We at Greenworldinvestor have speculated numerous times that most solar companies based in Europe such as Solarworld will cease to exist. We even thought that REC would
have a tough time in surviving, given the massive losses in 2011 and
2012 with the massive debt. However, REC looks all set to survive as the
company is sharply cutting costs. The company has also restructured its
business by hiving off polysilicon production into a separate business.
The company has also reduced debt through talks with bond holders.
Even though REC is still not out of the woods
with an EBITDA margin of less than 10% on a revenue base of $175
million per quarter, the company is taking steps to remain competitive.
The company is cutting costs at a sharp rate to reach parity with the
Chinese cost leaders who have a 25% advantage on costs.
REC has closed almost all of
its expensive European manufacturing operations and is now
concentrating all its production at the integrated wafer to module
facility in Singapore. The company is running this 1 GW capacity at full
steam having shipped almost 225 MW of solar panels in the quarter. REC
has been helped by a general industry upturn, which has aided it in
finding high ASP markets in Japan and Europe.
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