Sandvika, October 26, 2011: Renewable Energy Corporation ASA (REC) reported third quarter 2011 revenues of NOK 3,001 million and EBITDA of NOK 370 million. The operating result was negatively affected by a weak solar market and curtailment of parts of the production capacity in Norway. REC generated NOK 1 billion in net cash from operations and net debt was reduced by NOK 1.5 billion in the third quarter to NOK 5.3 billion.
As a consequence of reduced prices on solar modules and other components, investments in PV systems are currently yielding favorable end-user returns in a number of markets. However macroeconomic uncertainties and reduced availability of financing have limited demand growth and industry overcapacity has led to further price pressure throughout the solar value chain in the third quarter.
REC's third quarter revenues were down 12 percent from the previous quarter, while EBITDA was NOK 370 million in the third quarter, down from NOK 871 million in the previous quarter. The decrease in revenues and EBITDA is mainly explained by reduced selling prices and lower sales volumes. Compared to the previous quarter, average selling prices for polysilicon were down eight percent, wafer prices were down 17 percent and module prices were down 13 percent.
On October 25, the REC Board decided to permanently shut down the oldest wafer plants at Herøya (500 MW capacity), the wafer multi plant in Glomfjord (275 MW capacity) as well as the solar cell plant in Narvik (180 MW capacity). A staff of approximately 700 will be affected.
In the third quarter REC recognized costs of NOK 272 million related to the shutdown of production capacity in Norway, partially offset by income of NOK 222 million for termination of a wafer sales contract. Further closedown costs of approximately NOK 200 million and income of approximately NOK 400 million from termination of other wafer sales contracts are expected to be recognized in the fourth quarter.
Third quarter EBITDA excluding these special items was NOK 420 million.
EBIT before impairment charges was negative NOK 98 million in the third quarter, compared to NOK 202 million in the previous quarter. The capacity closedowns and a weaker market outlook led to impairment charges of NOK 1.2 billion on fixed assets in REC Wafer Norway in the third quarter. In the previous quarter REC recognized impairments of NOK 6.5 billion.
Loss before tax was NOK 445 million in the third quarter, compared to a loss of NOK 6,287 million in the previous quarter.
Basic EPS from continuing operations was NOK -0.76 in the third quarter, compared to NOK -6.70 in the previous quarter.
For more information, please see the attached third quarter 2011 report and spreadsheet with detailed financial information.
For more information, please contact:
Mikkel Tørud, VP and Investor Relations Officer, Tel: +47 976 99 144
Peder Poulsson, Investor Relations Analyst, Tel: +47 950 26 311
For press and media, please contact:
John Andersen, Jr., Group COO & EVP Wafer, Cells and Modules; +47 901 74 080
On the release day, President and CEO Ole Enger of REC will give a presentation together with other members of the management team. The presentation will take place at 08:00 hrs Norwegian time/CET at the conference centre Høyres Hus, Stortingsgaten 20, 0161 Oslo (www.hoyreshus.no
The presentation, held in English, will be broadcasted live over the Internet, and can be accessed from: www.recgroup.com
It will also be possible to listen to the presentation through a conference call. Please make sure to dial in 10 minutes prior to scheduled start time on one of the following numbers:
Confirmation code: 4085938
Norway Toll Free: 800 56 054
UK Toll Free: 0800 279 4841
USA Toll Free: 1877 249 9037
International Toll: +44 (0)20 7784 1036Afternoon program:
REC will further host an analyst conference call with possibilities for questions and answers later the same day at 15:00 CET. Please make sure to dial in at least 5 minutes ahead of time to finalize your registration:
Norway free call: 800 80 119
International dial in: +47 2318 4501
Immediately after the call, a replay of the conference call will be made available. To access, please dial +47 2318 4502 and use the following procedure:
1. Type pincode 1524
followed by #
2. Continue by typing reference number 524
followed by #
REC is a leading vertically integrated player in the solar energy industry. Ranked among the world's largest producers of polysilicon and wafers for solar applications and a rapidly growing manufacturer of solar cells and modules, REC also engages in project development activities in selected PV segments. Founded in Norway in 1996, REC is an international solar company, employing more than 3,900 people worldwide with revenues close to NOK 14 billion in 2010. Please visit www.recgroup.com
to learn more about REC
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)