Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- REC Silicon ASA (RNWEF, Financial) has signed a multiyear contract with Sila for supplying Silane, indicating potential future revenue streams.
- The company is actively working on improving product quality to meet original specifications, which could enhance future operational efficiency.
- REC Silicon ASA is seeing consistent growth in the amount of Silane going into silicon anodes, suggesting a growing market demand.
- The company is exploring various financing scenarios to ensure liquidity and operational continuity.
- REC Silicon ASA is in discussions with multiple companies for potential supply agreements, indicating proactive market engagement.
Negative Points
- The company reported an EBITDA loss of $42.7 million, primarily due to startup costs and weaker operational results.
- Qualification of Moses Lake polysilicon has been delayed, impacting production and revenue potential.
- Global PV slowdown and trade concerns have significantly affected Silane shipments, reducing sales volumes.
- The Moses Lake facility is operating at only 15% capacity, which is not optimal and affects ramp timing.
- There is uncertainty around the timing and results of product qualification, which could impact future operations and financial performance.
Q & A Highlights
Q: Was the testing facility and country where the testing takes place selected by REC Silicon or was that REC Silicon's customer?
A: Kurt Levens, President, Chief Executive Officer: This process is controlled by our customer. It is customary in these cases, and the chosen facility was the most favorable option available to our customer.
Q: Are there any options for the testing to take place in another country?
A: Kurt Levens, President, Chief Executive Officer: Not at the current time.
Q: Will REC Silicon receive the tax credits at the same time as when the polysilicon is sold for Moses Lake?
A: Jack Yun, Chief Financial Officer: When we sell, we recognize the tax credit as part of the income every month.
Q: Will REC Silicon receive a 10% tax credit on Silane sold that is used for energy storage?
A: Kurt Levens, President, Chief Executive Officer: Under the current interpretation, yes, that is the case.
Q: It has been noticed that the open REC positions have been removed from job boards recently. Can you comment on that? And do you expect any layoffs?
A: Kurt Levens, President, Chief Executive Officer: We are focusing on conserving cash and are in a turndown mode, so it does not make sense to continue hiring at this time. We need to remain balanced with the personnel required for our current operations.
Q: Group14 announced its intention to construct its own Silane plant. Was this announcement a surprise to REC Silicon? Do you expect to serve as a supplier to Group14 until their facility is operational?
A: Kurt Levens, President, Chief Executive Officer: The announcement was not a surprise, although the timing was unknown. There are opportunities for cooperation, and we are prepared to participate if terms align.
Q: Are we still producing polysilicon in Butte?
A: Kurt Levens, President, Chief Executive Officer: Yes, we are finishing material that was harvested before and conducting small reactions to characterize impurities in our Silane gas.
Q: Can you comment on any more detail for contingency plans if the testing is not successful or is significantly delayed?
A: Kurt Levens, President, Chief Executive Officer: We are working on various scenarios for differing financing options and utilizing this time to improve product quality to meet initial purity specifications.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
