Renewable Energy Corporation ASA (OSE: REC) reported Q1 2012 revenues of 2.14 billion NOK (-25% sequentially, 48% year-on-year) and EBITDA of 455 million. Volumes are high and customers are getting attractive net present value on their investments but industry oversupply is still putting pressure on prices. Against Q4 2011, polysilicon prices were down 15%, wafer prices 24% and module prices 18%. Profit for the period is -209 million.
Given the fact that levelized electricity cost from PV modules is now below retail electricity prices in many corners of the world, REC expects continued installation growth in many markets, Asia and the U.S. in particular. The feed-in-tariff adjustment in Germany and expected similar action in Italy will affect these markets. The company quoted global analysts forecast of solar installation in between 26 to 32 GW for 2012 but with high uncertainty.
Hopes of the remaining multicrystalline wafer plant in Norway to stay in operation were also dashed. The 650 MW plant at Herøya will be discontinued from this quarter. This despite cost reduction of above 25% percent within last two years. REC says it just cannot compete with the Chinese manufacturers with market prices down two thirds in a year.
About 460 employees will lose their jobs. This is fresh on the heels of Glomfjord closure. Majority of employee representatives on the Board voted against the closure. REC claims it is exploring alternatives for the facility. The book value was already written down last year, whereas closure expenses will incur in Q2. The REC share has shot up 11% for the day.
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