REC Silicon operates 'far below' potential amid trade tensions
Rec Silicon Asa
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07:45 20/03/24
REC Silicon reported first quarter revenues of $45m, it announced on Thursday, compared to $48.9m in the fourth quarter of 2018.
The Norway-based company said EBITDA for the period was $4.7m, which included the impact of implementing IFRS 16 regarding leases, resulting in a $3.4m smaller EBITDA loss for the quarter.
It reported a cash balance of $25.4m as at 31 March, which was a decrease of $6.4m compared to 31 December.
Cash outflows from operations totalled $3.5m, which included interest of $0.7m associated with leases.
REC Silicon said cash outflows from financing activities consisted of $2.8m payments of lease liabilities.
Polysilicon sales volume for the quarter totalled 2,004 megatonnes, compared to 1,664 megatonnes in the prior quarter, while inventory decreased by 496 megatonnes.
Silicon gas sales volumes for the fourth quarter were 829 megatonnes, compared to guidance of 850 megatonnes.
Silane gas prices decreased by 3.3% compared to the fourth quarter 2018, while fourth quarter semiconductor polysilicon production was 285 megatonnes compared to guidance of 290 megatonnes.
The firm said the FBR facility in Moses Lake operated at around 25% throughout the first quarter.
FBR production was 1,091 megatonnes, compared to guidance of 1,180 megatonnes, and FBR production costs were $13.50 per kilogram compared to guidance of $12.80.
“First quarter results are far below our potential due to restricted access to Chinese markets,” said REC Silicon president and chief executive officer Tore Torvund.
“We are hopeful that REC Silicon's access to polysilicon markets in China will be restored and we can return to 100% capacity utilization in our FBR facility.”
The board said it had initiated a plan to curtail the operation of the FBR facility beginning on 15 May, to reduce spending and to maintain liquidity.
Unless access to polysilicon markets in China was restored, the facility would be placed in a long-term shutdown by 30 June.
The timing and length of the shutdown would be dependent on whether REC Silicon was able to regain access to Chinese markets for polysilicon as a result of trade negotiations between China and the United States, or other significant positive developments in solar grade polysilicon markets, the board explained.