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ReneSola Provides Business Update and Announces Second Quarter 2017 Results
--Transaction to Transform Company into Pure Play Downstream Player--
-- Company also Reports Second Quarter 2017 Results--

SHANGHAI, Sept. 27, 2017 /PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company") (www.renesola.com) (NYSE: SOL), a leading fully-integrated solar project developer and provider of energy efficient products, today provides a business update and announces its unaudited second quarter 2017 results.

ReneSola Logo. (PRNewsFoto/ReneSola Ltd)

As announced on September 25, the Company has entered into a definitive share repurchase and subscription agreement (the "SPA") with Mr. Xianshou Li, the Company's Chairman and Chief Executive Officer (the "Buyer") for the sale of the Company's manufacturing (including polysilicon, solar wafer, solar cell and solar module manufacturing) and LED distribution businesses (the "Acquired Businesses"). The transaction will also transfer substantially all of ReneSola's related indebtedness to Li. The transaction will result in:

i) The Company will no longer be liable for the bank borrowings in excess of RMB 3 billion, and the Buyer and his spouse will continue to provide personal guarantees for a majority of such bank's borrowings;

ii) The acquired businesses will cancel approximately $217.3 million of intercompany payables owed to it by the Company; and

iii) The Company will issue 180 million ordinary shares to ReneSola Singapore Pte. Ltd., an entity to be fully owned by the Buyer upon completion.

Mr. Li commented, "This transaction completes the strategic transformation that was initiated in 2015. We will exit the manufacturing business, which has been impaired by overcapacity, pricing pressure and low profitability, and will become a pure play in the rapidly growing and profitable project development market.  We believe this is the best path forward for ReneSola. The losses and a weakened balance sheet of the manufacturing business have been significant constraints on the growth of our downstream business. I am very excited to see ReneSola start anew with a stronger balance sheet, a highly capable team and significant growth opportunities. This transaction represents the beginning of a new chapter for ReneSola."

This transaction will significantly improve the Company's balance sheet, providing the financial flexibility necessary to drive the growth of the Company's project development business. The table below summarizes the pro forma changes in the Company's balance sheet, based on the terms of the transaction when it is completed.

All amounts, other than
percentages, are in millions
of US$

Post- Transaction

June 30, 2017

Pre-Transaction

June 30, 2017

Total Asset

250.0

1,154.9

Total Liabilities

169.5

1,140.2

      ----Bank Borrowings

33.5

701.7

Total Equity

80.5

14.7

Debt-Asset Ratio

67.8%

98.7%

The table below outlines the key benefits that ReneSola expects to derive from this transaction.

Key Benefits

Details

Low Leverage

Eliminate over RMB 3 billion of bank debt


Debt-asset ratio of 68% down from 98.7% as of
June 30, 2017

Lower Management & Financial Costs

Management costs are expected to drop from $46
million to $12 million per year


Financial costs to further decrease

Enhanced Financing Ability for Projects

Lower corporate leverage improves project
bankability


Healthy balance sheet enables the Company to
lower financing cost and achieve attractive IRR
for projects

Restore Investor Confidence

Operate growing project business with proven
track record


Spin-off indebted manufacturing business


Solid global project pipeline to ensure future
growth

Strategic Success

Completes multi-year transition to downstream
business

Project Development Strategy

Since entering the project development business, ReneSola has developed over 480 MW of projects around the world. These projects range from utility scale to smaller rooftop distributed generation. They share the common traits of operating in stable, mature markets with attractive subsidies. The Company believes that its strong track record in solar project development will enable it to accelerate the development of its project pipeline, as well as attract project financing on favorable terms.

While Build-Transfer continues to be an important strategy for the foreseeable future, ReneSola also intends to retain more projects in selected regions and become an independent power producer ("IPP"). The IPP model is especially attractive, due to the resulting high margin recurring revenue.  Over time, the Company intends to shift a meaningful amount of its revenue to recurring power sales.

The Company believes the China rooftop solar market is an especially lucrative opportunity and has aggressively established its presence in that market. Rooftop projects can provide steady cash flow, double-digit IRRs, and reduced risk of curtailment or subsidy delays. ReneSola currently owns over 130 MW of rooftop projects under development, concentrated in a handful of eastern provinces of China with attractive development environments. The Company anticipates to own 150 MW of China's rooftop projects by the end of 2017.

Operating Assets

Capacity (MW)

China DG

131.2

-Zhejiang

33.3

-Anhui

28.8

-Henan

57.9

-Jiangsu

5.7

-Shandong

5.5

Romania

15.4

Mr. Li further commented, "We have demonstrated our ability to successfully build and transfer solar power projects globally. Our project development team consists of 314 dedicated employees around the world. Our strong and capable team, extensive financing relationships and track record of success give us high confidence that we can profitably grow the 'new' ReneSola."

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

Project Location

Shovel-ready (MW)

USA

151.8

UK

4.3

Japan

17.5

Canada

8.6

Turkey

133.0[1]

France

0.3

Poland

55.0

Thailand

5.0

China DG

104.5

Total

480.0

 

[1] With the start of operation, ReneSola holds 50% of the economics in the projects, which are held for sale and expected to be sold in the normal course upon connection or shortly thereafter.

As of September 10, 2017, the Company had a pipeline of over 1 GW of projects in various stages, of which 480 MW are projects that are "shovel-ready". The shovel-ready projects include (i) oversea projects that ReneSola has the right to develop or has self-originated in that ReneSola has obtained definitive agreement, and (ii) projects in China that are either owned by ReneSola and have been filed with PRC National Development and Reform Commission, or third-party projects to which the Company has signed definitive agreements for EPC services. The Company has identified a number of opportunities in China's domestic distributed generation market, and had 104.5 MW of such projects in the shovel-ready stage as of September 10, 2017.

Outlook

For the third quarter of 2017, the Company's project business is expected to generate revenue in the range of $40 to $45 million and overall gross margin in the range of 15% to 20% with the gross margin of IPP business in the range of 65%-70%. The Company expects to connect 20 to 30 MW of projects during the third quarter of 2017.

Second Quarter 2017 Financial Results

The Company today also announced its unaudited financial results for the second quarter of 2017.  Because the majority of revenue and losses are related to the Acquired Businesses being sold, the consolidated results are not indicative of the Company's future financial outlook.  As such, the Company is only presenting a brief summary for informational purposes. 

Second quarter revenue of $151.6 million was down 3.2% sequentially and down 39.4% year-over-year.  Net loss was $31.5 million, compared to net loss of $23.2 million in Q1 2017 and net income of $5.5 million in Q2 2016.

The Company recognized revenue of $3.1 million from the sale of rooftop projects of 3.0 MW in China's domestic distributed generation market in Q2 2017. The Company also signed an agreement to sell a utility-scale project located in North Carolina with a capacity of approximately 6.75 MW with revenue expected to be recognized in Q3 2017. Subsequent to the end of the quarter, the Company signed additional agreements to sell projects overseas, including (i) two ground-mount projects in the United Kingdom with a combined capacity of approximately 10 MW; and (ii) a portfolio of ground-mount projects in North Carolina with an aggregate capacity of 24 MW. These projects are expected to be connected to the grid by December 2017.

Conference Call Information

ReneSola's management will host an earnings conference call on September 27, 2017 at 8:30 a.m. U.S. Eastern Time (8:30 p.m. China 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 77739816.

A replay of the conference call may be accessed by phone at the following numbers until October 5, 2017. To access the replay, please again reference the conference passcode 77739816.


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 of solar project developer and technology provider of energy efficient products. Leveraging its global presence, expansive distribution and sales network, ReneSola is well positioned to develop green energy projects with attractive return and provide its highest quality green energy products 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) 



Jun 30,


Mar 31,


 Jun 30, 



2017


2017


2016

 ASSETS 







 Current assets: 







 Cash and cash equivalents  


28,633


26,634


23,723

 Restricted cash  


110,661


117,783


139,645

 Accounts receivable, net of allowances for doubtful
accounts 


112,185


108,230


185,573

 Inventories 


92,291


153,220


165,470

 Advances to suppliers-current 


15,891


15,727


23,286

 Amounts due from related parties 


12,553


9,385


77

 Value added tax recoverable 


8,084


10,956


5,911

 Prepaid income tax 


1,142


1,115


4,338

 Prepaid expenses and other current assets  


20,723


16,002


18,288

 Project assets 


116,869


75,574


64,756

 Deferred convertible notes issue costs-current  







 Derivative assets 


124


-


2,077

 Assets held-for-sale 


-


8,540


-

 Deferred tax assets-current, net 


-


-


-

 Total current assets  


519,156


543,166


633,144








 Property, plant and equipment, net 


537,595


486,278


568,090

 Prepaid land use right, net 


32,204


31,923


35,842

 Deferred tax assets-non-current, net 


16,766


19,168


14,403

 Advances for purchases of property, plant and
equipment  


3,554


1,824


285

 Deferred project costs 


20,913


19,153


17,576

 Project assets-noncurrent 


4,537


6,103


9,463

 Other long-lived assets 


20,201


18,706


9,943

 Total assets  


1,154,926


1,126,321


1,288,746








 LIABILITIES AND SHAREHOLDERS' EQUITY 














 Current liabilities: 







 Convertible bond payable-current 







 Short-term borrowings  


671,432


647,587


716,512

 Accounts payable  


203,185


221,580


280,609

 Advances from customers-current 


83,954


36,701


20,342

 Amounts due to related parties  


5,076


4,575


2,831

 Other current liabilities  


61,473


59,655


66,536

 Income tax payable 


318


302


128

 Derivative liabilities 


-


371


-

 Warrant liability 


-


-


26

 Total current liabilities  


1,025,438


970,771


1,086,984








 Convertible notes payable-non-current  







 Long-term borrowings  


30,328


31,057


-

 Deferred revenue 


33,305


32,566


28,366

 Warranty  


28,704


28,114


38,870

 Deferred subsidies and other 


21,267


20,943


22,203

 Other long-term liabilities  


1,139


939


15

 Total liabilities  


1,140,181


1,084,390


1,176,438








 Shareholders' equity 







   Common shares  


476,658


476,658


477,171

   Additional paid-in capital  


8,569


8,420


7,994

   Accumulated loss 


(524,665)


(493,215)


(424,020)

   Accumulated other comprehensive income  


53,385


50,068


51,163

 Total equity attribute to ReneSola Ltd 


13,947


41,931


112,308

 Noncontrolling interest 


798


-


-

 Total  shareholders' equity 


14,745


41,931


112,308








 Total liabilities and shareholders' equity  


1,154,926


1,126,321


1,288,746

 

 

RENESOLA LTD 

 Unaudited Consolidated Statements of Income 

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














 Three Months Ended 


Six Months Ended



 Jun 30, 2017 


 Mar 31, 2017 


 Jun 30, 2016 


Jun 30, 2017


Jun 30, 2016












 Net revenues from third parties 


151,632


148,267


250,038


299,899


510,734

 Net revenues from related parties 


-


8,343


-


8,343


0

  Total net revenues 


151,632


156,610


250,038


308,242


510,734

 Cost of revenues  


(147,509)


(154,889)


(208,886)


(302,398)


(425,077)

 Gross profit 


4,123


1,721


41,152


5,844


85,657

 GP% 


2.72%


1.10%


16.50%


1.9%


16.8%

 Operating (expenses) income: 











 Sales and marketing  


(11,753)


(3,776)


(15,152)


(15,529)


(28,652)

 General and administrative  


(12,649)


(12,450)


(13,525)


(25,099)


(26,794)

 Research and development  


(5,352)


(5,707)


(7,424)


(11,059)


(15,614)

 Other operating income 


5,250


2,458


1,324


7,708


4,018

 Total operating expenses  


(24,504)


(19,475)


(34,777)


(43,979)


(67,042)












 Income (loss) from operations  


(20,381)


(17,754)


6,375


(38,135)


18,615



-13.40%


-6.30%


2.50%


-12.37%


3.64%

Non-operating (expenses) income:











 Interest income  


378


312


715


690


1,492

 Interest expense 


(8,571)


(9,248)


(8,477)


(17,819)


(18,337)

 Foreign exchange gains (losses) 


(78)


161


4,336


83


7,281

 Gains (losses) on derivatives, net 


(411)


(332)


2,869


(743)


2,267

Investment gain on disposal of subsidiaries

-


-


-


0


7

Gains on repurchase of convertible bonds

-


-


-


0


213

 Fair value change of warrant liability 


-


-


131


0


551

 Income (loss) before income tax,
noncontrolling interests 


(29,063)


(26,861)


5,949


(55,924)


12,089












 Income tax (expense) benefit 


(2,396)


3,621


(425)


1,225


(832)

 Net income (loss) 


(31,459)


(23,240)


5,524


(54,699)


11,257












 Less: Net income (loss) attributed to
noncontrolling interests 


(9)


0


0


(9)


0

 Net income (loss) attributed to
holders of ordinary shares 


(31,450)


(23,240)


5,524


(54,690)


11,257























 Earnings per share 











   Basic 


(0.16)


(0.12)


0.03


(0.27)


0.06

   Diluted 


(0.16)


(0.12)


0.03


(0.27)


0.06












 Earnings per ADS 











   Basic 


(1.57)


(1.16)


0.27


(2.73)


0.56

   Diluted 


(1.57)


(1.16)


0.27


(2.73)


0.56












Weighted average number of shares used in computing loss per share 








Basic


200,538,902


200,538,902


201,998,340


200,538,902


202,580,825

Diluted


200,538,902


200,538,902


201,998,340


200,538,902


202,580,825












RENESOLA LTD

Unaudited Consolidated Statements of Comprehensive Income (loss)

(US dollar in thousands)














 Three Months Ended 


Six Months Ended 



 Jun 30, 2017 

 Mar 31, 2017 


 Jun 30, 2016 


Jun 30, 2017


Jun 30, 2016

 Net income (loss) 


(31,459)


(23,240)


5,524


(54,699)


11,257

 Other comprehensive income (loss) 











 Foreign exchange translation adjustment 

3,317


(1,165)


(7,921)


2,152


(10,414)

 Other comprehensive income (loss) 


3,317


(1,165)


(7,921)


2,152


(10,414)












 Comprehensive income (loss) 


(28,142)


(24,405)


(2,397)


(52,547)


843

 Less:comprehensive loss attributable to non-controlling interest 

(9)


-


-


(9)


0

 Comprehensive income (loss) attributable to ReneSola 

(28,133)


(24,405)


(2,397)


(52,538)


843

 

 

 RENESOLA LTD 

 Unaudited Consolidated Statements of Cash Flow 

 (US dollar in thousands) 





 Six Months Ended 



Jun 30, 2017


Jun 30, 2016






 Operating activities: 





 Net profit/(loss) 


(54,690)


11,257

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

   Inventory write-down 


4,032


-

   Depreciation and amortization 


38,766


39,275

   Amortization of deferred convertible bond issuances costs and premium 


-


33

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


1,570


131

   Gain (loss) on derivatives 


743


(2,088)

   Fair value change of warrant liability 


-


(551)

   Gain from settlement of certain payables 





   Gain from advances from customers 





   Share-based compensation 


339


512

   Gain (loss) on disposal of long-lived assets 


(3,087)


5,358

   Gain on disposal of solar project 


-


(2,527)

   Impairment of goodwill 





   Impairment of Intangible assets 





   Impairment of  long-lived assets 





   Reversal of firm purchase commitment 





   Gain on disposal of  subsidiaries 





 Gain on CB repurchase 


-


(212)

 Changes in assets and liabilities: 





   Accounts receivable 


114


(29,480)

   Inventories 


2,008


1,119

   Project assets and deferred project cost 


(64,395)


(25,676)

   Advances to suppliers 


(283)


(6,354)

   Amounts due from related parties 


119


257

   Value added tax recoverable 


(4,342)


18,668

   Prepaid expenses and other assets 


7,464


6,658

   Prepaid land use rights, net 


1,342


464

   Accounts payable 


(26,413)


(12,643)

   Advances from customers 


63,261


(8,198)

   Income tax payable 


(51)


(778)

   Other  current liabilities 


2,099


(10,050)

   Deferred revenue 


-


(4,010)

   Other non-current assets 


-


(458)

   Other long-term assets 





   Warranty 


(7,002)


3,821

   Deferred taxes assets 


(468)


1,959

   Other long-term liabilities 


249


-

 Net cash provided by (used in) operating activities 


(38,625)


(13,513)






 Investing activities: 





   Purchases of property, plant and equipment 


(22,750)


(4,162)

   Advances for purchases of property, plant and equipment 


(5,368)


5,140

   Cash received from government subsidy 





 Proceeds from disposal of property, plant and equipment 


74


-

 Advance from disposal of property, plant and equipment 


2,916


-

   Changes in restricted cash  


(12,248)


(2,895)

 Cash consideration for investment, net of cash received  


(885)


-

   Net cash received (paid) on settlement of  derivatives 


(621)


179

   Purchases of investment securities 





   Proceeds from disposal of subsidiaries 





 Net  cash provided by (used in) investing activities 


(38,882)


(1,738)






 Financing activities: 





   Proceeds from bank borrowings 


473,657


497,630

   Proceeds from related parties 


4,374


-

   Repayment of bank borrowings 


(412,199)


(464,338)

   Proceeds from exercise of stock options 





 Paid for CB repurchase 





   Share issuance costs  





   Repurchace from noncontrolling interests 


798


-

   Repurchase of convertible notes 


-


(25,931)

 Cash paid for ADS/s repurchase 


-


(981)

 Net cash provided  by (used in) financing activities 


66,630


6,380






 Effect of exchange rate changes 


2,174


(5,451)






 Net increase (decrease) in cash and cash equivalents 


(8,703)


(14,322)

 Cash and cash equivalents, beginning of period/year 


37,336


38,045

 Cash and cash equivalents, end of period/year 


28,633


23,723

 

 

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