REC decreased revenues yoy and plans temporary shutdown of US facility in Moses Lake

Moses Lake, Washington silicon factory

Norwegian REC Silicon ASA reported revenues of $221.2 million in 2018 compared to $272.4 million in 2017. This includes revenues of $69.2 million in 2018 for solar materials (2017: $127.8 million). Regarding the fourth quarter 2018 revenues decreased to $48.9 million, compared to $78 million in the fourth quarter 2017 (including solar materials $9.9 million in Q4 2018; $37.1 million in Q4 2017).
The corresponding EBITDA in 2018 was a loss of $4.9 million compared to profit of $19.8 million in 2017. Overall, the company announced loss of $341.6 million in the year 2018 compared to loss of $350.6 million in 2017.
REC’s polysilicon sales volume in 2018 was 7,784 MT (2017: 13,503 MT). Production volume was 9,280 MT (2017: 11,636 MT). Silicon gas sales volumes increased to 3,600 MT in 2018 from 3,501 MT in the previous year. REC Silicon produces polysilicon and silicon gases for the solar and electronics industries at plants in Moses Lake, Washington and in Butte, Montana. The Moses Lake plant is the world’s largest producer of granular polysilicon with approximately 18,000 MT of polysilicon production capacity. However, production volumes continue to include the Fluidized Bed Reactor (FBR) production capacity utilization rates of approximate 25 percent due to the continued solar trade war between China and the United States.
According to REC Silicon, under current market conditions, the company will not be able to continue operating the FBR facility at 25 percent production capacity utilization and maintain sufficient liquidity to meet the operating cash flow requirements of the company’s operation. The Board of Directors will consider a 2-month curtailment of production at the facility in Moses Lake near March 1, 2019 to reduce FBR inventories. At that time, REC Silicon will consider whether trade negotiations between the United States and China are likely to result in REC regaining access to the China market for solar grade polysilicon and the overall outlook for the polysilicon market. A decision to temporarily shutdown the production at Moses Lake will not result in a workforce reduction. Customer demand will be met through the sale of REC Silicon's existing inventories.
REC Silicon targets polysilicon production of 1,630 MT during the first quarter of 2019 and 6,630 MT for the full year 2019. Polysilicon production rates continue to include the operation of the FBR facility in Moses Lake at only 25 percent. Silicon gas sales volumes are targeted at 850 MT for the first quarter of 2019 and 3,840 MT for the full year 2019. This estimate reflects the impacts of current trade restrictions and uncertainty in the PV sector. The effects of any additional trade sanctions could impact demand for silicon gases, says the company.

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