REC Silicon - Third quarter 2016 results

Fornebu, Norway - November 2, 2016: REC Silicon ASA (REC Silicon) reported third quarter revenues of USD 50.9 million, compared to USD 71.1 million in the previous quarter. The lower revenues are primarily a result of the disruption of the solar grade polysilicon market due to the expiration of the 2015 feed in tariffs in China, which affected the entire value chain. The ongoing solar trade war between the US and China also continues to restrict REC Silicon's access to polysilicon markets in China. The corresponding EBITDA during the third quarter was a loss of USD 7.9 million compared to a loss of USD 14.3 million in the previous quarter.

The company also reported a September 30, 2016 cash balance of USD 86.8 million.  

Q3 polysilicon sales of 1,775 MT were in line with guidance given in the September 23, 2016 Trading Update.  Finished goods inventory increased by 2,132 MT during the third quarter.  

Silicon gas sales volumes increased to 772 MT compared to 610 MT in the prior quarter.

In order to maintain liquidity and manage inventory, the company is announcing additional cost cutting initiatives and has reduced production capacity utilization to approximately 50% at the Moses Lake facility.  As part of the cost cutting initiatives, the company is announcing a reduction in headcount of approximately 70 employees.  "We have been successful in maintaining sufficient liquidity during this period of market disruption. Because of our efforts to control costs, I expect REC Silicon to remain a low cost leader in the polysilicon industry, even at reduced production rates." said Tore Torvund, CEO.

The Yulin joint venture plant remains on target for start-up in the second half of 2017.  With regard to the company's joint venture payment obligations, the relevant agreements permit deferral of the $15 million second capital contribution until at least July 2017, and negotiations are underway with the joint venture partner to defer the company's second and third capital contributions, totaling $169 million, beyond 2018.  Without a resolution to the trade war and if REC is unable to make its contributions, the agreements also permit the company to forego making its remaining contributions, in which case, its equity position in the joint venture would be diluted accordingly.

For more information, please see the attached third quarter 2016 report.

Morning Program:
The company will give a presentation at 8:00 am CET today at Høyres Hus Konferansesenter, Stortingsgaten 20, Oslo, Norway. The presentation will be in English.

A live webcast from the presentation can be accessed at www.recsilicon.com or the following link: http://webtv.hegnar.no/presentation.php?webcastId=40091939

It will also be possible to listen to the presentation through a conference call. Please make sure to dial in 5-10 minutes prior to scheduled start time on one of the following numbers:

Norway (Toll Free): 800 51084
Norway (Local): +47 2350 0296
UK (Toll Free): 0800 358 6377
UK (Local): +44 (0)20 7026 5967
USA (Toll Free): 800 263 0877
USA (Local): + 1 719 457 1036
Other international: +44 (0)20 7026 5967
Please provide confirmation code 2617808 and state your name, company and country of residence.

Afternoon Program:
REC Silicon will host an analyst conference call later the same day at 3:00 p.m. CET. Please make sure to dial in at least 5-10 minutes ahead of time to complete your registration.

Norway (Toll Free): 800 51084
Norway (Local): +47 2350 0296
UK (Toll Free): 0800 358 6377
UK (Local): +44 (0)20 7026 5967
USA (Toll Free): 800 274 0251
USA (Local): +1 719 325 4759
Other international: +44 (0)20 7026 5967
Please provide confirmation code 7930972 and state your name, company and country of residence.

For further information, please contact:
Chris Bowes, Investor Relations
REC Silicon ASA
Phone: +1 509 793 8127
Email: chris.bowes@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 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

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