 years of experience and proprietary technology with the needs of our customers, and annual production capacity of more than 20,000 MT of polysilicon from our two US-based manufacturing plants. Listed on the Oslo Stock Exchange (ticker: REC), the company is headquartered in Moses Lake, Washington and employs approximately 720 people.

For more information, go to: www.recsilicon.com

This information is subject of the disclosure requirements acc. to §5-12 Vphl (Norwegian Securities Trading Act)

Q2 2015 PresentationQ2 2015 Report
Attachments:
Q2 2015 Presentation
Q2 2015 Report