REC Silicon’s sales rise 18% in Q2, net loss increases

The Norwegian-American polysilicon producer saw its revenue drop slightly Y-o-Y to $61 million in the latest quarter, as its Washington polysilicon facility runs at only 50% utilization due to restricted access to the Chinese market.

July 20, 2017 Emiliano Bellini

Image: REC Silicon

Polysilicon and silicon gases provider REC Silicon reported its 2Q revenue came in at $61 million, down slightly from $71 million in the same period a year earlier. EBITDA, however, improved considerably from a loss of $14 million in the second quarter of last year to a slim profit of $1.3 million in the latest quarter.

The company’s operating loss also improved year-on-year from $38 million to $19 million. Net loss, however, increased from $19 million in the second quarter of 2016 to $65 million in the same 3-month period of this year.

Meanwhile, the volume of polysilicon sold grew by 18% quarter-on-quarter from 2,509 MT to 2,960 metric tons (MT) but dropped 7% from the same quarter in 2016, when it sold 3,634. Polysilicon production, instead, rose significantly year-on-year from 3,634 MT to 2,960 MT.

At the same time average polysilicon sales prices dropped by 7% sequentially. This, the company said, was mainly attributable to restricted access to markets in China due to the trade war and polysilicon overcapacity. “Wafer producers,” REC Silicon explained, “continue to operate near full capacity, however, polysilicon orders are being delayed to limit exposure to the risk of excess inventories should end use PV demand deteriorate.”

The company’s U.S. polysilicon manufacturing facility in Moses Lake, Washington, is now operating at a reduced utilization rate of 50%, and it will restart working at full capacity only once the above-mentioned trade issue is resolved, the company stated. Spot prices for polysilicon outside of China dropped by 11% to $14.30 per kilogram at the end of the latest quarter, while prices inside China decreased by 17%.

Looking forward, the company said it is targeting to produce 3,070 MT of polysilicon in the third quarter and 12,500 MT in full fiscal year 2017. This includes operation of the Moses Lake factory at approximately 50% capacity utilization throughout 2017.

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