REC Fourth Quarter and Full Year 2011 Results

Renewable Energy Corporation ASA (REC) reported fourth quarter 2011 revenues of NOK 2,865 million and EBITDA of NOK 178 million. EBITDA was negatively affected by a weak solar market, aggressive polysilicon pricing and close down of production capacity in Norway. Affecting EBIT, REC recognized a further NOK 2.5 billion impairment on fixed assets of the Singapore operations in the quarter. REC reduced net debt by NOK 0.6 billion in the fourth quarter to NOK 4.7 billion.

After a steep price decline on solar modules, investments in PV systems are currently yielding favorable end-user returns in a number of markets. However overcapacity and inventory reductions led to steep market price declines throughout the fourth quarter. After a slow start, demand for solar modules improved at the very end of the fourth quarter.

REC’s fourth quarter revenues were down 5% from the previous quarter, while EBITDA was NOK 178 million in the fourth quarter, down from NOK 370 million in the previous quarter. The decrease in revenues and EBITDA is mainly explained by reduced selling prices partly offset by higher sales volumes. Compared to the previous quarter, REC’s average selling prices for polysilicon were down 42 percent, wafer prices were down 31 percent and module prices were down 15 percent.

In the fourth quarter REC recognized income of NOK 690 million from terminations of wafer sales contracts partly offset by costs of NOK 335 million related to permanent shutdown of the cell production and approximately 50 percent of the wafer production capacity in Norway.

For the year 2011 revenues amounted to NOK 13,366 million, down 3% from 2010. EBITDA in 2011 amounted to NOK 2,867 million, down from NOK 3,532 million in 2010.