Renewable Energy Corporation ASA (REC) reported second quarter 2012 revenues from continuing operations* of NOK 1,987 million and EBITDA of NOK 267 million. Further operational improvement resulted in FBR cash production cost of 12.0 USD/kg and module cash cost of 71 Eurocents/watt. Net debt was reduced to NOK 4.1 billion in the quarter.
Despite high installation volumes, industry wide overcapacity continued to put pressure on market prices throughout the quarter.
Compared to the previous quarter, REC's selling prices for polysilicon and modules were down eight percent.
After the permanent shut down of all production, REC Wafer is reported as discontinued operations* from the second quarter. REC's second quarter revenues from continuing operations were in line with the previous quarter, while EBITDA adjusted for special items was NOK 230 million, up from NOK 128 million in the previous quarter.
EBIT from continuing operations was NOK -3.7 billion in the second quarter, compared to negative NOK 75 million in the previous quarter. The second quarter EBIT includes impairment charges of NOK 3.6 billion, primarily related to fixed assets in Singapore based on revised external views on future prices.
Loss after tax from continuing operations was NOK 3.7 billion in the second quarter, compared to loss of NOK 0.3 billion in the previous quarter. Loss after tax from total operations was NOK 4.1 billion, compared to loss of NOK 0.2 billion in the previous quarter.
EPS for total operations was NOK -4.07 and NOK -0.21 for the same periods.
In the second quarter REC generated net cash from total operating activities of NOK 0.6 billion, capex spend was NOK 0.1 billion and an increase in fair value of REC's convertible bond and currency effects negatively affected net debt by NOK 0.4 billion. Net debt was hence reduced by NOK 0.1 billion to NOK 4.1 billion.
On July 4, 2012 REC announced a refinancing proposal that included an issue of new shares raising gross proceeds of NOK 1.3 billion through a successfully placed private placement, a subsequent repair offering of up to NOK 375 million and a new NOK 2 billion bank debt facility maturing in April 2014. The proposal for issuance of new shares through the private placement, the subsequent offering, and hence also the refinancing of the bank debt facility, is subject to final approval by the Extraordinary General Meeting to be held on July 27, 2012.
"I am very pleased to see further improvements operationally and financially and that we continue to generate positive cash flow under current market conditions. I am also grateful that our shareholders and banks continue to provide support as demonstrated through the proposed re-financing. The combination of a solid balance sheet and a strong market and cost position gives us the necessary strength to weather the current industry turmoil ", says Ole Enger CEO.
(*) From the second quarter 2012, external profit and loss items of REC Wafer are re-presented as discontinued operations, and the historic figures for most line items in the statement of income are re-presented and differ from what was previously reported. Line items and results presented for continuing and discontinued operations will not represent the activities of the operations as if they were standalone entities, for past periods or likely to be earned in future periods.