Renewable Energy Corporation ASA (REC) reported fourth quarter 2011 revenues of NOK 2,865 million and EBITDA of NOK 178 million. EBITDA was negatively affected by a weak solar market, aggressive polysilicon pricing and close down of production capacity in Norway. Affecting EBIT, REC recognized a further NOK 2.5 billion impairment on fixed assets of the Singapore operations in the quarter. REC reduced net debt by NOK 0.6 billion in the fourth quarter to NOK 4.7 billion.
After a steep price decline on solar modules, investments in PV systems are currently yielding favorable end-user returns in a number of markets. However overcapacity and inventory reductions led to steep market price declines throughout the fourth quarter. After a slow start, demand for solar modules improved at the very end of the fourth quarter.
REC's fourth quarter revenues were down five percent from the previous quarter, while EBITDA was NOK 178 million in the fourth quarter, down from NOK 370 million in the previous quarter. The decrease in revenues and EBITDA is mainly explained by reduced selling prices partly offset by higher sales volumes. Compared to the previous quarter, REC's average selling prices for polysilicon were down 42 percent, wafer prices were down 31 percent and module prices were down 15 percent.
In the fourth quarter REC recognized income of NOK 690 million from terminations of wafer sales contracts partly offset by costs of NOK 335 million related to permanent shutdown of the cell production and approximately 50 percent of the wafer production capacity in Norway.
For the year 2011 revenues amounted to NOK 13,366 million, down three percent from 2010. EBITDA in 2011 amounted to NOK 2,867 million, down from NOK 3,532 million in 2010.
EBIT before impairment charges was negative NOK 288 million in the fourth quarter, compared to negative NOK 98 million in the previous quarter. A weaker market outlook led to impairment charges of NOK 2.5 billion on fixed assets in Singapore in the fourth quarter.
After total impairments of NOK 10.1 billion in 2011, EBIT for the full year 2011 was negative NOK 9,508 million down from positive NOK 1,018 million in 2010.
Loss from total operations was NOK 2,482 million in the fourth quarter, compared loss of NOK 759 million in the previous quarter. For the year 2011, REC had a loss from total operations of NOK 10,030 million, compared to a profit before tax of NOK 989 million in 2010.
Basic EPS from total operations was NOK -2.49 in the fourth quarter, compared to NOK -0.76 in the previous quarter. For the year 2011, basic EPS from total operations was NOK -10.06 compared to NOK 1.07 in 2010.