SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2019
Commission File Number: 001-33911
B, Future Land Holdings Tower
No. 5, Lane 388, Zhongjiang Road
Putuo District, Shanghai 200062
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F þ Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|By:||/s/ Xianshou Li|
|Title:||Chief Executive Officer|
Date: April 10, 2019
|Exhibit 99.1||Press Release|
April 8, 2019
2018 was an excellent year for ReneSola, as we executed on the business transformation strategy we initiated fifteen months ago. Strong operating and financial results reflect growing business momentum and improving earnings power. Although revenue declined 6% year-over-year, we meaningfully improved our profitability. Operating and net profit grew 137% and 59%, respectively. In 2018, we successfully connected 27.2 MW of DG projects in China, 58.4 MW of DG projects in Europe, and 6.8 MW of solar power projects in the U.S. Furthermore, our healthy balance sheet provides the financial flexibility to drive growth. Our global late-stage pipeline increased to 772.5 MW, while our total project pipeline is a robust 1.7 GW.
We are enthusiastic about our opportunities around the world. With our talented team, diversified geographic coverage and track record of success at every stage of project development, we are well-positioned to deliver profitable growth in the years ahead.
Full Year 2018 Highlights
Below are financial and operating highlights for the full year 2018. The modest revenue decline was more than offset by improving margins and solid expense control, resulting in attractive growth in operating income, EBITDA, and net income.
|Income before Income Tax and Noncontrolling interests from continuing operations||$||4.9||$||3.5||+39||%|
|Net Income from continuing operations||$||5.1||$||3.2||+59||%|
|·||Revenue decreased 6% to $96.9 million from $103.0 million in 2017;|
|·||Key constituents of revenue:|
|o||$48.8 million from Project Development business|
|o||$29.3 million from IPP business|
|o||$18.5 million from EPC services for DG projects in China|
|·||Gross margin was 29.0%, compared to 13.7% in 2017;|
|·||Income before income tax and noncontrolling interests was $ 4.9 million, compared to $3.5 million in 2017;|
|·||Connected 27.2 MW of rooftop projects in China;|
|·||Connected 58.4 MW of DG projects in Poland, Hungary and France;|
|·||Connected 6.8 MW solar projects and sold 13.7 MW community solar projects rights in U.S.;|
|·||Sold 18.5 MW solar projects in UK;|
|·||Solar power project pipeline of approximately 1.7 GW, of which 772.5 MW are late-stage projects.|
Fourth Quarter 2018 Highlights
Below are financial and operating highlights for the fourth quarter of 2018.
|Q4 2018 |
|Q3 2018 |
|Operating Income (loss)||($||1.9||)||$||5.7||-133||%|
|Income (loss) before Income Tax and Noncontrolling interests from continuing operations||($||4.5||)||$||3.6||-227||%|
|Net Income from continuing operations||($||4.3||)||$||3.6||-221||%|
|·||Revenue was $5.6 million, below the guidance range of $20 to $30 million;|
|·||Key constituents of revenue:|
|o||$2.5 million from the Project Development business|
|o||$5.4 million from the IPP business, primarily from the sale of electricity in China|
|o||($2.3) million from foreign currency translation adjustment|
|·||Gross margin was 51.4%, compared to 45.9% in Q3 2018;|
|·||Loss before income tax and noncontrolling interests from continuing operations was $4.5 million, compared to income of $3.6 million in Q3 2018 and $ 2.0 million in Q4 2017;|
|·||Connected 30.0 MW of DG projects in Poland, 7.7 MW of “micro projects” in Hungary, and 1.6 MW of rootop DG projects in China.|
Fourth quarter revenue was $5.6 million, down substantially both year-over-year and sequentially and well below guidance. Two asset sales we expected to have completed in Hungary (7.7 MW) and Poland (14 MW) were delayed, as due diligence on those assets took longer than anticipated. Energy sales were $5.4 million, mostly from the 37.9 million KwH generated by our rooftop DG projects in China.
Full year revenue of $96.9 million was down from 2017 mainly because of the project sales that slipped out of Q4. Had those sales been recognized as planned, revenue would have been up 14% year-over-year, representing our second consecutive year of growth.
Gross Profits and Gross Margin
Gross profit was $2.9 million in Q4 of 2018, yielding a gross margin of 51.4%. This compares to a gross profit of $8.6 million and gross margin of 45.9% in Q3 of 2018, and a gross profit of $6.8 million and gross margin of 10.5% in Q4 of 2017. The increase in gross margin was due to the improved margin from project sales For the full year 2018, gross profit was $28.1 million, yielding a gross margin of 29.0%. This compares to a gross profit of $14.1 million and gross margin of 13.7% in 2017. The better gross margin was due to the disposal of the manufacturing business in the second half of 2017, combined with the greater proportion of higher-margin electricity sales.
Q4 operating expenses were $4.8 million, up from $2.9 million in Q3 of 2018 and $1.9 million in Q4 of 2017. Both sales and marketing expenses of $0.5 million and general and administrative expenses of $2.5 million were generally unchanged sequentially, as the Company exercised disciplined expense control.
Operating loss in Q4 of 2018 was $1.9 million, compared to operating income of $5.7 million in Q3 of 2018 and operating income of $4.9 million in Q4 of 2017. Operating margin was -34% in Q4 of 2018, compared to 30.4% in Q3 of 2018.
For the full year 2018, operating expenses were $12.5 million, up from $7.6 million in 2017. Sales and marketing expenses were $0.9 million, down from $1.7 million in 2017. General and administrative expenses were $10.2 million, up from $6.2 million in 2017. Operating income was $15.5 million in 2018, compared to $6.6 million in 2017. Operating margin was 16.0% in the full year of 2018, up from 6.4% in 2017.
Net loss was $4.3 million in Q4 of 2018, compared to net income $3.6 million in Q3 of 2018 and net income of $1.7 million in Q4 of 2017. Net income was $5.1 million in the full year 2018, compared to $3.2 million in 2017.
Our balance sheet remains healthy. We had year-end cash and equivalents of $6.8 million, down $1.3 million over the course of the quarter. We incurred capital expenditures for construction activity on our projects in Poland and Hungary. Long-term borrowings were $41.4 million as of December 31, 2018, compared to $73.3 million as of September 30, 2018. The decrease was mainly due to the reclassification of the $40.7 million Poland construction loan from long term borrowings to short term borrowings, which are due in December 2019. Long-term failed sale-lease back and capital lease liabilities, associated with the financial leasing payables for rooftop projects in China, were $77.9 million as of December 31, 2018, compared to $79.9 million as of September 30, 2018.
The development pipeline is strong at around 1.7 GW, of which 773 MW are late-stage. This late stage features 772.5 megawatts in the US, Canada, Poland, France, Hungary, Spain, India, South Korea, Vietnam, and China. Approximately 54 .3MW of the late stage is 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 highlights our late-stage project pipeline by location:
Operating Assets and Completed Projects for Sale
We continue to pursue opportunities around the world. We believe our development strategy can capitalize on key trends in solar energy development, such as rooftop DG and community solar. Our risk profile is attractive, due to the geographic diversification of our assets. We currently own 231.7 MW of operating rooftop projects. Of the 231.7 MW of assets, we operate 212 MW of rooftop projects in China, 15.4 MW in Romania, and 4.3 MW in the United Kingdom. Looking ahead, we have 11.6 MW of rooftop projects under construction in China.
|Operating Assets||Capacity (MW)|
|- Zhejiang& Shanghai||75.2|
As of December 31, 2018, we had 51.7 MW of completed projects, which are currently for sale.
Development Update by Region
In China, we now operate approximately 212 MW of rooftop solar, concentrated in a few eastern provinces with favorable development environments. The commercial and industrial electricity prices in those provinces are relatively high, and electricity off-takers are generally credit-worthy enterprises. Self-consumption DG projects in those provinces are attractive investments. In order to evolve the Company into an asset-light solar project developer, we expect eventually to monetize our China DG assets. This will further strengthen our balance sheet, reduce leverage, and improve cash flow.
In addition to DG projects, we intend to develop and monetize 350MW of ground-mounted unsubsidized projects located in the Northern provinces in 2019.
|China: Late-stage Pipeline||Capacity |
|-Zhejiang & Shanghai||8.6||Project Development|
The US remains a large and important market for us. Our late-stage projects total 340.2 MW, of which 119.1 MW are community solar projects in Minnesota and New York. Additionally, we are pursuing small utility-scale projects in Utah, Texas, Florida, Arizona, Colorado and California. Of the late-stage projects, 24.1 MW of which are under construction and expected to be connected to the grid in the second quarter of 2019.
On March 15, 2019, ReneSola and Nautilus Solar Energy announced Nautilus's acquisition of a 21.1 MW community solar portfolio in Minnesota that was developed by ReneSola. Nautilus is a leading U.S. company engaged in solar project acquisition, development and asset management. This project portfolio represents Nautilus’s third acquisition of community solar assets from ReneSola. Similar to the previous acquisitions announced between both parties in 2017 and 2018, this community solar portfolio is also qualified under Xcel Energy's industry leading community solar program.
|Utah||UT||10.7||Self-consumption / DG||Development||2019||Project Development|
|RP-MN||MN||21.6||Community Solar||Development||2019||Project Development|
|MN-VOS||MN||12.6||Community Solar||Development||2019||Project Development|
|New York||NY||84.9||Community Solar||Development||2019||Project Development|
In Canada, we have 7.6 MW of late-stage projects, all of which are under construction and should connect to the grid in the second quarter of 2019. All 7.6 MW of projects are eligible for the FiT 3 scheme.
|Canada: Late-stage Pipeline||Location||Capacity
In Poland, we have total projects of 37 MW, of which 11MW are under construction. We plan for the 11 MW to come online gradually throughout the second quarter of 2019. These are all part of the projects awarded to us in the government auction last year. Our Poland portfolio consists of 55 installations of 1 MW each.
In November of 2018, we announced that we were awarded 26 solar utility projects in Poland with capacity of 1 MW for each. All of these 26 projects are under the CFD regime and eligible for a 15-year guaranteed tariff of PLN 354.8 to 358.8 per MWh, close to the highest auction price of PLN 364.9/MWh. We are excited to once again have been awarded the utility projects in Poland. This project win validates our ability to deliver reliable, cost-competitive distributed power to serve the growing energy demand in the region.
|Auction 2017 Jun||Poland||11.0||DG||Construction||2019||Project Development|
|Auction 2018 Jun||Poland||26.0||DG||Ready to build||2019||Project Development|
In Hungary, we continue to invest in small-scale DG projects. Our late-stage pipeline has more than 67 “micro projects”, with an average size of 0.5 MW per project, bringing total capacity to 33.6 MW. All of these “micro projects” will start construction in the second quarter of 2019.
Additionally, in February of 2019, we announced that we entered into a bridge financing agreement with Eiffel Energy Transition Fund for our solar projects in Hungary and Poland. Under the terms of the agreement, Eiffel Energy Transition Fund will finance ReneSola's 41.3 MW projects in Hungary and 55MW projects in Poland in the amount of 13,428,000 Euro. This facility demonstrates the confidence that the capital markets put in our ability to successfully develop projects in these geographies. We continue to expect both Hungary and Poland to be growth markets for us in the years ahead.
|Portfolio of “Micro PPs”, 0.5 MW each||Hungary||33.6||DG||Ready to build||2019||Project Development|
In India, we have secured a project pipeline of 50 MW. Most projects are ground-mounted open access projects, similar to U.S. community solar. Indian projects can sell electricity to different commercial & industrial off-takers under long-term PPAs. Our strategy in India is a pure project developer model. We would like to develop projects to the shovel-ready stage and then sell the project rights to investors. This model allows us to leverage our expertise in project development and our global network of solar project investors.
In France, we formed a strategic partnership with Green City Energy to jointly develop four solar parks with a total installed capacity of 69.0 MW in 2018. With a total installed capacity of 69 MW, the four parks will generate approximately 105 million kW hours of electricity per year. Additionally, the Company was awarded solar projects in France with a combined capacity of 2.5 MW in the last tender. Our total project pipeline in France is now at 71.5 MW.
Beyond those geographies, we are actively pursuing opportunities in other international markets, including Spain, South Korea and Vietnam. In Spain, we have a late-stage pipeline of 12 MW of private PPA projects, and in South Korea we secured a 9 MW ground mounted project.We are making meaningful progress in Vietnam , where we obtained the land right of a 200 MW ground mounted project.
|Spain PPA||Spain||12.0||Utility||Development||2019||Project Development|
|South Korea||South Korea||9.0||Utility||Development||2019||Project Development|
In sum, we have a geographically diversified project portfolio, and I am optimistic about the opportunities ahead of us.
For 2019, we expect our project business to generate revenue in the range of $150 to $170 million and overall gross margin in the range of 20% to 25%. For the first quarter of 2019, we expect revenue to be in the range of $8 to $10 million and overall gross margin in the range of 0% to 5%. The majority of our operating expenses are headcount related. We ended the year with 222 full-time employees, down from 314 employees in 2017. We will continue to streamline our operations with prudent cost control.
Our strategy is to execute a global asset-light project development model, with a focus on distributed generation and community solar. Our revenue streams come from the sale of shovel-ready project rights, the sale of build-and-transfer projects after grid connection, and the sale of electricity from IPP business . Our best margins result from monetizing project rights and from electricity sales. Downstream projects represent a large global opportunity for us, and we are excited about our business prospects. Our talented team, diversified geographic coverage and record of accomplishment put us in a prime position to grow profitably.
In closing, I would like to thank our customers, partners and shareholders for their continued support and contribution to our strong results. I especially want to thank our employees for their hard work and dedication. We enter 2019 in a position of strength. We continue advancing toward our goal of becoming a global leader in solar power project development. We are optimistic about the outlook, and look forward to building upon our success in the years ahead.
/s/ Xianshou Li
Chairman and Chief Executive Officer
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 0.9 million to the opening balances of retained earnings in the first quarter of 2018. There was no adjustment in the fourth quarter of 2018.
Conference Call Details
ReneSola's management will host an earnings conference call on April 8, 2019 at 8:30 a.m. U.S. Eastern Time (8:30 p.m. China Standard Time).
Dial-in details for the earnings conference call are as follows:
|Phone Number||Toll-Free Number|
|United States||+1 (845) 675-0437||+1 (866) 519-4004|
|Hong Kong||+852 30186771||+852 (800) 906601|
+86 (800) 819-0121
+86 (400) 620-8038
|Other International||+65 6713-5090|
The call passcode is 2773517.
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 April 15, 2019. To access the replay, please again reference the conference passcode 2773517.
|Phone Number||Toll-Free Number|
|United States||+1 (646) 254-3697||+1 (855) 452-5696|
|Hong Kong||+852 3051-2780||+852 (800) 963117|
+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.
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:
Ms. Ella Li
+86 (21) 6280-9910 x206
The Blueshirt Group Asia
Mr. Gary Dvorchak, CFA
+86 (138) 1079-1480
In the United States:
The Blueshirt Group
Mr. Ralph Fong
+1 (415) 489-2195
Unaudited Consolidated Balance Sheets
(US dollars in thousands)
|Dec 31,||Sep 30,||Dec 31,|
|Cash and cash equivalents||6,750||8,067||13,429|
|Accounts receivable, net of allowances for doubtful accounts||34,484||39,155||23,312|
|Inventories , net of inventory provisions||-||169||-|
|Advances to suppliers-current, net||380||649||380|
|Value added tax recoverable||12,808||16,784||15,229|
|Prepaid expenses and other current assets||14,319||6,740||10,543|
|Project assets current||64,258||63,479||76,556|
|Deferred project costs current||-||-||17,957|
|Total current assets||135,275||138,000||170,075|
|Property, plant and equipment, net||190,787||192,541||154,659|
|Deferred tax assets-non-current, net||1,111||1,103||59|
|Project assets non-current||44,082||43,023||7,481|
|Other non-current assets||6,459||774||3,425|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Advances from customers-current||103||19||237|
|Amounts due to related parties||23,239||22,401||60,370|
|Other current liabilities||52,749||37,932||30,515|
|Income tax payable||707||796||330|
|Deferred project revenue current||-||20,792|
|Total current liabilities||133,738||93,298||145,198|
|Failed sale-lease back and capital lease liabilities||77,875||79,922||67,505|
|Additional paid-in capital||9,364||8,665||9,012|
|Accumulated other comprehensive loss||(4,493||)||(4,790||)||(2,238||)|
|Total equity attributed to ReneSola Ltd||90,670||94,780||90,482|
|Total shareholders' equity||124,666||128,927||90,482|
|Total liabilities and shareholders' equity||377,714||375,441||335,699|
Unaudited Consolidated Statements of Income
(US dollars in thousands, except ADS and share data)
|Three Months Ended||Twelve Months Ended|
|Dec 31, 2018||Sep 30, 2018||Dec 31, 2017||FY 2018||FY 2017|
|Total net revenues||5,574||18,765||64,809||96,906||102,974|
|Cost of revenues||(2,708||)||(10,152||)||(57,975||)||(68,837||)||(88,842||)|
|Operating (expenses) income:|
|Sales and marketing||(466||)||(119||)||(617||)||(886||)||(1,710||)|
|General and administrative||(2,499||)||(2,599||)||(1,664||)||(10,199||)||(6,179||)|
|Other operating income (expenses)||(1,796||)||(189||)||355||(1,453||)||313|
|Total operating expenses||(4,761||)||(2,907||)||(1,926||)||(12,538||)||(7,576||)|
|Income (loss) from operations||(1,895||)||5,706||4,908||15,531||6,556|
|Non-operating (expenses) income:|
|Foreign exchange gains (losses)||(1,069||)||406||(1,740||)||(2,461||)||895|
|Other income (loss)||305||(58||)||347||(44||)|
|Income (loss) before income tax, noncontrolling interests||(4,541||)||3,577||1,990||4,907||3,522|
|Income tax expense||202||(3||)||(290||)||189||(322||)|
|Net income (loss) from continuing operations||(4,339||)||3,574||1,700||5,096||3,200|
|Income from discontinued operations||-||-||-||-||31,258|
|Less: Net income attributed to noncontrolling interests||142||2,084||-||3,337|
|Net income/(loss) attributed to Renesola Ltd||(4,481||)||1,490||1,700||1,759||34,458|
|Income/(loss) attributed to ReneSola Ltd per share from continuing operations|
|Income attributed to ReneSola Ltd per share from discontinued operations|
|Weighted average number of shares used in computing income/(loss) per share|
Unaudited Consolidated Statements of Cash Flow
(US dollar in thousands)
|For The Year Ended|
|Dec 31, 2018||Dec 31, 2017|
|Net cash provided by (used in) operating activities||(51,086||)||18,430|
|Net cash used in investing activities||(40,400||)||(156,354||)|
|Net cash provided by financing activities||85,825||102,404|
|Effect of exchange rate changes||1,258||11,613|
|Net decrease in cash and cash equivalents and restricted cash||(4,403||)||(23,907||)|
|Cash and cash equivalents and restricted cash, beginning of year||13,429||37,336|
|Cash and cash equivalents and restricted cash, end of year||9,026||13,429|