REC's second quarter 2012 results

Sandvika, July 19, 2012: Renewable Energy Corporation ASA (REC) reported second quarter 2012 revenues from continuing operations* of NOK 1,987 million and EBITDA of NOK 267 million. Further operational improvement resulted in FBR cash production cost of 12.0 USD/kg and module cash cost of 71 Eurocents/watt. Net debt was reduced to NOK 4.1 billion in the quarter.
Despite high installation volumes, industry wide overcapacity continued to put pressure on market prices throughout the quarter. Compared to the previous quarter, REC's selling prices for polysilicon and modules were down eight percent.
After the permanent shut down of all production, REC Wafer is reported as discontinued operations* from the second quarter. REC's second quarter revenues from continuing operations were in line with the previous quarter, while EBITDA adjusted for special items was NOK 230 million, up from NOK 128 million in the previous quarter.
EBIT from continuing operations was NOK -3.7 billion in the second quarter, compared to negative NOK 75 million in the previous quarter. The second quarter EBIT includes impairment charges of NOK 3.6 billion, primarily related to fixed assets in Singapore based on revised external views on future prices.  
Loss after tax from continuing operations was NOK 3.7 billion in the second quarter, compared to loss of NOK 0.3 billion in the previous quarter. Loss after tax from total operations was NOK 4.1 billion, compared to loss of NOK 0.2 billion in the previous quarter.

EPS for total operations was NOK -4.07 and NOK -0.21 for the same periods.
In the second quarter REC generated net cash from total operating activities of NOK 0.6 billion, capex spend was NOK 0.1 billion and an increase in fair value of REC's convertible bond and currency effects negatively affected net debt by NOK 0.4 billion. Net debt was hence reduced by NOK 0.1 billion to NOK 4.1 billion. 
On July 4, 2012 REC announced a refinancing proposal that included an issue of new shares raising gross proceeds of NOK 1.3 billion through a successfully placed private placement, a subsequent repair offering of up to NOK 375 million and a new NOK 2 billion bank debt facility maturing in April 2014. The proposal for issuance of new shares through the private placement, the subsequent offering, and hence also the refinancing of the bank debt facility, is subject to final approval by the Extraordinary General Meeting to be held on July 27, 2012.
"I am very pleased to see further improvements operationally and financially and that we continue to generate positive cash flow under current market conditions. I am also grateful that our shareholders and banks continue to provide support as demonstrated through the proposed re-financing. The combination of a solid balance sheet and a strong market and cost position gives us the necessary strength to weather the current industry turmoil ", says Ole Enger CEO.

(*) From the second quarter 2012, external profit and loss items of REC Wafer are re-presented as discontinued operations, and the historic figures for most line items in the statement of income are re-presented and differ from what was previously reported. Line items and results presented for continuing and discontinued operations will not represent the activities of the operations as if they were standalone entities, for past periods or likely to be earned in future periods.

For more information, please see the attached first quarter 2012 report and presentation as well as a spreadsheet with detailed financial information.
More information on the proposed Subsequent Offering
The proposed Subsequent Offering will be directed towards existing shareholders of the Company as of July 3, 2012 (as documented by the shareholders' register in the Norwegian Central Securities Depository (the "VPS") as of July 6, 2012), who were not invited to participate in the Private Placement ("Eligible Shareholders"). Eligible Shareholders will be granted 0.6295 non-tradable subscription rights per share held as of July 3, 2012, that provide right to subscribe for, and be allocated, subject to applicable securities laws, one new share in the Subsequent Offering. Over-subscription is permitted for Eligible Shareholders. In the event not all issued subscription rights are exercised, oversubscribing shareholders will be allocated shares proportionally to the number of subscription rights they have exercised. Subscription without subscription rights will not be allowed.
Shareholders representing approximately 60 percent of shares were contacted in the Private Placement. This implies dilution of approximately 23 percent for eligible shareholders that participate in the Subsequent Offering, relative to their ownership previous to the Private Placement, assuming all Eligible shareholders subscribe for all subscription rights.
The subscription period for the proposed Subsequent Offering is expected to commence on or about August 20, 2012 and expire on or about September 3, 2012. The subscription price per Subsequent Offering Share is NOK 1.50, equal to the subscription price in the Private Placement.
Q2 reporting - morning program:

On the release day, President and CEO Ole Enger of REC will give a presentation together with other members of the management team. The presentation will take place at 08:00 hrs Norwegian time/CET at the conference centre Høyres Hus, Stortingsgata 20, 0161 Oslo, Norway.

The presentation, held in English, will be broadcasted live over the Internet, and can be accessed from: www.recgroup.com.

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

Confirmation code: 9506714

Norway Toll Free: 800 56 053
UK Toll Free: 0800 279 4841
USA Toll Free:  1877 249 9037
International Toll: [phone]

Q2 reporting - afternoon program:
REC will further host an analyst conference call with possibilities for questions and answers later the same day at 15:00 CET. Please make sure to dial in at least 5 minutes ahead of time to finalize your registration:

International dial in: [phone], please state your name and company.

Immediately after the call, a replay of the conference call will be made available. To access, please dial [phone] and use the following procedure:

1. Type pincode 1524 followed by # (pound-sign)
2. Continue by typing reference number 524 followed by # (pound-sign)

For more information, please contact;
Mikkel Tørud, VP & IRO; [phone]

About REC

REC is a leading vertically integrated solar energy company. REC produces polysilicon, wafers, cells and modules for the solar industry, and silicon materials for the electronics industry. REC also engages in project development in selected PV segments. Founded in Norway in 1996, REC employs around 3,100 people globally with revenues of more than NOK 13 billion in 2011. Please visit www.recgroup.com to learn more about REC.

REC Q2 financial information
REC Q2 report
REC Q2 presentation

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Source: Renewable Energy Corporation ASA via Thomson Reuters ONE

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