Company Raises Full Year 2008 Production Output and Revenue Guidance

    JIASHAN, China, May 14 /Xinhua-PRNewswire/ -- ReneSola Ltd ("ReneSola"
 or the "Company"), a leading Chinese manufacturer of solar wafers, today
 announced its unaudited financial results for the first quarter ended March
 31, 2008.
 
 

     Financial and Business Highlights
 
     -- First quarter 2008 net revenues were US$123.0 million, an increase of
        242.4% from US$35.9 million in the first quarter of 2007, and an
        increase of 28.0% from US$96.0 million in the fourth quarter of 2007.
 
     -- First quarter 2008 gross margin was 22.1% compared to 20.4% in the
        fourth quarter of 2007.
 
     -- First quarter 2008 net income was US$17.7 million, an increase of
        160.6% from US$6.8million in the first quarter of 2007, and an increase
        of 1.2% from US$17.5 million in the fourth quarter of 2007.
 
     -- First quarter 2008 basic and diluted earnings per share were US$0.15
        and US$0.14, respectively, and basic and diluted earnings per ADS were
        US$0.30 and US$0.28, respectively. Each ADS represents two shares.
 
     -- First quarter production output was 66.5 MW, an increase of 29.6% from
        51.3 MW in the fourth quarter of 2007, exceeding previously issued
        guidance of 62 MW.
 
     -- Silicon consumption rate decreased to 6.3 grams per watt in the first
        quarter of 2008 from 6.5 grams per watt in the fourth quarter of 2007.
 
     -- Wafer production capacity is planned to increase to 1,000 MW by the end
        of 2009.
 
 
                                                     Three months ended,
                                              March 31, December 31, March 31,
                                                 2007       2007        2008
      Net revenue (US$000)                      35,916     96,046     122,982
      Gross profit (US$000)                      8,152     19,619      27,234
      Gross margin (%)                           22.7%      20.4%       22.1%
      Operating profit (US$000)                  6,939     15,000      23,187
      Foreign exchange gain (loss) (US$000)        (63)    (1,174)        (56)
      Income tax benefit (expense) (US$000)         23      5,171      (3,560)
      Net income for the period (US$000)         6,783     17,471      17,675
      Production output (MW)                      15.3       51.3        66.5
 
     "We exceeded our targeted output and once again achieved record
 revenues for the quarter," said Mr. Xianshou Li, ReneSola's chief executive
 officer. "During the first quarter, we increased production output to 66.5
 MW through the successful ramp-up of production capacity that was installed
 in the fourth quarter of 2007. This resulted in substantial growth in
 revenue and operating profits. Our dedication to efficient production
 processes and innovation continued to yield impressive performance."
 
     ''In January 2008, we completed our initial public offering on the New
 York Stock Exchange, generating net proceeds of approximately US$109.0
 million,'' continued Mr. Li. ''The listing strengthened our balance sheet
 and increased our brand recognition. We remain optimistic about the
 remainder of 2008, and are committed to growing in order to meet increasing
 demand for our high quality wafer products.''
 
     Financial Results for the First Quarter
 
     Net revenues
 
     Net revenues for the first quarter of 2008 were US$123.0 million, an
 increase of 28.0% sequentially and 242.4% year-over-year. The increase in
 first quarter revenues was primarily attributable to an increase in output
 from the expanded production capacity and increasing wafer ASPs.
 
     Gross profit
 
     First quarter 2008 gross profit was US$27.2 million, a 38.8% increase
 sequentially and 234.1% year-over-year. The gross margin for the first
 quarter 2008 was 22.1% compared to 20.4% in the fourth quarter of 2007. The
 increase in gross margin was achieved despite an increase in average
 feedstock costs of 21.0% sequentially and was primarily attributable to a
 further reduction in silicon consumption rate to 6.3 grams per watt from
 6.5 grams per watt in fourth quarter of 2007, a continuing reduction in
 non-raw material related production costs and an increase in wafer ASPs due
 to the high demand for our wafer products.
 
     Operating profit
 
     Operating profit in the first quarter of 2008 was US$23.2 million, an
 increase of 54.6% sequentially and 234.2% year-over-year. Operating margin
 was 18.9% in the first quarter compared to 15.6% in the fourth quarter of
 2007. Total operating expenses in the first quarter of 2008 were US$4.0
 million, down from US$4.6 million in the fourth quarter of 2007.
 
     Profit before tax
 
     Profit before tax in the first quarter was US$21.3 million, a 72.2%
 increase sequentially and 215.0% increase year-over-year. Finance costs
 increased by 26.9% sequentially, reflecting increased bank borrowings and
 interest rates. Finance costs as a percentage of net revenue decreased from
 1.8% in the fourth quarter of 2007 to 1.7% in the first quarter of 2008.
 The first quarter foreign exchange loss was US$0.06 million compared to
 foreign exchange loss of US$1.2 million in the fourth quarter of 2007.
 
     Taxation
 
     We recognized a tax charge of US$3.6 million in the first quarter of
 2008, compared to a tax credit of US$5.2 million in the fourth quarter of
 2007. ReneSola's subsidiary, Zhejiang Yuhui Solar Energy Source Co. Ltd,
 ("Zhejiang Yuhui"), after the first two years of exemptions, is now subject
 to a tax rate of 12.5% under the new PRC Enterprise Income Tax Law, or the
 EIT Law. The current applicable tax rate is half the statutory rate of 25%,
 which is expected to apply to Zhejiang Yuhui, effective from the beginning
 of 2010. Furthermore, in 2007 Zhejiang Yuhui received an income tax credit
 equivalent to 40% of the cost of capital equipment manufactured in the PRC.
 This tax policy has now been withdrawn from 2008 with the enactment of the
 New Enterprise Income Tax Law.
 
     Net profit
 
     First quarter 2008 net profit increased 1.2% sequentially and 160.6%
 year- over-year to US$17.7 million.
 
     Other Recent Business Developments
 
     ReneSola announced on November 19, 2007 that it planned to develop a
 polysilicon manufacturing facility with an annualized capacity of 1,500
 tons in Meishan, Sichuan province, China. With a substantial pipeline of
 wafer sales secured under various long term contracts and strong customer
 interest in signing further long-term contracts, ReneSola has decided to
 increase the previously announced 1,500 tons of annual polysilicon
 manufacturing to 3,000 tons on the same site in Meishan to secure more
 in-house polysilicon supplies. Land leveling has been completed and
 construction has commenced with completion expected in early 2009. The
 facility is expected to be operational in the first half of 2009. As part
 of the project, ReneSola has signed purchasing contracts and made
 down-payments for major capital equipment from world-class international
 equipment suppliers.
 
     On May 12, 2008 an earthquake with a magnitude of 7.8 struck China's
 Sichuan province. There was no damage to ReneSola's facilities and
 construction remains on schedule. ReneSola does not expect the earthquake
 to have a material effect on its operations in Sichuan province.
 
     Production Capacity
 
     With our current facilities reaching full capacity and strong customer
 demand for additional wafer sales contracts, ReneSola is pleased to
 announce a further expansion in its wafer manufacturing capacity to 1,000
 MW by the end of 2009. The Company believes the new wafer manufacturing
 capacity will provide important ramp-up capabilities to meet increasing
 market demand. Negotiations on equipment purchases are currently under way
 and are expected to be completed within the next couple of months.
 
     Second Quarter Outlook
 
     We anticipate production output to be in the range of 75 MW to 80 MW in
 the second quarter of 2008 compared to 66.5 MW in the first quarter of 2008
 and 23 MW in the second quarter of 2007. Gross margin for the second
 quarter of 2008 is expected to remain stable. On April 17, 2008, we
 increased previously issued full year 2008 production output to 310 MW to
 320 MW and revenue guidance to US$530 million to US$550 million for 2008.
 We are once again increasing our outlook for full year 2008 and expect
 production output to be in the range of 330 MW to 340 MW with annual net
 revenues of approximately US$570 million to US$590 million.
 
     Conference Call Information
 
     ReneSola's management will host an earnings conference call on May 14,
 2008 at 8 AM U.S. EDT / 8 PM Beijing/Hong Kong time / 1 PM BST.
 
 

     Dial-in details for the earnings conference call are as follows:
 
     U.S. & International:  +1-617-597-5313
     United Kingdom:        +44-207-365-8426
     Hong Kong:             +852-3002-1672
     Please dial in 10 minutes before the call is scheduled to begin and
 provide the passcode to join the call. The passcode is "ReneSola Call."
 
     A replay of the conference call may be accessed by phone at the
 following number until May 21, 2008:
 
 

     International:  +1-617-801-6888
     Passcode:       28483587
     About ReneSola
 
     ReneSola Ltd ("ReneSola") is a leading solar wafer manufacturer based
 in China. Capitalizing on proprietary technologies and technical know-how,
 ReneSola manufactures monocrystalline and multicrystalline solar wafers. In
 addition, ReneSola strives to enhance its competitiveness through upstream
 integration into virgin polysilicon manufacturing. ReneSola possesses a
 global network of suppliers and customers that include some of the leading
 global manufacturers of solar cells and modules. ReneSola's shares are
 currently traded on the New York Stock Exchange (NYSE:   SOL) and the AIM of
 the London Stock Exchange (AIM: SOLA.L). For more information about
 ReneSola, please visit http://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 we describe
 what we "believe," "expect" or "anticipate" will occur, what "will" or
 "could" happen, and other similar statements), you must remember that our
 expectations may not be correct, even though we believe that they are
 reasonable. We do 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 our
 filings with the U.S. Securities and Exchange Commission, including our
 registration statement on Form F-1. We undertake 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
 our situation may change in the future.
 
 

 
 
                         CONSOLIDATED INCOME STATEMENT
 
                                        Three months Three months  Three months
                                           ended        ended         ended
                                          March 31,    December 31,  March 31,
                                            2007         2007          2008
                                           US$000       US$000        US$000
 
      Net revenue                          35,916       96,046      122,982
      Cost of sales                       (27,764)     (76,427)     (95,748)
      Gross profit                          8,152       19,619       27,234
 
      Operating expenses:
          Sales and marketing                (149)        (169)        (267)
          General and administrative       (1,058)      (3,635)      (3,389)
          R&D Expense                         (63)        (898)        (442)
          Other expenses, net                  57           83           51
      Total operating expenses             (1,213)      (4,619)      (4,047)
 
      Income from operations                6,939       15,000       23,187
 
      Interest income                          60          229          306
      Interest expenses                      (176)      (1,690)      (2,144)
      Foreign exchange (loss) gain            (63)      (1,174)         (56)
      Total non-operating (expenses)
       income                                (179)      (2,635)      (1,894)
 
      Income before income tax expenses     6,760       12,365       21,293
 
      Income tax benefit(expenses)             23        5,171       (3,560)
 
      Minority interest                        --           65           58
 
      Net income                            6,783       17,471       17,675
 
     Net income per share:
         - Basic                             0.07         0.17         0.15
         - Diluted                           0.07         0.17         0.14
     Net income per ADS:
         - Basic                             0.14         0.34         0.30
         - Diluted                           0.14         0.34         0.28
     Shares used in computation:
         - Basic                      100,000,032  100,000,032  113,906,186
         - Diluted                    100,841,684  110,645,584  124,460,612
 
 
 
 
 
                           CONSOLIDATED BALANCE SHEET
 
                                        As at     As at     As at
                                      March 31,  December March 31,
                                         2007    31, 2007    2008
                                        US$000    US$000    US$000
     ASSETS
     Current assets:
     Cash and cash equivalents          131,031    53,137    67,441
     Accounts receivable, net of
      allowances for doubtful
      receivables                           854     8,755    16,234
     Inventories                         59,597   110,630   156,277
     Advances to suppliers               10,415    53,727    88,843
     Amounts due from related parties     7,152    13,382    36,046
     Value added tax recoverable          6,775       117     3,808
     Prepaid expenses and other
      current assets                      4,104    13,006     4,972
     Deferred tax assets                  3,576    10,487     8,861
     Total current assets               223,504   263,241   382,482
 
     Property, plant and equipment,
      net                                26,651   136,598   172,330
     Prepaid land rent, net               4,268     7,502     9,391
     Deferred tax assets                     68       284       629
     Deferred convertible bond issue
      costs                               4,212     3,336     3,087
     Advances for purchases of
      property, plant and equipment      26,290    29,648    77,169
 
     Total assets                       284,993   440,609   645,088
 
     LIABILITIES AND SHAREHOLDERS'
      EQUITY
     Liabilities
     Current liabilities:
     Short-term borrowings              (45,983)  (71,691)  (88,968)
     Accounts payable                    (4,869)  (13,147)  (22,373)
     Advances from customers            (31,893)  (59,626)  (72,188)
     Amounts due to related parties        (224)       --       (15)
     Other current liabilities           (1,824)  (13,912)  (12,328)
     Total current liabilities          (84,793) (158,376) (195,872)
 
     Convertible bond payable          (120,096) (128,265) (133,999)
     Long-term borrowings                    --   (17,797)  (34,085)
     Other long-term liabilities            (63)   (1,246)   (1,114)
     Total liabilities                 (204,952) (305,684) (365,070)
 
     Minority interest:                      --    (9,217)  (17,635)
     Shareholders' equity
       Common shares                    (36,266)  (36,266) (145,291)
       Additional paid-in capital       (11,808)  (14,827)  (15,579)
       Retained earnings                (30,047)  (66,200)  (83,875)
       Accumulated other comprehensive
        income                           (1,920)   (8,415)  (17,638)
     Total shareholders' equity         (80,041) (125,708) (262,383)
 
     Total liabilities and
      shareholders' equity             (284,993) (440,609) (645,088)
 
 
 
 
                        CONSOLIDATED CASH FLOW STATEMENT
 
                                            Three        Three       Three
                                            months       months      months
                                             ended       ended       ended
                                           March 31,  December 31,  March 31,
                                              2007        2007        2008
                                             US$000      US$000      US$000
 
      Cash flows from operating
       activities:
      Net income                              6,783      17,471      17,675
      Adjustments for:
      Minority interest                          --          65          58
      Depreciation                              518       1,733       2,459
      Amortization of deferred convertible
       bond issue costs and premium              38         728         753
      Allowances for doubtful receivables        56         378           4
      Prepaid land rent expensed                 27          46          35
      Share-based compensation                   69         670         670
      Changes in operating assets and
       liabilities:
      Accounts receivable                      (210)     (3,040)     (7,914)
      Inventories                           (14,419)    (13,621)    (40,353)
      Advances to suppliers                   6,696     (17,818)    (32,194)
      Amounts due from related parties       (1,334)        991     (17,746)
      Value added tax recoverable            (1,713)      3,899      (2,667)
      Prepaid expenses and other current
       assets                                (1,116)      5,211       2,151
      Prepaid land rent                          --         (25)     (1,579)
      Accounts payable                          (80)      2,960       8,505
      Advances from customers                (2,897)     22,259       9,869
      Deferred taxes                           (188)     (5,029)      1,730
      Other liabilities                         123       4,156      (3,728)
      Net cash provided by (used in)
       operating activities                  (7,647)     21,034     (62,272)
 
      Cash flows from investing
       activities:
      Purchases of property, plant and
       equipment                             (6,723)    (35,341)    (22,330)
      Advances for purchases of property,
       plant and equipment                  (11,211)     (5,947)    (45,339)
      Cash provided to related parties           --      (3,680)         --
      Net cash used in investing
       activities                           (17,934)    (44,968)    (67,669)
 
      Cash flows from financing
       activities:
      Net proceeds from short-term
       borrowings                            31,228       6,292      29,221
      Proceeds from issuance of common
       shares                                    --          --     119,762
      Share issuance costs                       --          --     (10,737)
      Net proceeds from issuance of
       convertible bonds                    115,771                      --
      Contribution from minority
       shareholders of subsidiaries              --          --          --
      Proceeds from capital contribution         --          --          --
      Distribution in respect of
       reorganization                            --          --          --
      Other distribution to shareholders         --          --          --
      Cash received from related parties         --         111          15
      Cash paid to related parties             (389)       (120)         --
      Net cash provided by financing
       activities                           146,610       6,283     138,261
 
      Effect of exchange rate changes           140       1,853       5,984
      Net increase in cash and cash
       equivalents                          121,169     (15,798)     14,304
      Cash and cash equivalents, beginning
       of year                                9,862      68,935      53,137
      Cash and cash equivalents, end of
       year                                 131,031      53,137      67,441
 
 
 
 
 
     For investor and media inquiries, please contact:
 
     In China:
      Mr. Charles Bai
      ReneSola Ltd
      Tel:   +86-573-8477-3061
      Email: charles.bai@renesola.com
 
      Mr. Derek Mitchell
      Ogilvy Public Relations Worldwide (Beijing)
      Tel:   +86-10-8520-6284
      Email: derek.mitchell@ogilvy.com
 
     In the United States:
      Mr. Jeremy Bridgman
      Ogilvy Public Relations Worldwide (New York)
      Tel:   +1-212-880-5363
      Email: jeremy.bridgman@ogilvypr.com
 
     In the UK:
      Mr. Tim Feather/Mr. Richard Baty
      Hanson Westhouse Limited
      Tel:   +44-207-601-6100
      Email: tim.feather@hansonwesthouse.com
             richard.baty@hansonwesthouse.com
 
 

SOURCE ReneSola Ltd

Back to top