ReneSola Announces Third Quarter 2015 Results

Nov 17, 2015, 07:30 ET from ReneSola Ltd.

SHANGHAI, Nov. 17, 2015 /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 third quarter ended September 30, 2015.

Third Quarter 2015 Highlights

Q3 2015

Q/Q Change

Y/Y Change

Revenue

$368.2

+37.2%

-1.1%

Gross Profit

$59.3

+33.6%

+3.9%

Operating Income

$11.4

+8.9%

+34.0%

Net Income

$8.6

N/A

N/A

  • Sold 35.0 MW of projects, project pipeline at 515 MW
  • Sequential revenue growth broad-based, with growth across all product lines
  • Stable gross margin as mix shifts to project sales from equipment
  • Operating expense control drives strong operating profit growth
  • Net income attributable to holders of ordinary shares swings to profit
  • Balance sheet improves during quarter with cash up, working capital and debt down

"Our strategic shift to project development, which we initiated approximately two years ago, is already starting to show results," said Mr. Xianshou Li, ReneSola's Chief Executive Officer. "Revenue surged sequentially as we monetized our projects in the UK and Japan, resulting in higher gross profit, operating income and earnings per ADS."

Li continued, "We are making an intense effort to build a portfolio of high-quality projects in attractive jurisdictions.  Our early success in the UK is indicative of what we can achieve around the world.  We are focused on developing projects especially distributed generation projects in Europe, North America and Japan, that should yield attractive returns in the coming year."

Third Quarter 2015 Financial Results

Revenue of $368.2 million was up 37.2% q/q and down 1.1% y/y.  Revenue performance was broad-based, with sequential increases across all of the Company's product lines.

Gross profit of $59.3 million was up 33.6% q/q and 3.9% y/y. Gross margin expanded to 16.1% when compared to the third quarter of 2014, but was down slightly sequentially.

Operating expenses of $47.9 million were 13.0% of revenue, slightly down from 13.1% in Q3 of 2014, but up from 12.6% in Q2 of 2015.

Operating income was $11.4 million, an increase of 8.9% q/q and 34.0% y/y.

Non-operating expenses of $2.6 million include net interest expense of $10.4 million, offset by foreign exchange gains of $5.7 million and gains on the repurchase of convertible bonds of $1.9 million.

Net income was $8.6 million, which compares to a net loss of $2.3 million in Q2 of 2015 and a net loss of $11.7 million in the prior-year period.  Earnings per ADS were $0.08.

Balance Sheet, Liquidity and Capital Resources

The Company achieved meaningful progress in its effort to strengthen its balance sheet.  Cash and equivalents, including restricted cash, increased during this quarter to $233 million, while total debt declined to $750 million. During the third quarter, the Company generated positive operating cash flow of $60.5million, which compares to $11.6 million of operating cash outflow in the prior quarter. The Company successfully accelerated inventory turnover days and held days-sales-outstanding of receivables flat at approximately 30 days. The cash generated enabled the Company to reduce accounts payable and debt. During the quarter the company repurchased $36.0 million notional amount of its convertible notes due on March 15, 2018 with a put option on March 15, 2016. The Company has approximately $26.1 million in convertible bonds outstanding.

Third Quarter 2015 Operating Highlights

Since disclosing its strategic shift to project development at the start of the year, 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 third quarter the Company continued to execute on the monetization phase of the development cycle.

Project Sales

The Company recognized revenue of $64.6 million from the sale of solar power projects. The revenue was comprised of new sales in the quarter of two projects representing 35.0 MW of generating capacity. The sales generated gross margins above the Company average.  Subsequent to the end of the quarter, the Company also announced the sale of another 16.5 MW utility scale project in the UK. In addition, the company expects to sell another project of 0.9MW in Japan in Q4 2015. 

Project Sales

Location

Size (MW)

Port Farms

UK

34.7

Kyoto Projects

Kyoto Japan

0.3

Operating Assets

The Company owns and operates certain projects it has developed.  Projects are kept as operating assets when the Company determines that the project can generate attractive rates of return in stable jurisdictions with positive long-term outlooks. The Company considers its operating projects to be economically attractive, because they produce a steady stream of high margin recurring revenue.  The company now owns and operates four solar power-producing projects.

IPP Assets

Location

Size (MW)

Nove  Eco

Bulgaria

5.0

MG Solar

Bulgaria

4.7

Lucas EST

Romania

9.4

Ecosfer Energy

Romania

6.0

Project Pipeline

As of quarter end, the company had 515MW of projects in various stages of development. The geographic distribution of projects is outlined the table below.

Project Location

Size (MW)

Status

USA

88

Development pipeline

UK

158

75MW under construction

Japan

31

29MW under construction

France

1

Development pipeline

Thailand

66

Development pipeline

Poland

139

Development pipeline

Canada

32

Development pipeline

Total

515

During the quarter, the Company announced its United States development strategy, in which it formed a joint venture with Pristine Sun, LLC, and under the terms of the agreement, the Company will hold a majority equity interest in the joint venture. The joint venture, named Baynergy, intends to develop, build and operate over 88 MW of solar projects in the coming year.

Modules and Wafers

The Company continues to fully utilize its capacity and provide high quality products with lower cost to its selective customers by improving conversion efficiency and its supply chain management.

During the third quarter, total solar module shipments were 405.5 MW, representing an increase of 25.9% from Q2 2015. Total wafer shipments were 341.6MW, up 21.3% q/q and 69.4% y/y.                                                                                            

LED

During the third quarter, the Company introduced several high-demand, project-focused LED products. The products enable both distributors and electrical contractors to achieve higher return-on-investment goals. During the quarter, ReneSola's LED business reached revenue of $3.6 million and delivered gross margin of over 30%.

Outlook

For Q4 2015, the Company expects revenue in the range of $275 to $295million and gross margin in the range of 17% to 18%.  The revenue outlook reflects the redirection of OEM module production away from external sales and toward proprietary project development to pursue high profit. Based on the current development status of its pipeline, the Company intends to sell the 16.5 MW in UK which was already announced in October and the project of 0.9 MW in Japan as well.

Conference Call Information

ReneSola's management will host an earnings conference call on November 17, 2015 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 71677900.

A replay of the conference call may be accessed by phone at the following numbers until November 25, 2015.  To access the replay, please again reference the conference passcode 71677900.

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.

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)

Sep 30,

Jun 30,

Sep 30,

2015

2015

2014

ASSETS

 Current assets:

 Cash and cash equivalents 

86,489

43,153

40,115

 Restricted cash 

146,533

141,942

156,620

 Accounts receivable, net of allowances for doubtful accounts

128,143

89,826

212,251

 Inventories

198,857

277,658

405,696

 Advances to suppliers-current

37,889

44,566

18,984

 Amounts due from related parties

118

101

1,111

 Value added tax recoverable

13,310

24,355

23,170

 Prepaid income tax

1,814

1,705

5,245

 Prepaid expenses and other current assets 

31,284

53,351

33,886

 Project assets

23,345

53,651

34,336

 Deferred convertible notes issue costs-current 

76

302

784

 Derivative assets

224

1,577

1,226

 Deferred tax assets-current, net

4,504

4,496

1,687

 Total current assets 

672,586

736,683

935,111

 Property, plant and equipment, net

667,377

705,256

788,629

 Prepaid land use right, net

38,923

40,151

40,313

 Deferred tax assets-non-current, net

15,699

15,886

18,463

 Deferred convertible notes issue costs-non-current

-

-

353

 Advances for purchases of property, plant and equipment 

677

169

2,579

 Advances to suppliers-non-current

-

-

5,627

 Deferred project costs

20,874

20,874

-

 Other long-lived assets

9,747

6,248

4,601

 Total assets 

1,425,883

1,525,267

1,795,676

 LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:

 Convertible bond payable-current

26,145

62,190

-

 Short-term borrowings 

685,311

653,627

692,184

 Accounts payable 

321,239

405,881

513,932

 Advances from customers-current

58,218

32,656

42,549

 Amounts due to related parties 

2,716

6,392

4,463

 Other current liabilities 

90,786

113,187

136,570

 Income tax payable

128

125

262

 Derivative liabilities

-

4,747

265

 Warrant liability

263

1,050

6,563

 Total current liabilities 

1,184,806

1,279,855

1,396,788

 Convertible notes payable-non-current 

-

-

111,616

 Long-term borrowings 

39,008

41,117

56,655

 Advances from customers-non-current

-

1,191

3,226

 Deferred revenue

30,541

26,054

-

 Warranty 

37,159

36,185

28,842

 Deferred subsidies and other

23,904

24,744

51,449

 Other long-term liabilities 

149

972

494

 Total liabilities 

1,315,567

1,410,118

1,649,070

 Shareholders' equity

   Common shares 

478,527

478,391

476,766

   Additional paid-in capital 

7,516

7,248

7,035

   Accumulated loss

(441,933)

(450,530)

(422,147)

   Accumulated other comprehensive income 

66,206

80,040

84,952

 Total equity attribute to ReneSola Ltd

110,316

115,149

146,606

 Total  shareholders' equity

110,316

115,149

146,606

 Total liabilities and shareholders' equity 

1,425,883

1,525,267

1,795,676

 

 

RENESOLA LTD

Unaudited Consolidated Statements of Income

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

Three Months Ended

Sep 30, 2015

Jun 30, 2015

Sep 30, 2014

Net revenues

368,239

268,401

372,457

Cost of revenues

(308,901)

(224,001)

(315,332)

Gross profit

59,338

44,400

57,125

GP%

16.1%

16.5%

15.3%

Operating (expenses) income:

Sales and marketing

(19,861)

(18,126)

(24,740)

General and administrative

(14,825)

(15,518)

(17,511)

Research and development

(9,803)

(11,166)

(13,307)

Other operating income

(3,436)

10,893

6,952

Total operating expenses

(47,925)

(33,917)

(48,606)

Income (loss) from operations

11,413

10,483

8,519

Non-operating (expenses) income:

Interest income

656

743

1,337

Interest expense

(11,047)

(11,177)

(12,215)

Foreign exchange gains (losses)

5,695

6,181

(13,696)

Gains (losses) on derivatives, net

(620)

(8,753)

2,217

Gains on repurchase of convertible bonds

1,891

155

-

Fair value change of warrant liability

788

683

735

Income (loss) before income tax, noncontrolling interests

8,776

(1,685)

(12,360)

Income tax (expense) benefit

(179)

(615)

615

Net income (loss)

8,597

(2,300)

(11,745)

Net income (loss) attributed to holders of ordinary shares

8,597

(2,300)

(11,745)

Earnings per share

  Basic

0.04

(0.01)

(0.06)

  Diluted

0.04

(0.01)

(0.06)

Earnings per ADS

  Basic

0.08

(0.02)

(0.12)

  Diluted

0.08

(0.02)

(0.12)

Weighted average number of shares used in computing loss per share

  Basic

204,658,446

204,627,464

203,675,441

  Diluted

204,658,446

204,627,464

203,675,441

RENESOLA LTD

Unaudited Consolidated Statements of Comprehensive Income (loss)

(US dollar in thousands)

Three Months ended

Sep 30, 2015

Jun 30, 2015

Sep 30, 2014

Net income (loss)

8,597

(2,300)

(11,745)

Other comprehensive income (loss)

Foreign exchange translation adjustment

(13,834)

(7,211)

692

Other comprehensive income (loss)

(13,834)

(7,211)

692

Comprehensive income (loss)

(5,237)

(9,511)

(11,053)

Comprehensive income (loss) attributable to Renesola

(5,237)

(9,511)

(11,053)

 

 

RENESOLA LTD

Unaudited Consolidated Statements of Cash Flow

(US dollar in thousands)

 Nine Months Ended

Sep 30, 2015

Sep 30, 2014

Operating activities:

Net loss

(11,731)

(25,579)

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

  Inventory write-down

643

808

  Depreciation and amortization

68,866

67,811

  Amortization of deferred convertible bond issuances costs and premium

723

588

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

(2,000)

7,186

  Loss on derivatives

4,872

1,699

  Fair value change of warrant liability

(1,628)

(2,783)

Gain from settlement of certain payables

(6,159)

-

  Share-based compensation

4

1,202

  Loss on disposal of long-lived assets

267

1,366

  Gain on disposal of land use right

-

(579)

Impairment of  fixed assets

4,350

-

  Gain on disposal of  subsidiaries

-

(3,358)

 Gain on CB repurchase

(13,693)

-

Changes in assets and liabilities:

  Accounts receivable

(19,663)

6,582

  Inventories

120,663

(60,777)

  Project assets and deferred project cost

17,524

(2,732)

  Advances to suppliers

(10,906)

(5,020)

  Amounts due from related parties

(4,453)

(5,303)

  Value added tax recoverable

16,471

6,132

  Prepaid expenses and other current assets

12,149

32,923

  Prepaid land use rights, net

978

2,052

  Accounts payable

(135,195)

(129,705)

  Advances from customers

(22,651)

(59,865)

  Income tax payable

(601)

(7,618)

  Other  current liabilities

(10,753)

13,098

  Deferred revenue

30,541

-

  Other long-term liabilities

(855)

(6,930)

 Other non-current assets

(2,872)

-

  Accrued warranty cost

6,241

6,731

  Deferred taxes assets

(1,282)

(1,511)

Net cash provided by (used in) operating activities

39,850

(163,582)

Investing activities:

  Purchases of property, plant and equipment

(5,283)

(42,707)

  Advances for purchases of property, plant and equipment

(2,383)

(3,334)

  Cash received from government subsidy

-

12,214

  Proceeds from disposal of property, plant and equipment

25

59

  Changes in restricted cash

(28,203)

101,312

  Net cash paid on settlement of  derivatives

(3,426)

(2,635)

  Proceeds from disposal of subsidiaries

20

18,673

Net  cash provided by (used in) investing activities

(39,250)

83,582

Financing activities:

  Proceeds from bank borrowings

747,166

773,379

  Repayment of bank borrowings

(701,089)

(751,863)

  Proceeds from exercise of stock options

1,761

993

 Paid for CB repurchase

(54,377)

-

Net cash provided  by (used in) financing activities

(6,539)

22,509

Effect of exchange rate changes

(7,420)

10,833

Net decrease in cash and cash equivalents

(13,359)

(46,658)

Cash and cash equivalents, beginning of year

99,848

86,773

Cash and cash equivalents, end of year

86,489

40,115

 

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SOURCE ReneSola Ltd.



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