In an update to its business divisions trading conditions, REC Group didn’t have much positive to say. Its polysilicon production ramp at Silicon III, which had initial ramp problems will struggle to meet full year output targets, while its wafer division is having to further revise pricing for 2010 due to the weak market, impacting profit margins. On the solar module front, REC noted that prices are expected to have fallen 35% in 2009 as the glut in finished products continues.
Even its joint venture operation, Sovello is not immune from trouble. REC said that Sovello continued not to be in compliance with all its financial covenants since the end of 2008 and continues to look for long-term financing for the company.
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However, REC reiterated that the construction costs of its new facility in Singapore continued to require lower capital requirements due to the lower construction activity in the Island State. Ramp-up is still expected to begin in the first half of 2010.