Fornebu, Norway - October 3, 2019: The effects of the on-going trade war and its impact on semiconductor markets have created the expectation of a sharp decline in REC Silicon's third quarter shipments. However, REC Silicon ASA (REC Silicon) will report shipments of approximately 860MT of silicon gases for the third quarter of 2019. This represents a decrease of 40MT compared to the guidance of 900MT provided on July 25, 2019. The decrease is primarily a result of lower sales directly into China but also includes some impact from lower than anticipated demand for semiconductor and flat panel display applications outside of China. As a result of REC Silicon's efforts to maintain sales volumes, prices realized by REC Silicon for Silane have declined by approximately 1.3 percent in the third quarter of 2019 compared to the second quarter of 2019.
REC Silicon currently expects silicon gas sales to remain near current levels for the fourth quarter of 2019. However, the Company will continue to evaluate the impacts of the trade war and market conditions on future sales and will provide additional guidance with the earnings release on October 30, 2019.
REC Silicon is the largest global producer of silicon gas with production facilities in Butte, Montana and Moses Lake, Washington. These facilities use silicon gas to make polysilicon, however, REC Silicon also delivers approximately 70% of the global supply of silicon gases to semiconductor customers located primarily outside of China in Asia. In addition, REC Silicon is a 15% owner of a state-of-the-art granular polysilicon plant located in Yulin, China. The Yulin plant produces high quality polysilicon for the PV industry through its FBR-B reactors but also has 500MT of silane gas loading capacity which will serve customers in China. There are no plans to expand the silane gas loading capacity at the Yulin JV. REC Silicon's CEO is the Vice Chairman of the Yulin JV Board of Directors.
REC Silicon expects to report sales volumes of semiconductor grade polysilicon of 142MT during the third quarter of 2019 compared to 201MT reported for the second quarter of 2019.
REC Silicon will report cash balances of approximately USD 46.2M at September 30, 2019.
The REC Silicon Board of Directors has decided to consider the divestment of the Butte facility. Production from this facility primarily serves semiconductor markets with silicon gases and semiconductor polysilicon. If an acceptable bid is received, the proceeds will be used to retire the company's debts, to provide a buffer for contingent liabilities (tax examination and indemnity loan), and to prepare to restart FBR production in Moses Lake, Washington when the trade dispute with China is resolved and REC Silicon regains access to polysilicon markets in China. Roth Capital has been retained as advisors for this possible divestment.
For further information, please contact:
James A. May II, Chief Financial Officer
Phone: +1 509 989 1023
Email: james.may@recsilicon.com
Nils O. Kjerstad
IR Contact
Phone: +47 9135 6659
Email: nils.kjerstad@crux.no
About REC Silicon
REC Silicon is a leading producer of advanced silicon materials, delivering high-purity polysilicon and silicon gas to the solar and electronics industries worldwide. We combine over 30 years of experience and proprietary technology with the needs of our customers, with 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 Fornebu, Norway.
For more information, go to: www.recsilicon.com
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
