REC Silicon ASA - Solar Trade Dispute with China Forces Layoffs
REC Silicon ASA - Solar Trade Dispute with China Forces Layoffs
Moses Lake, Washington - July 1, 2018: REC Silicon ASA (REC Silicon)
REC Silicon will execute a layoff affecting nearly 40% of its current workforce
in Moses Lake, Washington on July 2, 2018. This layoff will impact approximately
100 employees across the company and is a direct result of the on-going solar
trade dispute between China and the United States. Due to this on-going trade
dispute, the company has not been able to access its critical market in China
since 2014. This has caused successive reductions in REC Silicon's operations in
the United States.
REC Silicon has decided to reduce its production at Moses Lake to approximately
25% of total production capacity. This decision is in response to the solar
trade dispute between China and the United States and reduced demand for solar
grade polysilicon. The actions taken today will help maintain the company's
liquidity, its ability to meet financial obligations, and maintain REC Silicon's
capability to resume manufacturing operations when access to China's polysilicon
markets is restored.
REC Silicon's management regrets today's lay-off of our highly-skilled
colleagues. We have done all we can to avoid today's action, but we have no
choice while the China market remains closed. It is a tremendous injustice that
the hard-working Americans, who have made REC Silicon the polysilicon industry's
technology leader and one of the most competitive producers in the world are now
losing their jobs. REC Silicon can out-compete its foreign rivals, and we can do
it from our manufacturing locations here in the United States. We simply need
fair access to the China market.
REC Silicon invested $1.7 Billion to construct a state of the art, cost leading
solar grade polysilicon production facility in Moses Lake, Washington in 2010.
At its peak in 2011, REC Silicon generated $1 Billion in annual revenues from
its operations in the United States and provided approximately 900 high paying
jobs. Approximately 95% of REC Silicon's revenues are generated from sales in
markets outside the United States. As a consequence of the on-going solar trade
dispute with China, REC Silicon has executed successive layoffs to preserve its
operations in the United States. After the layoff today, the company will
continue to employ approximately 400 people at its facilities in Moses Lake,
Washington and Butte, Montana. As a direct result of the solar trade dispute,
REC Silicon's workforce has declined by a total of 500 jobs since 2011. During
the same period, the company's revenues have declined by over 70% to $272
Million in 2017.
REC Silicon's fluid bed reactor (FBR) production facility in Moses Lake,
Washington produces the lowest unsubsidized cost solar polysilicon in the world.
Because REC Silicon employs a highly cost competitive manufacturing technology,
the company's products are competitive without trade protection. President
Trump and U.S. Trade Representative Robert Lighthizer committed to pursue a
resolution of the AD/CVD measures imposed by the Government of China on U.S.
polysilicon. There has not been a resolution nor any re-opening of the China
market to REC Silicon. It is now absolutely urgent that the U.S. Government
takes steps to re-open the China market for U.S. polysilicon production to avoid
further job losses, avoid the loss of U.S. technology leadership, to preserve
this important part of the solar energy supply chain in the United States, to
allow REC Silicon to re-start production, and most importantly allow us to re-
hire our skilled and dedicated workers.
REC Silicon's markets for semiconductor grade polysilicon and silicon gas
products have not been impacted by the solar trade dispute. REC Silicon's
operations in Butte, Montana will continue to support these markets.
REC Silicon currently has approximately $42 Million in cash deposits and expects
to report approximately $58 Million in revenues for the second quarter of 2018.
Second quarter FBR production is expected to be 2,040 MT or 240 MT below the
guidance on April 26, 2018. The results for the company's semiconductor segment
and silicon gas sales are expected to be near guidance. Current market
conditions will negatively impact the company's profitability and credit risk
exposure. REC Silicon expects to recognize additional impairments to
inventories, accounts receivable, and fixed assets in its second quarter
earnings release on July 19, 2018.
Conference call
REC Silicon will host a conference-call to answer questions from investors,
analysts and other interested parties on 2 July at 8:00 am CET.
To join this event, please use the below Click to Join link 5-10 minutes prior
to start time, where you will be asked to enter your phone number and
registration details. Our Event Conferencing system will call you on the phone
number you provide and place you into the event. Please note that the Click to
Join link will be active 15 minutes prior to the event.
Click to Join >>
Use the Click to Join option above for the easiest way to join your conference
or view the complete list of access numbers and conference start times
For further information, please contact:
Francine Sullivan, Vice President Business Development
REC Silicon ASA
Phone: +1 509 750 1133
Email: francine.sullivan@recsilicon.com
James A. May II, Chief Financial Officer
REC Silicon ASA
Phone: +1 509 989 1023
Email: james.may@recsilicon.com
Nils O. Kjerstad
IR Contact Europe
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, and 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.
Moses Lake, Washington - July 1, 2018: REC Silicon ASA (REC Silicon)
REC Silicon will execute a layoff affecting nearly 40% of its current workforce
in Moses Lake, Washington on July 2, 2018. This layoff will impact approximately
100 employees across the company and is a direct result of the on-going solar
trade dispute between China and the United States. Due to this on-going trade
dispute, the company has not been able to access its critical market in China
since 2014. This has caused successive reductions in REC Silicon's operations in
the United States.
REC Silicon has decided to reduce its production at Moses Lake to approximately
25% of total production capacity. This decision is in response to the solar
trade dispute between China and the United States and reduced demand for solar
grade polysilicon. The actions taken today will help maintain the company's
liquidity, its ability to meet financial obligations, and maintain REC Silicon's
capability to resume manufacturing operations when access to China's polysilicon
markets is restored.
REC Silicon's management regrets today's lay-off of our highly-skilled
colleagues. We have done all we can to avoid today's action, but we have no
choice while the China market remains closed. It is a tremendous injustice that
the hard-working Americans, who have made REC Silicon the polysilicon industry's
technology leader and one of the most competitive producers in the world are now
losing their jobs. REC Silicon can out-compete its foreign rivals, and we can do
it from our manufacturing locations here in the United States. We simply need
fair access to the China market.
REC Silicon invested $1.7 Billion to construct a state of the art, cost leading
solar grade polysilicon production facility in Moses Lake, Washington in 2010.
At its peak in 2011, REC Silicon generated $1 Billion in annual revenues from
its operations in the United States and provided approximately 900 high paying
jobs. Approximately 95% of REC Silicon's revenues are generated from sales in
markets outside the United States. As a consequence of the on-going solar trade
dispute with China, REC Silicon has executed successive layoffs to preserve its
operations in the United States. After the layoff today, the company will
continue to employ approximately 400 people at its facilities in Moses Lake,
Washington and Butte, Montana. As a direct result of the solar trade dispute,
REC Silicon's workforce has declined by a total of 500 jobs since 2011. During
the same period, the company's revenues have declined by over 70% to $272
Million in 2017.
REC Silicon's fluid bed reactor (FBR) production facility in Moses Lake,
Washington produces the lowest unsubsidized cost solar polysilicon in the world.
Because REC Silicon employs a highly cost competitive manufacturing technology,
the company's products are competitive without trade protection. President
Trump and U.S. Trade Representative Robert Lighthizer committed to pursue a
resolution of the AD/CVD measures imposed by the Government of China on U.S.
polysilicon. There has not been a resolution nor any re-opening of the China
market to REC Silicon. It is now absolutely urgent that the U.S. Government
takes steps to re-open the China market for U.S. polysilicon production to avoid
further job losses, avoid the loss of U.S. technology leadership, to preserve
this important part of the solar energy supply chain in the United States, to
allow REC Silicon to re-start production, and most importantly allow us to re-
hire our skilled and dedicated workers.
REC Silicon's markets for semiconductor grade polysilicon and silicon gas
products have not been impacted by the solar trade dispute. REC Silicon's
operations in Butte, Montana will continue to support these markets.
REC Silicon currently has approximately $42 Million in cash deposits and expects
to report approximately $58 Million in revenues for the second quarter of 2018.
Second quarter FBR production is expected to be 2,040 MT or 240 MT below the
guidance on April 26, 2018. The results for the company's semiconductor segment
and silicon gas sales are expected to be near guidance. Current market
conditions will negatively impact the company's profitability and credit risk
exposure. REC Silicon expects to recognize additional impairments to
inventories, accounts receivable, and fixed assets in its second quarter
earnings release on July 19, 2018.
Conference call
REC Silicon will host a conference-call to answer questions from investors,
analysts and other interested parties on 2 July at 8:00 am CET.
To join this event, please use the below Click to Join link 5-10 minutes prior
to start time, where you will be asked to enter your phone number and
registration details. Our Event Conferencing system will call you on the phone
number you provide and place you into the event. Please note that the Click to
Join link will be active 15 minutes prior to the event.
Click to Join >>
Use the Click to Join option above for the easiest way to join your conference
or view the complete list of access numbers and conference start times
For further information, please contact:
Francine Sullivan, Vice President Business Development
REC Silicon ASA
Phone: +1 509 750 1133
Email: francine.sullivan@recsilicon.com
James A. May II, Chief Financial Officer
REC Silicon ASA
Phone: +1 509 989 1023
Email: james.may@recsilicon.com
Nils O. Kjerstad
IR Contact Europe
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, and 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.
Redigert 21.01.2021 kl 07:43
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XL11
02.07.2018 kl 09:12
9676
Jeg tror AB må ta noe beroligende i dag, men han kommenterer sikkert når virkningen har inntrådt.
Sa2ri
02.07.2018 kl 09:12
9743
PAS er ute med en oppdatering etter dagens melding. De skriver følgende:
"U.S./China trade dispute forces layoffs – significant negative
REC Silicon just announced it will execute a layoff of approximately 100 of its current workforce in Moses Lake as a consequence of the ongoing trade dispute between the U.S. and China which denies REC access to the Chinese market, representing ~80% of global polysilicon demand. The layoff entails reducing utilization to 25% at Moses Lake (50% from before), suggesting a reduction in EBITDA’19e to USD 20-25m, compared to our previous estimate of USD 50m. We have a HOLD recommendation and a target price of NOK 1.4 for REC, which will be significantly reduced following this news. Assuming a reduced 2020 capacity utilization to 50% (90% prev.) our target price would preliminarily be reduced to NOK ~0.8 (EV/EBITDA’20e ~6x)."
"U.S./China trade dispute forces layoffs – significant negative
REC Silicon just announced it will execute a layoff of approximately 100 of its current workforce in Moses Lake as a consequence of the ongoing trade dispute between the U.S. and China which denies REC access to the Chinese market, representing ~80% of global polysilicon demand. The layoff entails reducing utilization to 25% at Moses Lake (50% from before), suggesting a reduction in EBITDA’19e to USD 20-25m, compared to our previous estimate of USD 50m. We have a HOLD recommendation and a target price of NOK 1.4 for REC, which will be significantly reduced following this news. Assuming a reduced 2020 capacity utilization to 50% (90% prev.) our target price would preliminarily be reduced to NOK ~0.8 (EV/EBITDA’20e ~6x)."
Redigert 02.07.2018 kl 09:15
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rischioso
02.07.2018 kl 09:09
9835
AB,
nå er vi kommet dit jeg delte fot bare kort tid siden. Selger du noe eller snitter du fortsatt ned?
nå er vi kommet dit jeg delte fot bare kort tid siden. Selger du noe eller snitter du fortsatt ned?
6.e juli ( løsning kan komme når som helst nå). Hvis ikke løsning så full Trade war: The administration said $34 billion worth of Chinese goods will be subject to tariffs starting July 6, with an additional $16 billion worth of products undergoing further review and public hearings.
China quickly retaliated, claiming it would strike back with tariffs of the “same strength.” It said it would specifically target industries that would hit Trump supporters hard, including American farmers and industrial workers in the Midwest.
Now Trump is threatening yet another 10 percent tariff on $200 billion worth of Chinese imports, asking officials to draw up a list of goods that could be subject to taxes.
China’s commerce ministry quickly responded to Trump’s new tariffs, calling his practices “blackmailing.”
China quickly retaliated, claiming it would strike back with tariffs of the “same strength.” It said it would specifically target industries that would hit Trump supporters hard, including American farmers and industrial workers in the Midwest.
Now Trump is threatening yet another 10 percent tariff on $200 billion worth of Chinese imports, asking officials to draw up a list of goods that could be subject to taxes.
China’s commerce ministry quickly responded to Trump’s new tariffs, calling his practices “blackmailing.”
Redigert 02.07.2018 kl 08:58
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Roger Berntsen: USAs viktigste handelspartnere, blant andre EU, Kina, Canada og Mexico, truer nå med betydelige tollskjerpelser overfor USA dersom Trump fortsetter sin offensiv. Med andre ord ligger alt til rette for at en fullskala handelskrig kan bryte ut», fortsetter Berntsen.
«Når det er sagt, det mest sannsynlige scenario, slik vi ser det, er en diplomatisk løsning på `konflikten´. Det er for øvrig naturlig at de landene som har betydelig handelsoverskudd overfor USA, deriblant Norge og Kina, vil måtte bidra til å redusere dette over tid», avslutter analysesjefen.
«Når det er sagt, det mest sannsynlige scenario, slik vi ser det, er en diplomatisk løsning på `konflikten´. Det er for øvrig naturlig at de landene som har betydelig handelsoverskudd overfor USA, deriblant Norge og Kina, vil måtte bidra til å redusere dette over tid», avslutter analysesjefen.
Hvis man skal prøve å fokusere på det positive slik at det ikke blir borte i flommen av negativitet for å prøve å opprettholde et balansert bilde så var timingen på meldingen perfekt i forhold til at forhandlinger innfor 6.e juli frist trade war nå pågår intenst. Denne melding highlighter rec sin situasjon i dette trade war slik at vi ikke blir glemt i den fortsatt sannsynlige løsningen. Videre har jeg argumentert for å stenge ned rec ML slik vi gjorde i 2016 i påvente løsning. Butte går bedre enn noensinne og kan holde oss flytende men da må alle hull tettes ergo ML må stenges eller hvis mulig drive på 25% til avklaring på trade war eller bedre tider. Og bedre tider er like rundt hjørnet. Vi er i en midlertidig dupp grunnet Kina nå men alle spår solar opp allerede neste år og noen spår 2-3 dobling i de nærmeste årene ( les pv magazine).https://www.google.no/amp/s/www.vox.com/platform/amp/world/2018/6/19/17478526/trump-china-trade-war-tariff-taxes-xi-jinping
Redigert 02.07.2018 kl 08:54
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stinkapiano
02.07.2018 kl 08:30
10288
Naturligvis er fall i sil-prisene negativt, men fallet er med stor sannsynlighet midlertidig pga Kinas politikk på kort sikt.
REC har imidlertid også andre bein å stå på, og det er mange konkurrenter som får atskillig større problemer.
Dette bidrar forhåpentligvis til å sanere markedet.
Meldingen viser at REC tar grep for å redusere kostnadene enda mer, og de gir et klart budskap til og legger et sterkt press på amerikanske myndigheter.
Videre nedskrivninger som ødelegger ebit, er helt uinteressante. De skaper skattemessig underskudd, som gir mindre skatt senere.
Selskapet tjener fortsatt penger.
Men meldingen kommer helt sikkert til å benyttes aktivt av de som skal dekke inn short og kjøpe seg inn igjen.
Den kan derfor skape en god kjøpsanledning i dag og de nærmeste dagene.
Jeg skal i alle fall ha mer, og grunnen er bl.a. opplysninger som de AB legger fram i start-innlegget i sin "Helgens kommentar".
REC har imidlertid også andre bein å stå på, og det er mange konkurrenter som får atskillig større problemer.
Dette bidrar forhåpentligvis til å sanere markedet.
Meldingen viser at REC tar grep for å redusere kostnadene enda mer, og de gir et klart budskap til og legger et sterkt press på amerikanske myndigheter.
Videre nedskrivninger som ødelegger ebit, er helt uinteressante. De skaper skattemessig underskudd, som gir mindre skatt senere.
Selskapet tjener fortsatt penger.
Men meldingen kommer helt sikkert til å benyttes aktivt av de som skal dekke inn short og kjøpe seg inn igjen.
Den kan derfor skape en god kjøpsanledning i dag og de nærmeste dagene.
Jeg skal i alle fall ha mer, og grunnen er bl.a. opplysninger som de AB legger fram i start-innlegget i sin "Helgens kommentar".
bokaj70
02.07.2018 kl 08:01
10511
Ikke noget nyt der. AB har ingen forståelse for det fundamentale og vil som altid skrive 100 indlæg som skal overbevise alle om at hele tiden har haft ret, at det er ham og ikke frit fald i polysilicium priserne der har sænket kursen osv, osv.
Det er hans liv. Indrømmelser er ikke en option
Det er hans liv. Indrømmelser er ikke en option
Sa2ri
02.07.2018 kl 07:55
10609
SB1M er ute med en oppdatering etter meldingen/PW som kom tidligere i dag. De opprettholder 0,80 og sier blant annet følgende:
"Reduce capacity at Moses Lake to 25% - The tough but sensible move
REC Silicon will execute a layoff affecting nearly 40% of its current workforce at Moses Lake and reduce capacity at the facility to approximately 25% of total production. The decision is a result of the ongoing US-China trade war, and we argue it was triggered by the FiT cut's in China last month which sent the polysilicon prices in a freefall. In addition, REC reports a negative profit warning of c.USD58m revenues versus our expected USD69m, and the company expects additional impairments to inventories, accounts receivable, and fixed assets in the second quarter.
In our latest report we highlighted that Moses Lake was running on a negative EBITDA and that REC had a limited cash position to fund the continued operation. Thus, in total we view the move as positive for REC's cash balance going forward, but it is overshadowed but the negative signalling effect. Continued low polysilicon prices does not only affect Moses Lake, but also the value of Yulin, and we argue that the need for additional funding is significant.
We value REC at NOK0.8 per share based on Moses Lake being closed and we expect to keep our Sell recommendation following this announcement due the possibility for significant negative triggers going forward. We expect the share to trade approximately 10% below the market today.
In our latest report (attached), we argued that the cash drain from Moses Lake (see below) was already significant and that the USD50m would not last long in the current polysilicon price environment continued. REC reports a cash position of USD42m vs USD50m at the end of Q1 2018."
"Reduce capacity at Moses Lake to 25% - The tough but sensible move
REC Silicon will execute a layoff affecting nearly 40% of its current workforce at Moses Lake and reduce capacity at the facility to approximately 25% of total production. The decision is a result of the ongoing US-China trade war, and we argue it was triggered by the FiT cut's in China last month which sent the polysilicon prices in a freefall. In addition, REC reports a negative profit warning of c.USD58m revenues versus our expected USD69m, and the company expects additional impairments to inventories, accounts receivable, and fixed assets in the second quarter.
In our latest report we highlighted that Moses Lake was running on a negative EBITDA and that REC had a limited cash position to fund the continued operation. Thus, in total we view the move as positive for REC's cash balance going forward, but it is overshadowed but the negative signalling effect. Continued low polysilicon prices does not only affect Moses Lake, but also the value of Yulin, and we argue that the need for additional funding is significant.
We value REC at NOK0.8 per share based on Moses Lake being closed and we expect to keep our Sell recommendation following this announcement due the possibility for significant negative triggers going forward. We expect the share to trade approximately 10% below the market today.
In our latest report (attached), we argued that the cash drain from Moses Lake (see below) was already significant and that the USD50m would not last long in the current polysilicon price environment continued. REC reports a cash position of USD42m vs USD50m at the end of Q1 2018."
Man skal huske på de stadigvæk tjener penge, de holder udgifterne nede, betaler deres gæld til tiden og mere til. Omstændighederne viser hvor stærke REC er i marked, for der vil helt sikkert være konkurrenter der bukker under, som ikke kan fremstille til de priser REC kan.
De er og bliver de stærkeste på marked og uden USA toldmur er de dem i verden der fremstiller til laveste omkostninger.
Toldmuren rammer alle.
De må få travlt på deres fabrik i Kina.
De er og bliver de stærkeste på marked og uden USA toldmur er de dem i verden der fremstiller til laveste omkostninger.
Toldmuren rammer alle.
De må få travlt på deres fabrik i Kina.
Tbra
02.07.2018 kl 07:37
10784
De er nok rett medisin til Trumph . Nå vil en sitte igjen med mer på bunnlinja .
Ajdå. Men har ju gått bra tidligere med 0% produksjon ogso.vi får se.blev bra cash flow den gang tror jeg, noll kost og salg Fra lager.
Kan det vara polyindustrin i Kina som ny gett sig ut i row? Tex närliggande taiwan, Japan?
Kan det vara polyindustrin i Kina som ny gett sig ut i row? Tex närliggande taiwan, Japan?
Redigert 02.07.2018 kl 07:20
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Sa2ri
02.07.2018 kl 07:06
10967
Ikke akkurat strålende nyheter på en mandags morgen dette her:
"Current market conditions will negatively impact the company's profitability and credit risk exposure. REC Silicon expects to recognize additional impairments to inventories, accounts receivable, and fixed assets in its second quarter earnings release on July 19, 2018."
"Current market conditions will negatively impact the company's profitability and credit risk exposure. REC Silicon expects to recognize additional impairments to inventories, accounts receivable, and fixed assets in its second quarter earnings release on July 19, 2018."
Redigert 02.07.2018 kl 07:06
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