REC reports losses from solar, silicon in Q1 2013

REC PV manufacturing in Singapore
REC improved margins in its solar division, despite declining revenues

Renewable Energy Corporation ASA (REC, Sandvika, Norway) has released first quarter 2013 results, reporting a 35% year-over-year decline in revenues to USD 216 million, a -12% operating margin and a loss of USD 35.3 million.

REC notes that solar photovoltaic (PV) demand improved in the first quarter of 2013 versus the second half of 2012, citing growing Asian demand. However, it states that sales and production volumes declined due to temporary capacity shutdowns in both silicon and solar.

“The market conditions continue to be demanding for the entire solar industry, although the prices have stabilized recently,” says REC CEO Ole Enger. “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.”

Decline in prices hitting bottom line

REC estimates that selling prices fell 4% for its PV modules during the quarter, with blended polysilicon prices falling 9%.

Over a year, the picture becomes more stark. Revenues fell 35% year-over-year in REC's solar division to USD 126 million, due to both a 5% fall in sales volume and a 28% decline in selling price from the first quarter of 2012.

However, REC has brought its PV production costs down to USD 0.71 per watt, and REC Solar's operating margin improved from -19% in the first quarter of 2012 to -10% in the first quarter of 2013.

Silicon division dips into the red

Likewise, revenues fell 37% year-over-year in REC's silicon division to USD 93.8 million. This was due to both a 2% fall in sales volume and a 36% decline in selling price.

REC also notes that its silicon results were negatively affected by high maintenance costs at its fluidized bed reactors and temporary shutdown of its Silicon 1 Siemens reactors. The division fell into the red during the quarter, with its operating margin falling from 18% to -11% year-over-year.

Limited outlook released

REC has released a limited outlook, citing ongoing uncertainties in the solar industry including the ongoing global solar trade war. The company plans to increase production to roughly 5,000 metric tons (MT) of polysilicon and roughly 195 MW of PV modules in the second quarter of 2013.

Over the full year 2013, REC plans to produce 20,000 MT of polysilicon, and 800 MW of PV modules.



2013-04-25 | Courtesy: REC | © Heindl Server GmbH

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