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REC Silicon ASA : REC Silicon ASA's fourth quarter 2013 results Sandvika, February 12, 2014: REC Silicon ASA reported fourth quarter 2013 revenues from continuing operations of NOK 743 million and EBITDA from continuing operations of NOK 164 million. Net debt has been reduced to NOK 1.9 billion, down from NOK 2.6 billion in the third quarter after sale of REC Solar.
On October 25, 2013 REC Solar was sold. Revenues and EBITDA for REC Solar have been re-presented as discontinued operations.
REC Silicon US Operations reported fourth quarter revenues of NOK 752 million up from NOK 738 million in the previous quarter. EBITDA in the fourth quarter was NOK 187 million up from NOK 80 million in the previous quarter. Improvements in EBITDA can be primarily attributed to strong, stable operations resulting in higher volumes at lower cost. In addition, REC Silicon experienced increased average polysilicon selling prices and increased silicon gas sales volumes.
Despite the introduction of anti-dumping duties on solar grade polysilicon imported to China, polysilicon demand continues to strengthen and prices continue to increase.
Tore Torvund, CEO of REC Silicon ASA said, "I am pleased that our efforts to improve quality and reduce cost continue to strengthen our competitive position. Together with slightly increased demand for solar polysilicon, these efforts have led to an improvement in REC Silicon ASA's EBITDA in the last quarter."
Silicon gas sales volumes increased by 17 percent compared to the previous quarter. This increase reflects strong market demand and increased spot sales due to supply restrictions caused by recent accidents at competitor facilities.
Financial items for continuing operations were negative NOK 19 million, mainly reflecting interest expenses and fair value adjustments of the convertible bonds.
The loss from total operations was NOK 161 million in the fourth quarter, compared to a loss of NOK 1,578 million in the previous quarter. The reduced loss mainly reflects the impairments of the REC Solar disposal group at the end of the third quarter.
Basic EPS from total operations was positive NOK 0.07 in the fourth quarter 2013, compared to negative NOK 0.68 in the previous quarter.
For more information, please see the attached fourth quarter 2013 report.
Morning program:
On the release day, Tore Torvund, CEO of REC Silicon ASA 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 KS Agenda in Haakon VII's gate 9, 0114 Oslo (www.ksagenda.no).
The presentation, held in English, will be broadcasted live over the internet, and can be accessed from: www.recsilicon.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:
Norway Toll Free: 800 56 053
UK Toll Free: 0800 279 4841
USA Toll Free: 1877 280 1254
International Toll: +44 (0)20 3427 1915
Confirmation code: 7773031
Afternoon program:
REC Silicon ASA will also 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.
International dial in: +47 2316 2787
Please provide confirmation code 9022192 and state your name, company and country of residence.
For further information, please contact:
James A. May II, CFO,
+1 (509) 989-1023 or
Pal Elstad
+47 991 66 293
Email: pal.elstad@recsilicon.com
About REC Silicon ASA
REC Silicon ASA is a leading producer of advanced silicon materials, delivering high-purity polysilicon and silicon gas to the solar and electronics industries worldwide. We combine 25 years of experience and proprietary technology with the needs of our customers and annual production capacity of more than 20,000 MT of polysilicon from our two US-based manufacturing plants. Listed on the Oslo Stock Exchange (ticker: REC), the company is headquartered in Moses Lake, Washington and employs approximately 740 people.
For more information, go to: www.recsilicon.com
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Sandvika, February 26, 2014: REC Silicon ASA announced today that its subsidiaries, REC Silicon AS and REC Silicon Inc, have entered into agreements with Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. governing a joint venture partnership that will expand operations into China.
REC Silicon AS and Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. have entered into joint venture agreements for the formation of a production joint venture and a sales joint venture. REC Silicon Inc and Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. have entered into a technology transfer agreement, governing the terms under which REC Silicon Inc will transfer the exclusive, non-transferrable right to use its technology in China and Taiwan to the production joint venture.
The production joint venture will construct and operate a new plant for the production of silane gas, solar and electronic grade polysilicon, utilizing REC Silicon's next generation fluidized bed reactor (FBR) technology.
The new plant will be located in Yulin, in the Shaanxi Province, and is expected to have capacity of 18,000 metric tons of granular polysilicon, an additional 1,000 metric tons of Siemens polysilicon, and 500 metric tons of silane gas loading.
As part of these agreements, REC Silicon expects to receive upfront payments from Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd., totaling US$198 million (net of taxes) in March and August of 2014, for the production joint venture's rights to use its technology. As the production joint venture will have ownership of the technology rights, Shaanxi Non-Ferrous Tian Hong New Energy Co. Ltd. will be reimbursed by the production joint venture which will secure debt financing for the reimbursement instead of being funded by additional contributions from either party. Upon receipt of these payments and the issuance of necessary licenses for the production joint venture to conduct business, REC Silicon, Inc will begin to transfer necessary technology and operating procedures to the production joint venture.
REC Silicon will contribute US$244 million to acquire a 49% equity interest in the production joint venture. REC Silicon expects to make its capital contribution in three installments on the following schedule: US $75 million in September of 2014; US$15 million in August of 2016; and US$154 million in August of 2017. To acquire a 51% interest in the production joint venture, Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. will contribute US$254 million in two installments, on a similar schedule.
REC Silicon does not anticipate taking on any additional debt nor offering any new equity rights in order to fulfill its investment obligations in the joint venture. Receipt of the upfront payments will allow REC Silicon to meet its 2014 debt obligations and increase REC Silicon's financial stability.
The production joint venture will be governed by a board of four directors, with REC Silicon and Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. each appointing two directors. For the first three-year term, REC Silicon will appoint the Vice Chairman of the board and both the Chief Financial Officer and Chief Technology Officer; Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. will appoint the Chairman of the board and the Chief Executive Officer. During the second three-year term, REC Silicon will appoint the Vice Chairman of the board and the Chief Executive Officer of the production joint venture; Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. will appoint the Chairman of the board and the Chief Financial Officer of the production joint venture. Thereafter, appointment of those four positions will rotate between Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. and REC Silicon every three years.
REC Silicon and Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. have also entered into an agreement for a new sales joint venture that will be established close to the start up of the production joint venture. The term of the sales joint venture is six years, and each party will own a 50% equity interest. Capital contributions of the respective parties will be determined closer to incorporation. This sales joint venture will be responsible for the marketing and sales of all products from the new production joint venture and all equivalent products from REC facilities in the US.
The sales joint venture will be governed by a board of four directors, with REC Silicon and Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. each appointing two directors. For the initial three-year term, REC Silicon will appoint the Chairman of the board and the Chief Executive Officer; Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. will appoint the Vice Chairman of the board and the Chief Financial Officer. In the second three-year term, REC Silicon will appoint the Chairman of the board and the Chief Financial Officer; Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. will appoint the Vice Chairman of the board and the Chief Executive Officer.
Tore Torvund, CEO of REC Silicon ASA said, "I am excited to announce this strategic alliance with an ideal partner. This joint venture is a key step in the worldwide growth of REC Silicon and will strengthen its leadership position in the industry. It demonstrates the value of our technology and allows us to expand our capacity without requiring REC Silicon to use its current assets or to raise other funds in order to make its capital contribution."
REC Silicon is recognized in the industry as a leader in technology and efficient production, and it brings this proven technology along with production experience to the new joint venture. Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. is a wholly owned subsidiary of Shaanxi Non-Ferrous Metals Holding Group Co., Ltd., a well established Chinese company with assets in excess of US$17 billion.
Investor call:
Later today, REC Silicon ASA will host an investor conference call with the possibility of questions and answers at 2:30 CET. Please make sure to dial in at least 5-10 minutes ahead of time to finalize your registration.
International dial in: +44 (0)20 7136 2056
Norway Toll Free: 800 56054
UK Toll Free: 0800 279 5004
USA Toll Free: 1 877 280 2296
China Toll Free: 10800 712 2769
Please provide confirmation code 6136722 and state your name, company and country of residence.
After the investor conference call, for subsequent media inquiries, please contact:
In EU and China:
Tore Torvund
tore.torvund@recsilicon.com
+1 509-793-8581
In the US:
Ryan Dunn
ryan.dunn@recsilicon.com
+1 (509) 793-9020
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REC has decided to separate its Silicon and Solar businesses by listing REC Solar ASA as a separate company on the Oslo Stock Exchange. Through this transaction, both companies will improve their financing, with REC Solar ASA established as a debt-free leading provider of solar panels and solutions.
Key facts:
¦REC will establish REC Solar ASA as an independent listed company
¦An Extraordinary General Meeting (EGM) will be held on September 23 to approve the separation.
¦Subscription rights will be received by all REC shareholders on record as of the EGM date.
¦Shareholders will receive non-tradable subscription rights for one new share in REC Solar for each 58 shares they hold in REC.
¦The subscription period is expected to start on or about September 26 and end on or about October 10.
¦The listing of REC Solar ASA (ticker:
RECSOL) is expected on or about Oct 18.
REC shareholders do not need to act prior to the subscription period for the offering starting on or about September 26 in order to use the subscription rights.
Receiving and using the subscription rights in the new company will not affect the shareholding in REC. The subscription price will be NOK 20 per share, and oversubscription will not be allowed. REC shareholders will receive a prospectus for the proposed offering, and will be allocated subscription rights following the EGM.
The offering of 100 percent of the shares in REC Solar ASA has been underwritten by the largest shareholders of REC, valuing the equity of REC Solar ASA at NOK 800 million.
