OSLO (Reuters) - Norwegian solar equipment maker REC said on Wednesday demand for its products was strong and its key owner made clear REC shares were not for sale for now, lifting the stock to a three-month high.
Chief Executive Ole Enger added that REC still expected prices for its products to decline in 2011, but said the fall would “perhaps not be as big as previously expected.”
Shares in REC were up 2.18 percent at 19.67 crowns at 8:42 a.m. EST — the highest level since October 11 and outperforming a 0.5 percent rise in the Oslo bourse’s index.
“As far as the market is concerned, we have seen a very strong Q4 and demand has continued in Q1,” Enger told a renewable energy conference on Oslo.
Einar Kilde Evensen, a DnB NOR markets analyst, said Enger’s “confident statements” helped lift REC shares.
“I am happy to hear, as are investors, that prices are falling at a slightly slower rate than some had expected,” said Evensen. “Mr. Enger is a very cautious man, so I think it’s fair to believe him.”
Wednesday’s stock price rise follows a 4.5 percent hike on Tuesday after Norwegian conglomerate Orkla, which owns 40 percent of REC, agreed to sell the silicon operations of its Elkem unit to China National BlueStar for $2 billion.
Analysts said the Elkem deal removes pressure on Orkla to sell its REC holding to relieve debt. Orkla board chairman Stein Erik Hagen said REC “is no longer on our sale list,” newspaper VG reported.
On Tuesday, Orkla’s CEO told Reuters that REC’s share price was too low to sell and that it would develop the solar company over the short-term.
REC said in October it expected strong demand in late 2010 and early 2011, with global demand for solar energy expected to range from 14 to 16 gigawatts in 2011 — roughly the same as REC’s view for 2010 global demand of 15 GW.
REC is due to report fourth-quarter earnings on February 9.
Editing by David Cowell