Fornebu, Norway – July 25, 2019: REC Silicon ASA (REC Silicon) reported second quarter 2019 revenues of USD 47.0 million. EBITDA for the second quarter of 2019 was USD 0.5 million compared to an EBITDA loss of USD 4.7 million in the first quarter of 2019. The increase in EBITDA was primarily due to lower electricity costs for the semiconductor materials manufacturing facility in Butte, Montana.
REC Silicon reported a cash balance of USD 38.4 million on June 30, 2019. This represents an increase of USD 13.0 million compared to the cash balance on March 31, 2019. Cash outflows from operations was USD 4.0 million for the quarter which included interest of USD 7.6 million and payments of USD 3.1 million associated with the agreement to resolve REC Silicon’s obligation to make additional equity contributions to the Yulin JV. In addition, the Company received a USD 2.7 million refund of taxes in the United States and is reporting a reduction of USD 3.2 million in net working capital invested. Cash inflows from financing activities were USD 17.1 which consisted of USD 19.1 million from the private placement of equity which was settled on May 14, 2019 offset by USD 1.9 million payments of lease liabilities.
Polysilicon sales volume for the quarter was 2,090 MT compared to 2,004 MT in the prior quarter, while inventory decreased by 1,110 MT.
Production in the FBR facility in Moses Lake, Washington was shuttered on May 15, 2019 due to restricted access to Chinese polysilicon markets. As a result, FBR production was 980MT during the quarter and FBR production costs were USD 18.5/kg. The Company expects production in the FBR facility in Moses Lake will be zero during the third and the fourth quarters of 2019. Inventories of finished granular polysilicon declined by 1,059MT during the quarter resulting in remaining inventories of 1,435MT at June 30, 2019 which is expected to be sold during the second half of 2019.
Silicon gas sales volumes for the second quarter were 834 MT compared to guidance of 960 MT. Silane gas prices increased by 3.0 percent compared to the first quarter 2019 due to lower sales volumes into PV applications resulting in a lower overall average price. Second quarter semiconductor polysilicon production was 216 MT compared to guidance of 220 MT.
President and CEO Tore Torvund said, “Unfortunately, we have been forced to shut-down the FBR facility due to restricted access to Chinese markets. We continue to be hopeful that negotiations between the United States and China result in the restoration of REC Silicon’s access to polysilicon markets in China and we can restart production in the FBR facility.”
On July 15, 2019 the Company announced a work force reduction at its Moses Lake, Washington production facility to reduce spending and to maintain liquidity. The facility will not be restarted until access to polysilicon markets in China is restored or other significant positive developments in solar grade polysilicon markets occurs.
For more information, please see the attached first quarter 2019 report and presentation.
A presentation of the results will be held at 08:00 a.m. CEST at Hotel Continental, Stortingsgata 24/26, Oslo, Norway. The presentation will be in English.
A live webcast from the presentation can be accessed at www.recsilicon.com or with the following link:
It will also be possible to listen to the presentation through a conference call. To join this event, use one of the following access numbers. Please make sure to dial in 5-10 minutes prior to the scheduled start time.
Norway Dial-in (Tollfree/Freephone): 800 17 945
Norway, Oslo (Dial-in Local): +47 2350 0296
United Kingdom (Dial-in Tollfree/Freephone): 0800 279 7204
United Kingdom (Dial-in Local): +44 (0) 330 336 9411
United States (Dial-in Local): +1 929 477 0324
United States/Canada (Dial-in Tollfree/Freephone): 800 458 4121
Other international: +44 (0) 330 336 9411
Participant Passcode: 6387499
For further information, please contact:
James A. May II, Chief Financial Officer
Phone: +1 509 989 1023
Nils O. Kjerstad
Phone: +47 9135 6659
About REC Silicon
REC Silicon is a leading producer of advanced silicon materials, delivering high-purity polysilicon and silicon gas to the solar and electronics industries worldwide. We combine over 30 years of experience and proprietary technology with the needs of our customers, with annual production capacity of more than 20,000 MT of polysilicon from our two US-based manufacturing plants. Listed on the Oslo Stock Exchange (REC.OL), the Company is headquartered in Fornebu, Norway.