ReneSola Announces Fourth Quarter and Full Year 2015 Results

Mar 08, 2016, 07:49 ET from ReneSola Ltd.

SHANGHAI, March 8, 2016 /PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company") (www.renesola.com) (NYSE: SOL), a leading fully-integrated solar project developer and provider of energy efficient technology products, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2015.

Fourth Quarter 2015 Highlights

Q4 2015

Q/Q Change

Y/Y Change

Revenue

$296.4

-19.5%

-23.4%

Gross Profit

$47.5

-20.0%

-7.3%

Operating Income

$16.9

+48.3%

N/A

Net Income

$6.7

-22.6%

N/A

  • Revenue of $296.4 million exceeded management guidance range of $275-$295 million
  • Sold 18.0 MW of projects, project pipeline at 641 MW
  • Total external solar module shipments were 373.2 MW
  • Operating expense control drives strong operating profit growth
  • Operating margin expanded to 5.7% from 3.1% in Q3 2015 and -0.6% in Q4 2014
  • Total debt reduced by $16.8 million compared to Q3 2015

Full Year 2015 Highlights

2015

2014

Y/Y Change

Revenue

$1,282.0

$1,561.5

-17.9%

Gross Profit

$187.9

$209.3

-10.2%

Operating Income

$29.3

$8.2

+256.6%

Net Loss

($5.1)

($33.6)

N/A

  • Revenue of $1.28 billion down 18% from $1.56 billion in 2014
  • Sold 72.8 MW of projects
  • Total external solar module shipments were 1.6 GW
  • Gross margin increased to 14.7% from 13.4% in 2014
  • Operating income grew 257% to $29.3 million from $8.2 million in 2014
  • Net loss attributable to holders of ordinary shares narrowed significantly to $5.1 million from $33.6 million in 2014

"We are proud that we delivered on our strategy in 2015, making significant progress in transforming ReneSola from a solar product manufacturer to a multi-faceted participant across the green energy value chain," commented Mr. Xianshou Li, ReneSola's Chief Executive Officer.  "Our full-year 2015 results demonstrated the wisdom of our strategy.  We increased gross margin for the third straight year, and reduced operating expenses on an absolute basis for the second straight year.  This resulted in operating profit tripling from 2014, and a significantly reduced net loss.  Revenue declined somewhat, but this was mainly due to reduced shipments to external customers, as we strategically directed more shipments to our own downstream projects.  Our solid P&L performance enabled a reduction in debt of $59 million.  Effective management of or working capital and improved balance sheet strength remains a key focus for our team and a long-term commitment to our shareholders.  We expect to pay down more debt in the quarters ahead."

Li continued, "We enter 2016 on a high note as a global leader across the solar value chain.  We are profitable since Q3 2015, with over 600 MW of projects under development, and a burgeoning new business in LED distribution.  We remain positive on our downstream strategy and excited about the business opportunities ahead of us.  We continue to believe ReneSola can achieve an attractive growth rate by developing solar projects in attractive markets, and our entire team remains focused on building a great foundation to increase shareholder value in 2016 and beyond."

Fourth Quarter 2015 Financial Results

Revenue of $296.4 million was down 19.5% q/q and 23.4% y/y and slightly exceeded guidance of $275-$295 million.  The revenue decline reflects lower ASP and lower shipments to external customers.

Gross profit of $47.5 million was down 20.0% q/q and 7.3% y/y. Gross margin expanded to 16.0% when compared to the fourth quarter of 2014, but was down slightly sequentially.  The margin decline in the quarter was attributable to the cost associated with the annual maintenance in our polysilicon plant, partially offset by lower production cost and the above-corporate-average gross margin generated from our project sales in the quarter.  Gross margin in Q4 2015 was below guidance of 17-18% as a result of the change in the timing of the annual maintenance in our polysilicon plant which was moved to Q4 2015 from Q1 2016.

Operating expenses of $30.5 million were 10.3% of revenue, down from 13.0% in Q3 of 2015 and from 13.8% in Q4 of 2014.  

Operating income was $16.9 million, compared to operating income of $11.4million in Q3 of 2015 and operating loss of $2.2 million in Q4 of 2014.  Operating margin expanded sequentially to 5.7% from 3.1% in Q3 of 2015.

Non-operating expenses of $9.2 million include net interest expense of $9.8 million and loss on derivative of $1.2 million, offset by foreign exchange gains of $2.1 million.

Net income was $6.7 million, which compares to a net income of $8.6 million in Q3 of 2015 and a net loss of $8.1 million in the prior-year period.  Earnings per ADS were $0.07.

Balance Sheet, Liquidity and Capital Resources

ReneSola continued to closely manage working capital.  The Company had cash and equivalents (including restricted cash) of $178 million as of year-end.  During the quarter, the Company used operating cash flow to reduce total debt by $16.8 million, to $734 million.  The Company had approximately $26.1 million in convertible bonds outstanding as of December 31, but repurchased $20.5 million more subsequent to the end of the quarter.  Note that the holders of the remaining $5.6 million of convertible bonds can exercise the put options through expiration before March 14, 2016. 

Full Year 2015 Financial Results

Revenue of $1.28 billion was down 17.9% y/y. 

Gross profit of $187.9 million was down 10.2% y/y. Gross margin expanded to 14.7% from 13.4% in 2014.

Operating expenses were $158.6 million, or 12.4% of revenue, compared to $201.1 million, or 12.9% in 2014.

Operating income was $29.3 million, or 2.3% of revenue, compared to $8.2 million, or 0.5% in 2014.

Non-operating expenses of $33.7 million include net interest expense of $40.5 million, foreign exchange loss of $2.1 million and loss on derivative of $6.0 million offset by gains on repurchase of convertible bonds of $13.7 million in 2015.

Net loss was $5.1 million, which compares to net loss of $33.6 million in 2014.  Net loss per ADS was $0.05.

Fourth Quarter Operating Highlights

Since disclosing its strategic shift to project development at the start of 2015, the Company has focused its efforts on developing, operating and selling high-quality solar power projects.  Activity is centered on building a pipeline of distributed generation and utility-scale projects in attractive geographies worldwide.  In the fourth quarter the Company continued to execute on the monetization phase of the development cycle.

Project Sales

The Company recognized revenue of $33.8 million from the sale of solar power projects. The revenue was comprised of new sales in the quarter of three projects representing 18.0 MW of generating capacity.  The sales generated gross margins above the Company average. 

Project Sales

Location

Size (MW)

Membury

UK

16.5

Tochigi Projects- 2

Tochigi Japan

1.5

Operating Assets

The company owns and operates four solar power-producing projects it developed earlier in the decade.  The Company considers the operating projects to be economically attractive, because they produce a steady stream of high margin recurring revenue.  Currently the Company is holding its operating assets for eventual sale, since it is pursuing a build-operate-transfer model.  The Company is currently negotiating the sale of its two projects in Bulgaria, and expects to reach final agreement in the near future.

IPP Assets

Location

Size (MW)

Nove  Eco

Bulgaria

5.0

MG Solar

Bulgaria

4.7

Lucas EST

Romania

6.0

Ecosfer Energy

Romania

9.4

Project Pipeline

The company currently has 641 MW of projects in various stages of development. The geographic distribution of projects is outlined in the table below.

Project Location

Size (MW)

Status

USA

                  1031

Development pipeline

UK

111

54MW under construction

Japan

31

29MW under construction

France

4

Development pipeline

Thailand

65

Development pipeline

Poland

140

Development pipeline

Canada

32

5MW under construction

Turkey

20

Development pipeline

Spain

75

Development pipeline

Egypt

60

Development pipeline

Total

641

 

1 Of the total U.S. pipeline, 88 megawatts are currently subject to a dispute with our joint venture partner, Pristine Sun, LLC. The relevant parties intend to engage in mediation at the end of March 2016 in an attempt to amicably resolve the dispute.

Modules and Wafers

The Company continues to fully utilize its capacity by providing high quality products with lower cost to select customers.  The Company considers its competitive advantages to be improving conversion efficiency and supply chain management.

During the fourth quarter, total solar module shipments were 373.2 MW, representing a decrease of 8.0% from Q3 2015. Total wafer shipments were 270.3 MW, down 20.9% q/q and up 5.6% y/y.

In 2015, total solar module shipments were 1.60 GW, representing a decrease of 18.9% from 2014.  Total wafer shipments were 1.09 GW, up 28.7% y/y.

LED

During the fourth quarter, ReneSola's LED business reached revenue of $4.9 million, up from $3.6 million in Q3 2015, and delivered gross margin of over 30%.

The energy efficiency market is a very large and growing market, and LED lighting is a critical element.  A key strategic focus of the Company is to grow its share of the high-growth LED market by expanding its world-wide distribution channels.

Outlook

For Q1 2016, the Company expects revenue in the range of $260 to $270 million and gross margin to be around 17%.

For full year 2016, the Company expects revenue in the range of $1.0 to $1.2 billion.  The revenue outlook reflects continued shift of OEM module production from external sales and toward proprietary project development to pursue high profit.

Conference Call Information

ReneSola's management will host an earnings conference call on March 8, 2016 at 8:30 a.m. U.S. Eastern Standard Time (9:30 p.m. China Standard Time).

Dial-in details for the earnings conference call are as follows:

Phone Number

Toll-Free Number

United States

+1 8456750437

+1 8665194004

Hong Kong

+852 30186771

+852 800906601

Mainland China

+86 8008190121

+86 4006208038

Other International

+65 67135090

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is 57532798.

A replay of the conference call may be accessed by phone at the following numbers until March 16, 2016.  To access the replay, please again reference the conference passcode 57532798.

Phone Number

Toll-Free Number

United States

+1 6462543697

+1 8554525696

Hong Kong

+852 30512780

+852 800963117

Mainland China

+86 8008700206

+86 4006322162

Other International

+61 281990299

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of ReneSola's website at http://www.renesola.com.

About ReneSola

Founded in 2005, and listed on the New York Stock Exchange in 2008, ReneSola (NYSE: SOL) is an international leading brand and technology provider of energy efficient products. Leveraging its global presence and expansive distribution and sales network, ReneSola is well positioned to provide its highest quality green energy products and on-time services for EPC, installers, and green energy projects around the world. For more information, please visit www.renesola.com.

Safe Harbor Statement

This press release contains statements that constitute ''forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Whenever you read a statement that is not simply a statement of historical fact (such as when the Company describes what it "believes," "expects" or "anticipates" will occur, what "will" or "could" happen, and other similar statements), you must remember that the Company's expectations may not be correct, even though it believes that they are reasonable. The Company does not guarantee that the forward-looking statements will happen as described or that they will happen at all. Further information regarding risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements is included in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's annual report on Form 20-F. The Company undertakes no obligation, beyond that required by law, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, even though the Company's situation may change in the future.

For investor and media inquiries, please contact:

In China:

ReneSola Ltd Ms. Rebecca Shen +86 (21) 6280-9180 x106 ir@renesola.com

The Blueshirt Group Asia Mr. Gary Dvorchak, CFA +86 (138) 1079-1480 gary@blueshirtgroup.com

In the United States:

The Blueshirt Group  Mr. Ralph Fong +1 (415) 489-2195 ralph@blueshirtgroup.com

 

 

 RENESOLA LTD 

 Unaudited Consolidated Balance Sheets 

 (US dollars in thousands) 

Dec 31,

Sep 30,

Dec 31,

2015

2015

2014

 ASSETS 

 Current assets: 

 Cash and cash equivalents  

38,045

86,489

99,848

 Restricted cash  

140,338

146,533

121,862

 Accounts receivable, net of allowances for doubtful accounts 

161,166

128,143

125,743

 Inventories 

193,171

198,857

357,361

 Advances to suppliers-current 

18,480

37,889

27,494

 Amounts due from related parties 

111

118

452

 Value added tax recoverable 

24,525

13,310

30,514

 Prepaid income tax 

3,609

1,814

1,247

 Prepaid expenses and other current assets  

27,770

31,284

44,252

 Project assets 

20,214

23,345

37,040

 Deferred convertible notes issue costs-current  

35

76

661

 Derivative assets 

56

224

1,688

 Assets held-for-sale 

4,241

-

-

 Deferred tax assets-current, net 

5,989

4,504

11,368

 Total current assets  

637,750

672,586

859,531

 Property, plant and equipment, net 

630,462

667,377

750,298

 Prepaid land use right, net 

37,240

38,923

39,574

 Deferred tax assets-non-current, net 

10,238

15,699

8,462

 Deferred convertible notes issue costs-non-current 

-

-

138

 Advances for purchases of property, plant and equipment  

382

677

1,756

 Deferred project costs 

20,874

20,874

-

 Other long-lived assets 

9,373

9,747

9,249

 Total assets  

1,346,319

1,425,883

1,669,008

 LIABILITIES AND SHAREHOLDERS' EQUITY 

 Current liabilities: 

 Convertible bond payable-current 

26,145

26,145

-

 Short-term borrowings  

668,788

685,311

654,675

 Accounts payable  

300,176

321,239

461,499

 Advances from customers-current 

28,101

58,218

84,412

 Amounts due to related parties  

2,677

2,716

7,570

 Other current liabilities  

77,237

90,786

126,623

 Income tax payable 

130

128

123

 Derivative liabilities 

30

-

-

 Warrant liability 

578

263

1,890

 Total current liabilities  

1,103,862

1,184,806

1,336,792

 Convertible notes payable-non-current  

-

-

94,599

 Long-term borrowings  

38,777

39,008

43,452

 Advances from customers-non-current 

-

936

 Deferred revenue 

32,376

30,541

-

 Warranty  

36,023

37,159

31,778

 Deferred subsidies and other 

23,242

23,904

25,347

 Other long-term liabilities  

105

149

946

 Total liabilities  

1,234,385

1,315,567

1,533,851

 Shareholders' equity 

   Common shares  

477,965

478,527

476,766

   Additional paid-in capital  

8,339

7,516

7,512

   Accumulated loss 

(435,277)

(441,933)

(430,202)

   Accumulated other comprehensive income  

60,907

66,206

81,080

 Total equity attribute to ReneSola Ltd 

111,934

110,316

135,156

 Total  shareholders' equity 

111,934

110,316

135,156

 Total liabilities and shareholders' equity  

1,346,319

1,425,883

1,669,008

 

 

RENESOLA LTD

Unaudited Consolidated Statements of Income

(US dollar in thousands, except ADS and share data)

Three Months Ended 

Twelve Months Ended

Dec 31, 2015

Sep 30, 2015

Dec 31, 2014

Dec 31, 2015

Dec 31, 2014

Net revenues

296,388

368,239

386,968

1,282,031

1,561,497

Cost of revenues 

(248,917)

(308,901)

(335,733)

(1,094,157)

(1,352,214)

Gross profit

47,471

59,338

51,235

187,874

209,283

GP%

16.0%

16.1%

13.2%

14.7%

13.4%

Operating (expenses) income:

Sales and marketing 

(12,465)

(19,861)

(23,338)

(72,295)

(93,067)

General and administrative 

(15,211)

(14,825)

(16,051)

(59,290)

(67,294)

Research and development 

(9,518)

(9,803)

(13,571)

(43,905)

(52,575)

Other operating income

6,651

(3,436)

(440)

16,920

11,870

Total operating expenses 

(30,543)

(47,925)

(53,400)

(158,570)

(201,066)

Income (loss) from operations 

16,928

11,413

(2,165)

29,304

8,218

5.7%

3.1%

-0.6%

2.3%

0.5%

Non-operating (expenses) income:

Interest income 

544

656

1,172

2,875

5,010

Interest expense

(10,352)

(11,047)

(12,273)

(43,418)

(49,016)

Foreign exchange gains (losses)

2,056

5,695

(13,501)

(2,138)

(27,009)

Gains (losses) on derivatives, net

(1,159)

(620)

4,359

(6,031)

6,058

Investment gain on disposal of subsidiaries

-

-

4,895

-

8,253

Gains on repurchase of convertible bonds

-

1,891

7,048

13,694

7,048

Fair value change of warrant liability

(315)

788

4,672

1,314

7,455

Income (loss) before income tax, noncontrolling interests

7,702

8,776

(5,793)

(4,400)

(33,984)

Income tax (expense) benefit

(1,046)

(179)

(2,262)

(675)

350

Net income (loss)

6,656

8,597

(8,055)

(5,075)

(33,634)

Less: Net income (loss) attributed to noncontrolling interests

-

-

-

-

(4)

Net income (loss) attributed to holders of ordinary shares

6,656

8,597

(8,055)

(5,075)

(33,630)

Earnings per share

  Basic

0.03

0.04

(0.04)

(0.02)

(0.17)

  Diluted

0.03

0.04

(0.04)

(0.02)

(0.17)

Earnings per ADS

  Basic

0.07

0.08

(0.08)

(0.05)

(0.33)

  Diluted

0.07

0.08

(0.08)

(0.05)

(0.33)

Weighted average number of shares used in computing loss per share

  Basic

203,137,831

204,658,446

203,777,464

204,085,041

203,550,049

  Diluted

203,137,831

204,658,446

203,777,464

204,085,041

203,550,049

Three Months ended

Twelve Months Ended

Dec 31, 2015

Sep 30, 2015

Dec 31, 2014

Dec 31, 2015

Dec 31, 2014

Net income (loss)

6,656

8,597

(8,055)

(5,075)

(33,634)

Other comprehensive income (loss)

Foreign exchange translation adjustment

(5,299)

(13,834)

(3,872)

(20,173)

(2,534)

Other comprehensive income (loss)

(5,299)

(13,834)

(3,872)

(20,173)

(2,534)

Comprehensive income (loss)

1,357

(5,237)

(11,927)

(25,248)

(36,168)

Less:comprehensive loss attributable to non-controlling interest

-

-

-

-

(4)

Comprehensive income (loss) attributable to ReneSola

1,357

(5,237)

(11,927)

(25,248)

(36,164)

 

RENESOLA LTD

Unaudited Consolidated Statements of Cash Flow

(US dollar in thousands)

 For the year ended December 31, 

2015

2014

Operating activities:

Net loss

(5,075)

(33,634)

Adjustment to reconcile net loss to net cash provided by (used in) operating activity:

  Inventory write-down

620

808

  Depreciation and amortization

90,113

90,224

  Amortization of deferred convertible bond issuances costs and premium

765

933

  Allowance of doubtful receivables, advance to suppliers and prepayment for purchases of property, plant and equipment

(1,794)

5,710

  Loss on derivatives

6,031

(6,058)

  Fair value change of warrant liability

(1,313)

(7,455)

  Gain from settlement of certain payables

(9,126)

  Gain from advances from customers

  Share-based compensation

1,527

2,240

  Loss on disposal of long-lived assets

308

1,486

  Gain on disposal of land use right

-

(64)

  Impairment of goodwill

  Impairment of Intangible assets

  Impairment of  long-lived assets

4,350

-

  Reversal of firm purchase commitment

  Gain on disposal of  subsidiaries

(8,253)

 Gain on CB repurchase 

(13,693)

(7,048)

Changes in assets and liabilities:

  Accounts receivable

(58,763)

45,610

  Inventories

121,765

(19,210)

  Project assets and deferred project cost

20,655

(33,856)

  Advances to suppliers

8,283

(8,238)

  Amounts due from related parties

(4,433)

(1,508)

  Value added tax recoverable

4,279

(2,371)

  Prepaid expenses and other current assets

15,169

40,319

  Prepaid land use rights, net

695

  Proceeds from disposal of land use right

-

513

  Deferred project costs

  Accounts payable

(153,057)

(174,894)

  Advances from customers

(58,666)

(15,231)

  Income tax payable

(2,424)

(3,795)

  Other  current liabilities

(2,951)

9,224

  Deferred revenue

32,376

  Other long-term liabilities

(1,728)

(2,874)

 Other non-current assets 

-

-

  Other long-term assets

-

(159)

  Accrued warranty cost

5,759

8,044

  Deferred taxes assets

2,538

(2,151)

  Provision for litigation

Net cash provided by (used in) operating activities

2,210

(121,688)

Investing activities:

  Purchases of property, plant and equipment

(14,438)

(51,813)

  Advances for purchases of property, plant and equipment

(2,383)

(2,699)

  Cash received from government subsidy

-

12,218

  Proceeds from disposal of property, plant and equipment

5,751

93

  Changes in restricted cash 

(24,504)

134,584

  Net cash received (paid) on settlement of  derivatives

(4,371)

4,398

  Purchases of investment securities

-

  Proceeds from disposal of subsidiaries

(83)

18,680

Net  cash provided by (used in) investing activities

(40,028)

115,461

Financing activities:

  Proceeds from bank borrowings

1,100,033

1,063,769

  Proceeds from issuance of common shares

-

-

  Proceeds from related parties

-

4,000

  Repayment of bank borrowings

(1,056,643)

(1,045,904)

  Proceeds from exercise of stock options

641

993

 Paid for CB repurchase 

(54,377)

(9,810)

Cash paid for ADS/s repurchase

(812)

-

Net cash provided  by (used in) financing activities

(11,158)

13,048

Effect of exchange rate changes

(12,827)

6,254

Net increase (decrease) in cash and cash equivalents

(61,803)

13,075

Cash and cash equivalents, beginning of year

99,848

86,773

Cash and cash equivalents, end of year

38,045

99,848

 

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SOURCE ReneSola Ltd.



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