ReneSola Announces Second Quarter 2018 Results


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Sep 06,2018
ReneSola Announces Second Quarter 2018 Results

SHANGHAI, Sept. 6, 2018 /PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company") (www.renesolapower.com) (NYSE: SOL), a leading solar project developer and operator, today announced its unaudited financial results for the second quarter ended June 30, 2018.

ReneSola Logo (PRNewsfoto/ReneSola Ltd.)

Mr. Xianshou Li, ReneSola's Chief Executive Officer, commented, "We are quite satisfied with our second quarter performance.  Revenue was at the high end of our expectations, and we meaningfully improved our operating margin.  Second quarter gross profit and operating income were identical to the first quarter. These results demonstrate our steadily improving earnings power, as we continue to scale up the new business model we initiated last year."

Li continued, "In August, we announced a very important development, the potential sale of our operating DG assets in China to Brookfield.  Should we reach a deal during the 60 day exclusivity period, this sale will provide substantial capital for us to recycle back into the growth of our business.  We remain optimistic about our opportunities around the world, and look forward to funding the continued growth of our 1.5 GW pipeline."

Second Quarter 2018 Highlights

 
 

Q2 2018

($ millions)

Q1 2018

($ millions)

Q/Q
Change

Revenue

$27.8

$44.8

-38%

Gross Profit

$8.2

$8.4

-2%

Operating Income

$5.9

$5.9

0%

EBITDA

$5.2

$9.0

-43%

Income before Income Tax and Noncontrolling interests

$0.4

$5.4

-92%

Net Income

$0.4

$5.4

-92%

 

  • Revenue was $27.8 million, toward the high end of the guidance range of $20 to $30 million;
  • Gross margin was 30%, compared to 19% in Q1 2018;
  • Income before income tax and noncontrolling interests was $0.4 million, compared to $5.4 million in Q1 2018 and $0.8 million in Q2 2017;
  • Key constituents of revenue:
    -$10.1 million from the Project Development business, mainly from sales of utility solar projects in North Carolina, United States;
    -$7.6 million from EPC services for 8.4 MW of distribued generation projects in China
    -$9.9 million from the sale of electricity
  • Installed 13.1 MW of rooftop projects in China and 14.0 MW of projects in Poland;
  • Solar power project pipeline of approximately 1.51 GW, of which 670.2 MW is late-stage.

Second Quarter 2018 Financial Results

Revenue was $27.8 million, compared to $44.8 million in Q1 2018 and $1.6 million in Q2 2017.

Revenue from the Project Development business was $10.1 million, due mainly to sales of 6.7 MW of utility-scale projects in North Carolina, United States.

Revenue from the EPC business was $7.6 million due to EPC services for 8.4 MW of distribued generation projects in China.

Revenue from the sale of electricity was $9.9 million. The Company generated 63.3 Million Kwh of electricity from its operating DG projects in China.

Gross profit was $8.2 million, compared to a gross profit of $8.4 million in Q1 2018 and $1.1 million in Q2 2017. Gross margin was 30%, compared to 19% in Q1 2018, mainly due to a greater mix of electricity sales due to the seasonality of solar irradiation.

Operating expenses were $2.3 million, slightly down from $2.5 million in Q1 2018 and up from $1.9 million in Q2 2017. Sales and marketing expenses were $0.2 million, slightly up from $0.1 million in Q1 2018. General and administrative expenses were $2.7 million, slightly up from $2.4 million in Q1 2018.

Operating income was $5.9 million, same as to operating income in Q1 2018 and compared to an operating loss of $0.7 million in Q2 2017.

Total non-operating expenses of $5.5 million included interest expenses of $2.6 million and foreign exchange loss of $2.9 million, mainly driven by the depreciation of EUR,GBP and PLN against USD.

Income before income tax and noncontrolling interests was $0.4 million, compared to an income of $5.4 million in Q1 2018 and a loss of $0.8 million in Q2 2017.

Net income was $0.4 million, compared to an income of $5.4 million in Q1 2018 and $0.8 million in Q2 2017.

Financial Position

The Company had cash and equivalents of $24.8 million as of June 30, 2018, compared to $10.9 million as of March 31, 2018. Long-term borrowings were $72.7 million as of June 30, 2018, compared to $32.7 million as of March 31, 2018, due mainly to loans for renewed construction in Poland.  The loan term and size for Polish projects was extended during the quarter.  Long-term failed sale-lease back and capital lease liabilities, associated with the financial leasing payables for rooftop projects in China, were $85.0 million as of June 30, 2018, compared to $78.2 million as of March 31, 2018.  The increase was mainly due to the corresponding growth of the Company's DG operating assets.

Recent Business Updates

  • On September 5, the Company held its annual general meeting in Shanghai, and approved the following: the consolidated financial statements of the Company for the year ended December 31, 2017, together with the reports of the auditors; the re-election of Mr. Martin Bloom as a director of the Company, who is retiring by rotation and offering himself for re-election in accordance with the Company's articles of association. The Company's shareholders denied the proposed resolution of the re-appointment of PricewaterhouseCoopers Zhong Tian LLP as auditors of the Company until the conclusion of the next annual general meeting.
  • On August 30, 2018, the Company announced that in Budapest it closed on long-term project financing with K&H Bank, one of Hungary's largest banking and financial services firms, to develop an approximately 8 MW KAT-licensed solar project in Hungary. The 8 MW projects are expected to be grid-connected by October, 2018. ReneSola has two more KAT-licensed project portfolios seeking project financing from K&H Bank.
  • On August 21, 2018, the Company appointed Grant Thornton as its independent registered public accounting firm. Grant Thornton replaces PricewaterhouseCoopers Zhong Tian LLP ("PwC"). The appointment of Grant Thornton was approved by the Board of Directors and its Audit Committee after an extensive evaluation process.
  • On July 31, 2018, ReneSola announced an exclusive negotiating agreement to sell its operating distributed generation assets in China, which have a total capacity of 207 MW. The potential buyer is an affiliate of Brookfield Asset Management. The exclusivity period is 60 days from the date of signing.

Operating Assets and Completed Projects for Sale

The Company continues to pursue opportunities in small-scale projects in diversified regions and believes its strategy can capitalize on trends in solar energy development. ReneSola currently owns over 226.5 MW of operating rooftop projects, which are concentrated in a handful of eastern provinces of China with attractive development environments.  As of June 30, 2018, the Company had over 134.0 MW of rooftop projects under construction.

Operating Assets

Capacity (MW)

China DG

206.8

- Zhejiang& Shanghai

74.5

- Jiangsu

13.9

- Henan

62.4

- Anhui

31.5

- Hebei

17.1

- Shandong

7.4

Romania

15.4

United Kingdom

4.3

Total

226.5

As of June 30, 2018, the Company had 24.4 MW of completed projects, which are currently for sale.

Completed Projects for Sale

Capacity (MW)

Poland

14.0

Turkey

10.4

Total

24.4

Project Pipeline

As of June 30, 2018, the Company had a project pipeline of over 1.51 GW, of which 670.2 MW are late-stage. 134.0 MW of the late-stage projects are under construction. Late-stage projects include (i) projects with the legal right to develop based on definitive agreements, including the projects held by project SPVs or joint-ventured project SPVs where control can be purchased by the Company once the late stage is reached, and (ii) projects for which a PPA or FiT has been arranged.

The following table sets forth the Company's late-stage project pipeline by location:

Project
Location

Late-stage
(MW)

Under Construction
(MW)

USA

285.5

24.0

Canada

7.6

7.6

Poland

41.0

41.0

Hungary

42.6

42.6

France

73.7

--

Spain

162.0

--

India

30.0

--

South Korea

9.0

--

China DG

18.8

18.8

Total

670.2

134.0

China

China: Late-stage Pipeline

Capacity

(MW)

Business Model

-Zhejiang & Shanghai

10.2

IPP

-Jiangsu

4.3

IPP

-Fujian

4.3

IPP

China DG

18.8

 

United States

In the U.S, the Company has a late-stage pipeline of 285.6 MW, 24.0 MW of which is under construction and are expected to be connected to the grid in the fourth quarter of 2018.

US: Late-
stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected
COD

Business Model

RP-NC

NC

24.0

Utility

Construction

2018

Project Development

Utah

UT

10.7

Self-consumption / DG

Development

2018

Project Development

RP-MN

MN

37.5

Community Solar

Development

2018

Project Development

MN-VOS

MN

11.2

Community Solar

Development

2019

Project Development

New York

NY

20.6

Community Solar

Development

2019

Project Development

RP-CA

CA

16.5

Utility

Development

2019

Project Development

Florida

FL

100.0

To be decided

Development

2019

Project Development

Alpine

TX

65.0

To be decided

Development

2019

Project Development

Total

 

285.5

       

Canada

In Canada, the Company has a late-stage pipeline of 7.6 MW projects, all under construction and expected to be connected to the grid by the end of 2018. All 7.6 MW of projects are eligible for Canada's FiT3 Scheme.

Canada: Late-
stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected
COD

Business Model

FiT3

Ontario

7.6

DG

Construction

2018

Project Development

Total

 

7.6

       

Poland

In Poland, the Company has a late-stage pipeline of 41.0 MW, which are all under construction and expected to connect to the grid in the second half of 2018.

Poland: Late-stage
Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected
COD

Business Model

Auction 2017 Jun

Poland

41.0

DG

Development

2018

Project Development

Total

 

41.0

       

Hungary

In Hungary, the Company grew its late-stage pipeline to 71 "Micro PPs" projects with a total capacity of 42.6 MW. All are under construction and are expected to be connected to the grid in the second half of 2018.

Hungary: Late-stage
Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected
COD

Business Model

Portfolio of "Micro PPs", 0.5 MW each

Hungary

42.6

DG

Construction

2018

Project Development

Total

 

42.6

       

France

In France, the Company formed a strategic partnership with Green City Energy to jointly develop four solar parks with a total installed capacity of 69.0 MW. Additionally, the Company was awarded 16 solar projects in France with a combined capacity of 4.65 MW.

France: Late-stage
Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected
COD

Business Model

SOLARPARK

France

69.0

Utility

Development

2019

Project Development

SPV2

France

4.7

DG

Development

2019

Project Development

Total

 

73.7

       

Other Geographies

In India, the Company has a pipeline of 30.0 MW, which are self-consumption distributed generation projects with top-rated commercial and industrial off-takers. In Spain, the Company has a late-stage pipeline of 162.0 MW of private PPA projects. In South Korea, the Company has secured a pipeline of 9.0 MW.

Other Geographies:
Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected
COD

Business Model

Spain PPA

Spain

162.0

Utility

Development

2019

Project Development

India C&I

India

30.0

DG

Development

2018/2019

Project Development

South Korea

South Korea

9.0

Utility

Development

2019

Project Development

Total

 

201.0

       

Outlook

For the third quarter of 2018, the Company's project business is expected to generate revenue in the range of $15 to $20 million and overall gross margin in the range of 35% to 40%. During the third quarter of 2018, the Company expects to monetize 13 MW of projects.

For 2018, the Company expects to generate revenue in the range of $130 to $140 million with overall gross margin in the range of 20 to 25%. The Company intends to monetize 250 MW to 300 MW projects.

Adoption of New Accounting Policy

Effective from January 1, 2018, ReneSola adopted the new revenue recognition policy, ASC 606 — Revenue from Contracts with Customers, using the modified retrospective method in accordance with US GAAP ("ASC 606"). As a result of adopting ASC 606, the Company recognized the cumulative effect of initially applying the revenue standard as an increase of approximately USD 0.87 million to the opening balances of retained earnings in the first quarter of 2018. There is no adjustment in the second quarter of 2018  

Conference Call Information

ReneSola's management will host an earnings conference call on September 6, 2018 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. China Standard Time).

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

 

Phone Number

Toll-Free Number

United States

+1 (845) 675-0437

+1 (866) 519-4004

Hong Kong

+852 30186771

+852 (800) 906601

China

+86 (800) 819-0121

+86 (400) 620-8038

 

Other International

+65 6713-5090

 

The call passcode is 8561109.

The Company requests listeners to dial in ten minutes before the scheduled start time, in order to avoid delays in registering. 

A replay of the conference call may be accessed by phone at the following numbers until September 15, 2018.  To access the replay, please again reference the conference passcode 1739389.

 

Phone Number

Toll-Free Number

United States

+1 (646) 254-3697

+1 (855) 452-5696

Hong Kong

+852 3051-2780

+852 (800) 963117

Mainland China

+86 (800) 870-0206

+86 (400) 602-2065

 

Other International

+61 (2) 8199-0299

 

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.renesolapower.com.

About ReneSola

Founded in 2005, and listed on the New York Stock Exchange in 2008, ReneSola (NYSE: SOL) is an international leading brand of solar project developer and operator. Leveraging its global presence and solid experience in the industry, ReneSola is well positioned to develop green energy projects with attractive return around the world. For more information, please visit www.renesolapower.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," "plans," "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. Furthermore, the forward-looking statements are mainly related to the Company's continuing operations and you may not be able to compare such information with the Company's past performance or results.  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
Mr. Johnny Pan
+86 (21) 6280-9180 x131
ir@renesolapower.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) 

 
 

 Jun 30, 

 

 Mar 31, 

 

 Jun 30, 

 

2018

 

2018

 

2017

 ASSETS 

         

 Current assets: 

         

 Cash and cash equivalents  

24,805

 

10,861

 

3,038

 Restricted cash  

1,571

 

2,078

 

5

 Accounts receivable, net of allowances for doubtful accounts 

43,893

 

34,539

 

136

 Inventories , net of inventory provisions 

-

 

-

 

15

 Advances to suppliers-current, net  

660

 

339

 

3,122

 Value added tax recoverable 

15,002

 

13,675

 

6,611

 Prepaid expenses and other current assets  

10,525

 

10,068

 

9,297

 Project assets current 

77,799

 

81,460

 

116,869

 Contract costs 

1,006

 

2,380

 

-

 Assets of discontinued operations current  

-

 

-

 

380,063

 Total current assets  

175,261

 

155,400

 

519,156

           

 Property, plant and equipment, net 

195,885

 

192,429

 

94,794

 Deferred tax assets-non-current, net 

414

 

294

 

64

 Project assets non-current 

17,133

 

11,233

 

4,537

 Deferred project costs non-current 

-

 

-

 

20,913

 Other non-current assets   

922

 

935

 

3,355

 Assets of discontinued operations non-current  

-

 

-

 

512,107

 Total assets  

389,615

 

360,291

 

1,154,926

           

 LIABILITIES AND SHAREHOLDERS' EQUITY 

         
           

 Current liabilities: 

         

 Short-term borrowings  

7,527

 

23,674

 

-

 Accounts payable  

23,662

 

29,169

 

23,422

 Advances from customers-current 

213

 

754

 

20,633

 Amounts due to related parties  

31,725

 

60,217

 

3,257

 Other current liabilities  

40,589

 

37,616

 

4,089

 Income tax payable 

147

 

209

 

94

 Salary payable   

800

 

849

 

-

 Liabilities of discontinued operations current  

-

 

-

 

973,943

 Total current liabilities  

104,663

 

152,488

 

1,025,438

           

 Long-term borrowings  

72,742

 

32,722

 

30,328

 Deferred project revenue non-current  

-

 

-

 

33,305

 Failed sale-lease back and capital lease liabilities   

85,021

 

78,246

 

156

 Liabilities of discontinued operations non current 

-

 

-

 

50,954

 Total liabilities  

262,426

 

263,456

 

1,140,181

           

 Shareholders' equity 

         

   Common shares  

519,226

 

519,226

 

476,658

   Additional paid-in capital  

8,710

 

9,099

 

8,569

 Accumulated deficit   

(429,898)

 

(429,207)

 

(524,665)

   Accumulated other comprehensive income  

(2,851)

 

(2,313)

 

53,385

 Total equity attributed to ReneSola Ltd 

95,187

 

96,805

 

13,947

   Noncontrolling interest 

32,002

 

30

 

798

 Total  shareholders' equity 

127,189

 

96,835

 

14,745

           

 Total liabilities and shareholders' equity  

389,615

 

360,291

 

1,154,926

 

 

 

 RENESOLA LTD 

 Unaudited Consolidated Statements of Income 

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

 
 

 Three Months Ended 

 

 Six Months Ended 

 

 Jun 30, 2018 

 

 Mar 31, 2018 

 

 Jun 30, 2017 

 

 Jun 30, 2018 

 

 Jun 30, 2017 

                   

 Net revenues  

27,809

 

44,758

 

1,633

 

72,567

 

1,871

  Total net revenues 

27,809

 

44,758

 

1,633

 

72,567

 

1,871

 Cost of revenues  

(19,598)

 

(36,379)

 

(491)

 

(55,977)

 

(940)

 Gross profit(loss)  

8,211

 

8,379

 

1,142

 

16,590

 

931

                   

 Operating (expenses) income: 

                 

 Sales and marketing  

(173)

 

(128)

 

(402)

 

(301)

 

(492)

 General and administrative  

(2,680)

 

(2,421)

 

(1,450)

 

(5,101)

 

(2,627)

 Other operating income 

544

 

30

 

1

 

574

 

8

 Total operating expenses  

(2,309)

 

(2,519)

 

(1,851)

 

(4,828)

 

(3,111)

                   

 Income(loss) from operations   

5,902

 

5,860

 

(709)

 

11,762

 

(2,180)

                   

 Non-operating (expenses) income: 

                 

 Interest income  

43

 

6

 

12

 

49

 

32

 Interest expense 

(2,623)

 

(1,519)

 

(825)

 

(4,142)

 

(1,694)

 Foreign exchange gains (losses) 

(2,900)

 

1,102

 

2,284

 

(1,798)

 

1,399

 Income (loss) before income tax, noncontrolling interests 

422

 

5,449

 

762

 

5,871

 

(2,443)

                   

 Income tax expense 

(1)

 

(9)

 

(9)

 

(10)

 

(30)

 Net income (loss) from continuing operations 

421

 

5,440

 

753

 

5,861

 

(2,473)

                   

 Discontinued Operations: 

                 

 Loss from discontinued operations 

-

 

-

 

(32,212)

 

-

 

(52,226)

                   

 Net Income(loss)  

421

 

5,440

 

(31,459)

 

5,861

 

(54,699)

                   

 Less: Net income (loss) attributed to noncontrolling interests 

1,112

 

(1)

 

(9)

 

1,111

 

(9)

 Net income (loss) attributed to holders of ordinary shares 

(691)

 

5,441

 

(31,450)

 

4,750

 

(54,690)

                   
                   

 Income per share from continuing operations  

                 

   Basic 

0.00

 

0.01

 

0.00

 

0.02

 

(0.01)

   Diluted 

0.00

 

0.01

 

0.00

 

0.02

 

(0.01)

 Income (loss) per share from discontinued operations  

                 

   Basic 

-

 

-

 

(0.16)

 

-

 

(0.26)

   Diluted 

-

 

-

 

(0.16)

 

-

 

(0.26)

                   
                   
                   

 Weighted average number of shares used in computing loss per share 

               

   Basic 

380,679,598

 

380,678,902

 

200,538,902

 

380,679,598

 

200,538,902

   Diluted 

380,679,598

 

380,818,902

 

200,538,902

 

380,679,598

 

200,538,902

 

 

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SOURCE ReneSola Ltd.

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