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Introduction & Market Context
REC Silicon ASA (OTC:RECSI) presented its second quarter 2025 results on August 22, 2025, highlighting a return to positive EBITDA despite continued revenue challenges and market uncertainties. The silicon materials company, which provides enabling materials for the digital revolution and energy industry, faces ongoing headwinds from trade actions and reshoring delays that continue to impact its business outlook.
The presentation comes as Hanwha/Anchor AS increases its stake in the company through a recently completed voluntary offer and subsequent mandatory share offer at NOK 2.20 per share. REC Silicon’s stock closed at NOK 2.19 on August 21, 2025, reflecting market alignment with the offer price.
Quarterly Performance Highlights
REC Silicon reported a significant improvement in EBITDA for Q2 2025, posting $4.9 million from continuing operations compared to a loss of $1.5 million in the same quarter last year. This improvement came despite total revenues declining to $19.9 million, down from $36.4 million in Q2 2024.
Silicon gas sales volumes showed modest quarter-over-quarter growth but remained significantly below prior year levels. The company shipped 570 MT in Q2 2025, slightly up from 560 MT in Q1 2025, but well below the 654 MT shipped in Q2 2024.
As shown in the following chart of quarterly silicon gas sales volumes, the company has experienced a substantial decline from peak volumes seen in early 2024:
Detailed Financial Analysis
The company’s financial results reveal a mixed performance across its business segments. While overall EBITDA improved, Butte operations reported negative EBITDA of $0.3 million in Q2 2025, a significant decline from the positive $7.0 million reported in Q2 2024. This was offset by Moses Lake operations, which contributed $9.6 million in EBITDA during the quarter.
The comprehensive earnings breakdown shows the stark contrast between business segments and highlights the year-over-year revenue decline:
Butte operations, which represent the core of current revenue generation, showed continued deterioration in both revenue and profitability. The following chart illustrates this concerning trend:
Cash flow remains a critical challenge for REC Silicon. The company reported a cash balance of $8.3 million as of June 30, 2025, representing an $8.5 million decrease during the quarter. Operating activities consumed $15.7 million in cash, partially offset by $8.7 million from financing activities.
The waterfall chart below illustrates the various factors affecting the company’s cash position during Q2 2025:
Strategic Initiatives and Challenges
REC Silicon faces significant financial challenges, with a debt maturity profile heavily weighted toward 2026. The company’s nominal debt stands at $455.6 million, with $408.3 million maturing in 2026. This looming debt wall, combined with the current cash position of just $8.3 million, underscores the urgency of the company’s financing efforts.
The debt maturity profile is illustrated in the following chart:
The company has secured an additional $13.0 million short-term loan from Hanwha International LLC in Q3, maturing on January 24, 2026. However, management explicitly acknowledged that "REC Silicon does not have sufficient available cash to meet debt service and other operating cash flow requirements without continued support from Hanwha or additional sources of capital."
Strategic initiatives include ongoing restructuring and cost reduction efforts, particularly at the Moses Lake site, optimization of Butte operations, and targeted disposal of non-core assets in 2025. The company is also discussing additional financing with Hanwha, including potential restructuring of the $413 million term loans maturing in 2026.
The ownership landscape is changing as Hanwha/Anchor AS completed its voluntary offer for shares on July 14, receiving acceptances for 43.94% of outstanding shares. A mandatory share offer for the remaining shares was launched on July 31, 2025, at an offer price of NOK 2.20, with the offer period expiring on August 29, 2025.
Forward-Looking Statements
Looking ahead, REC Silicon expects quarter-on-quarter cost reductions to continue through the end of the year. The company has set a Q3 2025 silicon gases shipment target of 550-600 MT, suggesting relatively stable volumes compared to Q2.
Management emphasized that global trade and market uncertainties continue to impact the timing of expansions and sales growth. This aligns with the Q1 2025 earnings report, which noted challenges from trade actions and weak channel inventories affecting demand.
The company’s immediate focus remains on securing both short and long-term financing options, which are described as "still in progress." This financing uncertainty, combined with the substantial debt maturities in 2026, presents significant challenges despite the operational improvements seen in Q2 2025.
REC Silicon’s ability to navigate these financial challenges while maintaining operational improvements will be crucial for the company’s long-term sustainability, particularly as Hanwha increases its ownership stake and influence over the company’s strategic direction.
Full presentation:
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