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Thursday, Rec Silicon presented the results of the second quarter of the year. It turned out that the solar energy company is slashing $ 2.8 billion dollars due to the escalation of the trade war between the United States and China. In addition to the trade dispute, silicon prices also fell sharply in the second quarter.
– Rec believes that prices are at the current level during the third quarter, it is stated in the presentation material.
The company is now considering a suspension of solar activity in the United States.
Rec also downgrades its technical forecast for 2018. Total silicon production is expected to reach 9,284 tonnes this year, compared to 11,330 tonnes, with FBR production reduced from 9,760 tonnes to 7,606 tonnes
. ] – At the end of May, market visibility dropped and inventories began to increase as silicon demand increased in China, writes Rec.
The first week of June also reduced support for solar installations. uncertainty in the global market, resulting in a sharp decline in silicon demand. To curb inventory growth, manufacturers have rapidly reduced production along the value chain. According to the report, the drop in demand has lowered prices for solar grade silicon
Rec notes in the footnotes of the accounts that it conducted a depreciation test at the end of the month of June. As a result, the Company recorded a $ 397 million write-down in the Solar Materials business, while reversing a previous $ 56 million impairment loss in the Semiconductor Zone. In total, the company depreciated values of $ 340 million, or $ 2.8 billion
. Rec EBITDA before EBITDA was negative $ 9.6 million in the second quarter, or NOK 78.5 million. The same result was the second quarter of last year plus 14.6 million, or $ 120 million
Affected by the trade war
Rec Silicon was hit by a growing trade war between United States and China since 2013. While the company's largest factory, Moses Lake Silicon Plant, is located in the United States, almost all of China's customers are. Customers are mostly manufacturers of solar panels and solar panels.
Due to the difficult situation, the production of the state-of-the-art Moses Lake plant in Washington, United States, has been in semi-machine for more than a year and a half. Now production is halved and less than 25% of its capacity.
Recently, Rec Silicon recounts that four out of ten employees of the factory have already undergone significant staff cuts.
– We are in a financial situation which means that we do not have a great deal of freedom of action. What we are doing now is to reduce the endowment and the cost of adaptation to the demanding situation, said Tore Torvund to DN
The director of Rec Silicon could not rule out a complete closure of the factory of Moses Lake in the state of Washington. on the west coast of the United States. (Terms)
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