ReneSola Announces Third Quarter 2015 Results
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 LtdMs. Rebecca Shen +86 (21) 6280-9180 x106[email protected]
The Blueshirt Group AsiaMr. Gary Dvorchak, CFA+86 (138) 1079-1480[email protected]
In the United States:The Blueshirt Group Mr. Ralph Fong+1 (415) 489-2195[email protected]
|
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.