REC Reports 1Q 2013 Results

Renewable Energy Corporation ASA (REC) reported first quarter 2013 revenues of NOK 1,278 million ($218.2 million) and EBITDA of NOK 46 million ($7.9 million). EBIT was negative NOK 159 million. REC’s cash position improved by NOK 0.1 billion to NOK 2.0 billion.

REC experienced improved demand for solar panels in the first quarter 2013 compared to the second half of 2012. The slowdown observed in the largest solar markets in Europe is being offset by growth in other markets, in particular in Asia. Despite the recent price stabilization, the global production capacity is still excessive throughout the solar value chain, and significant demand growth or supply reduction is required to improve pricing.

Sales and production volumes were reduced in the first quarter after temporary capacity shutdowns in both Silicon and Solar. REC’s selling prices for solar panels were down 4% from the previous quarter while average blended polysilicon prices declined 9%, mainly due to reduced prices and sales volume of electronic grade polysilicon. REC managed to reduce its solar panel cost further in the quarter, while FBR costs were negatively affected by high maintenance costs and the temporary shutdown of the Silicon I Siemens reactors.

REC’s first quarter revenues were down 24% from the previous quarter, while the NOK 46 million EBITDA was an improvement from negative NOK 37 million in the previous quarter. The fourth quarter 2012 revenues and EBITDA were impacted by positive items of NOK 80 million in REC Silicon, while in the first quarter 2013 other income of NOK 115 million from termination and settlement of parts of a silane gas contract was recognized. Loss after tax was NOK 209 million ($35.7 million), compared to a loss of NOK 2,170 million ($370.5 million) in the previous quarter.

“The market conditions continue to be demanding for the entire solar industry, although the prices have stabilized recently. REC continues to focus on improving our operations and on technology development in order to cut costs further, while reinforcing our market position globally. In the first quarter, our Solar organization has demonstrated its strength and adaptability by shifting sales away from stagnating European markets to high growth solar markets in Asia,” said Ole Enger, CEO and president of REC.