REC Silicon rebounds to Q2 profit
Despite missing its guidance on production costs, REC Silicon rebounded to profitability in the second quarter amid a rosier landscape for polysilicon producers, sending its shares up strongly on Friday.
REC Silicon, which was split off from Singapore-based sister company REC Solar last year, chalked up a quarterly profit from continuing operations of $24.6m – compared to losses of $49.7m in the previous quarter, and $85.9m in the year-ago period.
The company reported an earnings per share of $0.01, compared to a loss per share of $0.04 during the same period last year.
The return to profits came on the back of a 12% surge in revenues – to $126.9m – giving the company an EBITDA margin of 25%.
Compared to the previous quarter, polysilicon production rose 10% to 4,375 metric tonnes, and the average sale price of polysilicon rose 4% amid a strongly growing global PV market.
REC Silicon, which produces PV-grade polysilicon and silicon gases at two factories in the US states of Washington and Montana, widely missed its quarterly production-cost target of $13.40/kg (cash cost for its fluidised bed reactor technology), with an actual cost of $14.30/kg.
The company also lowered its full-year production guidance by 800MT, to 18,600MT.
Still, REC silicon said it expects its FBR cash production costs in the third quarter to fall sharply to $11.20/kg, and it anticipates producing 5,000MT during the quarter – essentially running at full capacity.
Global polysilicon markets will remain “balanced” during the second half of the year, predicts REC Silicon, whose Norway-listed shares rose more than 12% on Friday on its results and outlook.
While the ongoing US-China solar spat, which has spilled over into the polysilicon sector, “continues to be a significant concern”, REC Silicon is able to sell into China via the “Process in Trade” loophole embedded in China’s custom laws, which exempts goods imported only to be processed into exports from paying duties.