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Odyd q4 had account recivables for modules instead of into cashflow, it also had system revenue that was not recognized. For people who dont know whats going on its not easy to see. Basically since they needed ebitda of 300 mil nok for q1 and q2 they rigged themself to have good cashflow in q1. What I am saying is a lot of module revenue was not recognized in q4 and will be in q1. Same with system revenue.

Now with two one offs of 27 mil $ then later now also a tax benifit of 16 mil $ the ebitda for q1 and q2 is secured. They got a one off from silane contract that was renegotiated (stil kept the customer) and they also won a tax case in US.

Regarding the other comment that previous investor got screwed i just had to laugh, i dont care a single cent if the company wrote down asset value, it matters zero to me what the value is on paper, what matters is what other people would buy the asset for. My current valueation is around 12 billion nok or some 6 nok per stock. For example, rec solar now has property plant and equipment value of 779 million nok but will probably earn attleast 500 mil nok in q1-q4 2013. So basically everyone will see that the valuation is too low. And I am not pulling numbers out of a magic hat, I have done the numbers. with 52 eurocent end of q1 target from 58 i assume 55 average. Production cost will be -7 eurocents so 48 eurocents. Cashflow will be at 53 eurocents (deducting deprecation) Rec have had 10% price premium likly to rise because of increased japan market share, lets say 15% price premium from average of pvinsight. This gives around 15 million $ cash flow at 200 MW sold (only 170 estimated produced in q1 but they still have a bit inventory to chew through.) + the revenue from rec solar and system from q4 that was put in account recivables (modules) and not put at all into revenue yet (systems)

Q1 will be amazingly good for rec on module side and still lagging slightly on silicon side.

Silicon will have cashcost around 15 including sg&a r&d and asp is lookint to be something like 17$/kg now so not that impressive. 16500 MT FBR rest electronic grade EG 3500 MT now. EG cash cost 25$/kg but much higer ASP since in the semiconductor buisness. Silane gass prices pressured so this one has less cashflow now but still positive. (I dont want to give an exact number as I have seen many numbers myself and cant and wont pinpoint the number.)

Basicaly my conclusion is otherwise than odyd12. I belive cashflow will be strong going forward.

Quoted from "odyd12"

do not know what this means please explain. Increase in the receivables is a deduction in the cash flow from operating activities. If something is not recognized in revenue, it is also not recognized in cost on the income statement. Are you saying something else, please let me know?

Account recivables is not cashflow obviously (since its not yet converted to cash) so the cashflow from it will be realized in q1 if they continue the historic trend of very few defaults on account recivables. Unless I am mistaken this means they will have the chance for even more positive cashflow in q1 + the modules they are allready selling in this quarter? What I mean is if they get the cash from modules sold on credit in q4 and get cash from modules sold in q1 they will get a lot more increase in cash q1 than i q4. Or as REC writes itself in the report: "EBITDA for total operations in the fourth quarter 2012 was negative NOK 42
million whilst net cash flow from operating activities for total operations was
negative NOK 178 million, a difference of negative NOK 136 million. Negative
effect of increase in receivables, primarily due to high sales at the end of the
quarter, reduction of payables and net payment of interest was partially
offset by reduction of inventories and realized gains on derivatives"
(page 10) Hopefully this high end of quarter revenue / account recivables will be realized as positive cashflow in q1.

And Rec System: Dont take my word from it take the q4 report itself:
http://www.recgroup.com/PageFiles/12233/…Q4%20report.pdf

". REC
Systems has in 2012 recognized revenues of NOK 164 million, and has
unbilled amounts of construction contract revenues of NOK 55 million and
payables of NOK 7 million to Sella Group at December 31, 2012."
(page 11)
This one i am 100% clear on. UNBILLED. So this will become cashflow later. It has never been on the revenue or cashflow statment yet.

And if you belive rec has bad operational performence I strongly disagree. Again let me quote the rec q4 report:
"Net cash flow from operating activities for total operations was negative NOK
178 million in the fourth quarter and positive NOK 1,292 million for the year
2012 compared to positive NOK 600 million and NOK 3,098 million for the
same periods in 2011, respectively."
http://www.recgroup.com/PageFiles/12233/…Q4%20report.pdf page 10.

When you know that q4 had a lot of modules sold end of quarter not yet realized as cash and rec system not yet billing Sella you know that they are rigging up q1 to be a good cashflow quarter. Also there are two one offs comming. One for sure in q1 and the other maybe q1 or q2:

http://finance.yahoo.com/news/rec-receiv…-070202480.html
(notice they kept the customer)

http://www.columbiabasinherald.com/polit…a.html?mode=jqm
(either a tax benift of 16 million $ or 16 mil $ in cash, will be decided before april 2013.)

With total cash cost including sg&a (only thing I have not accounted for is interest costs affecting cashflow) at around 0.68$/watt (reported as target in q3, but they have later said they have new custom orders from japan that cost more to produce so the exact number for q1 is still not sure) in q1 and ASP looking like its going to average 0.75$/watt (histori trend of 10% higher than average of pvinsight, speculated to increase due to more sales in Japan.) they are getting positive cashflow of 7 cents per watt. Lets assume they only sold what is produced in quarter 170MW that is still 12 mil $.

Polysilicon is looking like its heading for an average of 17$/kg in the quarter. This will give rec around 2$/kg positive cashflow. (again including all cash cost with the exeption of interest cost) With 4125 MT FBR this means 8.25 mil $ from the FBR. Then we have the silane and eg and floatzone that have been up to 20 mil $ but latly more down to 5-10 mil $. But if you put these together with the one off q1 is looking very strong.

(one off silane sale is 27 mil $)
Rec solar 12 mil $
Rec silicon: 8.25 mil $ fbr
Rec silicon: 5 mil EG, FZ and Silane.
Total positive cashflow q1: 52,25 mil $

Q2 is allready rigged with +16 mil $ from tax deductions if the tax authority decided to pay in cash instead of later tax deductions.

Let me again stress why good cashflow and also good EBITDA is important for rec in q1 and q2. Rec is renegotiating bank loan now for expansion and they want to not breach the bank loan convanants (they have not lended any of the 2 billion nok they could lend from the bank) and the covenant is that ebitda should be 300 mil nok or more for the sum of q1 and q2 taken together.
It is my speculation this is the reason all the one off deals are comming in now, also that rec systems has unbilled revenue, and that they sold modules on credit in q4 that will be recognized as revenue/cashflow in q1. Please also note the undrawn bank facility has maturity date in 2014 so the negotations is about extending it in time.

Finaly just in the action of rec latly, does it seem like they are expeting bad operational performence going forward?
http://www.pv-magazine.com/news/details/…/#ixzz2MO2A9Rtv

I mean they are expanding into more selective emitter technology (the centrotherm diffusion technology is good for selective emitter designs), allready expanded in backside passivation and are stating:
"Overall, REC is targeting 850 MW of solar module production this year to meet expected demand increases, particularly from Japan and the rest of Asia."

im sorry odyd i didnt answer your question. I agree on.what you said about account recivables. My only point was about this affecting future cashflow. Anyhow I seem to derailed the thread a bit so please continue where you headeda off. Good discussion. I only commented REC since it was a discussion about its operational performance too, and decided to offer my own view about this.