REC Silicon Posts Q4 Net Loss of $26 Million on Lower Demand
The company’s polysilicon production dropped 20% YoY to 252 MT in Q4
Polysilicon manufacturer REC Silicon’s net loss widened to $26 million for the fourth quarter (Q4) of the financial year (FY) 2022 compared to the net loss of $13.1 million Year-over-Year (YoY).
The company attributed the loss to lower demand and higher expenses due to rising energy and raw material costs.
REC Silicon’s total polysilicon production during Q4 dropped 20% year-over-year (YoY) to 252 metric tons (MT). The company’s polysilicon sales for the quarter declined to 302 MT, down 37% YoY.
The silicon gas sales for the October-December period fell by 31% YoY to 515 MT.
The semiconductor-grade polysilicon sales volume totaled 226 MT compared to 371 MT YoY.
The fall in sales across different segments dented its quarterly revenue by 27% YoY to $31.6 million.
CEO of REC Silicon Kurt Levens said, “The financial results for Q4 2022 highlighted some key areas where we need to accelerate our progress in inflationary input cost mitigation. However, the market-related weakness in silicon gas shipments does not dampen the longer-term outlook and opportunity related to the semiconductor, renewable energy, and energy storage macro trends.”
During Q4, the company commenced the execution of a plan to realize the FBR (Fluidized Bed Reactor technology) production from its plant in Moses Lake, Washington.
REC is also planning a new granular polysilicon analytical laboratory in Moses Lake, for which it directed investments during the quarter.
The company said it was investing in silane enhancements for improved granular polysilicon quality and signed a memorandum of understanding with Hanwha Corporation for silane offtake.
The company formed a Yulin joint venture (JV) in China in 2018, a large-scale silicon manufacturing facility with a design capacity of 18,000 MT of FBR-B granular polysilicon. In 2022, the JV produced approximately 16,000 MT of FBT granular and around 625 MT of loaded silane.
REC announced an expansion strategy for 80,000 MT in Yulin JV in 2022.
REC Silicon’s overall Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) for Q4 turned negative at $23.6 million compared to $0.4 million.
In the total negative EBITDA, the semiconductor materials segment contributed an EBITDA loss of $6.5 million against the positive EBITDA of $9.3 million in Q4 2021.
The solar material segment contributed an EBITDA loss of $10.5 million compared to $2.6 million in the same period a year ago.
Full Year 2022
The company’s net loss increased to $87 million in FY 2022 compared to $43.5 million YoY, driven by decreased sales due to rising power costs.
The company’s revenue increased to $147.8 million in 2022 from $143.2 million YoY.
The company’s polysilicon production for the year increased to 1,375 MT from 1,225 MT YoY. However, the company sold 1,428 MT of polysilicon in FY 2022 compared to 1,636 MT in the previous year.
The silicon gas sales in 2022 dropped to 2,718 MT from 3,078 MT last year.
The company posted a negative EBITDA of $34.9 million in 2022 compared to a positive EBITDA of $7.7 million in 2021. REC Silicon said that the EBITDA was affected due to an increase in project restarting activities, including the FBR production line in Moses Lake, Washington.
REC Silicon posted revenue of $45 million in the second quarter of 2022, up 20% from $34.6 million in the previous quarter.
The company’s revenue stood at $34.6 million in the first quarter of 2022, a YoY jump of 23% and a quarter-over-quarter decline of 20% from $43.2 million in the previous quarter.