REC ASA - Secures NOK 5 billion in silane sales...
Sandvika, July 18, 2008: To support the increasing demand for silane
gas from the electronic and solar industries, REC has entered into a
number of significant long-term agreements for the supply of
monosilane gas to major gas distributors. Under the agreements, REC
will through 2014 deliver gas worth close to USD 1 billion (~NOK 5
billion).
REC Silicon, the world's largest producer and seller of monosilane
gas, has signed a number of new long-term agreements with existing
customers (major gas distributors) for the supply of monosilane gas
(SiH4).
The agreements, most of which run through 2014, are structured as
take-or-pay contracts with pre-determined prices and volumes for the
entire contract period. The contracts have an approximate value of
USD 1 billion (~NOK 5 billion). Additional volumes are contemplated
under the agreements and may be accessed by the customers within the
contracts framework.
After these agreements have been entered into, substantially all the
silane capacity that REC intends to allocate to the merchant market
is contracted through 2009. Additional volumes could be allocated
from 2010 dependant on the development of end-user markets. For the
period 2010-2014, these agreements constitute around 35-50% contract
coverage compared to anticipated potential volume allocation - REC
will seek to increase this percentage by further implementation of
the long term take-or-pay contract strategy. In addition to the
silane contract coverage, more than 90% of REC's polysilicon revenues
through 2013 are already under contract through REC's own value chain
and with external customers.
"By contracting for these volumes, REC gains further visibility on
future revenues and earnings and will continue to safely supply
monosilane gas to the rapidly growing solar and semiconductor
markets", says Erik Thorsen, President & CEO.
Deliveries have already begun and the average sales price under the
new contracts is around 15% higher than the current average
monosilane gas sale price. The contracts further outline smaller
annual price adjustments based on actual cost developments as well as
include the security of bank guarantees covering a significant part
of the contract volumes.
"REC has 25 years experience in safe manufacture, trans-filling, and
distribution of this ubiquitous molecule that provides the vital
silicon material present in thin film solar panels, crystalline solar
cells, computers, displays, etc. and REC targets to maintain a
leading position in this market", says Goran Bye EVP of REC Silicon.
About REC
REC is uniquely positioned as one of the most integrated companies in
the solar energy industry. REC Silicon and REC Wafer are the world's
largest producers of polysilicon and wafers for solar applications.
REC Solar produces solar cells and solar modules and engage in
project development activities in selected segments of the PV market.
REC Group had revenues in 2007 of NOK 6,642 million and an operating
profit of NOK 2,588 million. Please also see www.recgroup.com
For further information please contact:
Erik Thorsen, President & CEO; +47 907 56 685
Jon André Løkke, SVP & Investor Relations Officer; +47 907 44 949
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