1

In the first quarter of 2009, the Company recorded a US$68.0 million inventory write-down against the net realizable value of inventories as a result of the rapid decrease in the market price and value of feedstock such as polysilicon and scrap silicon materials, work in progress materials and finished solar wafers.

 

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Earnings (Loss) Before Income Tax

Loss before income tax for Q2 2009 was US$2.9 million, compared to a loss of US$62.8 million for Q1 20091. The Company recognized a net gain of US$5.4 million as a result of its US$40.1 million convertible bond repurchase using cash and issuance of 4,000,000 ordinary shares during the quarter.

Taxation

A tax expense of US$0.7 million was recognized for Q2 2009, compared with a tax benefit of US$32.8 million for Q1 2009, as a result of the inventory write-down in Q1 20091.

Net Income (Loss) Attributable To Holders of Ordinary Shares

Net loss attributable to holders of ordinary shares for Q2 2009 was US$3.6 million, compared to net loss attributable to holders of ordinary shares of US$30.0 million for Q1 20091.

Q2 2009 basic and diluted loss per share was US$0.03, and basic and diluted loss per ADS was US$0.05.

		Three months ended June 30, 2008				Three months ended March 31, 2009				Three months ended June 30, 2009
		(Unaudited)				(Unaudited)				(Unaudited)
Net revenue (US$000)			173,007				106,946				82,629
Gross profit (loss) (US$000)			42,786				(51,087	)			4,251
Gross margin (%)			24.7				(47.8	)			5.1
Operating profit (loss) (US$000)			34,535				(58,346	)			(3,962	)
Foreign exchange loss (US$000)			(797	)			(550	)			(504	)
Profit (loss) for the period (US$000)			23,309				(30,019	)			(3,589	)

“The second quarter of 2009 marked an historic quarter in ReneSola’s evolution as a solar company,” commented Mr. Xianshou Li, ReneSola’s chief executive officer. “During the quarter, we completed our transformation from one of the world’s largest manufacturers of solar wafers into a low-cost, fully integrated producer of solar products following the commencement of production at our 3,000 MT Sichuan polysilicon manufacturing facility and the successful acquisition of JC Solar. We have demonstrated our resilience and ability to achieve strategic and operational milestones despite the continuing difficult operating environment. We expect that as industry fundamentals continue to improve, the benefits brought forward by our fully integrated operations will further enhance our competitive position in the global solar industry.”

Mr. Charles Bai, ReneSola’s chief financial officer, added, “Our results for the second quarter of 2009 marked a significant step toward a return to profitability for ReneSola. In the face of a challenging overall environment, we increased our gross profit margin to 5.1% as a result of prudent inventory and purchasing management and improved manufacturing efficiency. We are hopeful that during the remainder of the year, we will continue to see margin improvement as a result of stable wafer pricing and our inventory carrying value more closely resembling spot polysilicon market prices.”

 

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In the first quarter of 2009, the Company recorded a US$68.0 million inventory write-down against the net realizable value of inventories as a result of the rapid decrease in the market price and value of feedstock such as polysilicon and scrap silicon materials, work in progress materials and finished solar wafers.

 

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Recent Business Developments

Financing Update

ReneSola’s wholly-owned subsidiary, Zhejiang Yuhui Solar Energy Source Co., Ltd (“Zhejiang Yuhui”), recently signed a strategic cooperation agreement (the “agreement”) with Bank of China, Jiaxing Branch (the “Bank”). Under terms of the agreement, the Bank will grant total credit facilities of US$249 million to Zhejiang Yuhui. The new credit facilities include existing credit facilities of US$116 million that the Bank has already granted to Zhejiang Yuhui. The credit facilities include short-term credit lines for working capital, mid- to long-term project loans, loans to fund acquisitions, and domestic and international trade finance. The grant of facilities is subject to approval by the provincial branch of Bank of China.

In addition to the credit facilities, the Bank also intends to provide mid- to long-term financing to solar projects that the Company has been developing, subject to the bank’s internal risk assessment and approval procedures.

Sichuan Polysilicon Facility Launches Production

As announced in mid-July of 2009, the Company successfully commenced production of the first batch of polysilicon from Phase 1 of its two-phase, 3,000 MT annualized capacity polysilicon manufacturing plant. Phase 2 is expected to reach mechanical completion in September of 2009.

Output from the polysilicon facility is expected to be in the range of 400 MT to 500 MT in 2009 and is now expected to increase to between 2,800 MT and 2,900 MT in 2010. The facility utilizes a close-loop Advanced Siemens process for polysilicon production. Polysilicon production cost is expected to decline to between approximately US$40 per kilogram to US$45 per kilogram by the first half of 2010.

Successful Acquisition and Integration of JC Solar

As previously announced, Zhejiang Yuhui entered into an agreement on May 20, 2009 to acquire the entire issued share capital of the solar cell and module manufacturer JC Solar. The acquisition closed on May 31, 2009.

As of June 30, 2009, JC Solar had annual solar cell and module manufacturing capacities of 25 MW and 50 MW, respectively. By the end of 2009, ReneSola is expected to have annual solar cell manufacturing capacity of 100 MW and solar module manufacturing capacity of 250 MW.

Letters of Intent Signed for Domestic Projects

As previously announced, the Company entered into a letter of intent with the Yancheng city government in Jiangsu province to develop a 500 MW on-grid solar power generation project. In addition, the Company has been granted the exclusive right in a letter of intent with the Panzhihua east district government in Sichuan province to develop a 5 MW rooftop project. Both projects are subject to feasibility studies and approvals by various government authorities.

2009 Outlook

The Company expects revenues to increase by 60% to 70% sequentially in Q3.

The Company maintains its full year product shipment outlook of 450 MW to 500 MW and its full year revenue outlook of US$500 million to US$550 million.

 

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Conference Call Information

ReneSola’s management will host an earnings conference call on Wednesday, August 12, 2009 at 8:30 a.m. U.S. Eastern Time / 8:30 p.m. Beijing/Hong Kong time / 1:30 p.m. British Summer Time.

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

 

U.S. / International:		+1-617-614-6205
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 August 19, 2009:

 

International:		+1-617-801-6888
Passcode:		36277347

 

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

ReneSola Ltd (“ReneSola”) is a leading Chinese manufacturer of solar products 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). 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 annual report on Form 20-F. 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.

 

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For Investor and Media Inquiries, Please Contact:

In China:

Ms. Julia Xu

ReneSola Ltd

Tel:       +86-573-8477-3372

Email:    julia.xu@renesola.com

Mr. Derek Mitchell

Ogilvy Financial, Beijing

Tel:       +86-10-8520-6284

Email:   derek.mitchell@ogilvy.com

In the United States:

Ms. Jessica Barist Cohen

Ogilvy Financial, New York

Tel:       +1-646-460-9989

Email:   jessica.cohen@ogilvypr.com

In the UK:

Mr. Tim Feather / Mr. Richard Baty

Hanson Westhouse Limited

Tel:       +44-20-7601-6100

Email:   tim.feather@hansonwesthouse.com / richard.baty@hansonwesthouse.com

 

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CONSOLIDATED BALANCE SHEET

 

		As at				As at				As at
		December 31, 2008				March 31, 2009				June 30, 2009
		US$000				US$000				US$000
ASSETS
Current assets:
Cash and cash equivalents			112,333				172,614				173,543
Restricted cash			5,958				67,394				58,068
Accounts receivable, net of allowances for doubtful receivables			43,160				34,965				35,319
Inventories			193,036				148,856				142,703
Advances to suppliers			36,991				18,930				20,174
Amounts due from related parties			457				441				457
Value added tax recoverable			15,498				22,829				35,374
Prepaid expenses and other current assets			13,722				10,107				5,772
Deferred tax assets			18,979				38,748				12,877
Total current assets			440,134				514,884				484,287
Property, plant and equipment, net			341,427				415,561				510,085
Prepaid land rent, net			13,472				13,372				19,505
Other Intangible assets			-				-				3,934
Deferred tax assets			2,340				15,049				45,568
Deferred convertible bond issue costs			1,970				1,573				834
Advances to suppliers over one year			45,729				48,635				40,958
Advances for purchases of property, plant and equipment			161,705				164,959				139,359
Equity investment			-				-				-
Other long-term assets			1,011				1,064				1,397
Goodwill			-				-				5,323
Total assets			1,007,788				1,175,097				1,251,250
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings			191,987				277,006				347,939
Accounts payable			37,942				37,181				42,055
Advances from customers			49,284				58,584				43,872
Amount due to related party			11,863				24				24
Other current liabilities			42,060				47,156				59,321
Total current liabilities			333,136				419,951				493,211
Convertible bond payable			138,904				139,080				98,992
Long-term borrowings			32,833				135,667				159,586
Advances from customers over one year			105,203				113,181				114,074
Other long-term liabilities			15,624				15,197				20,621
Total liabilities			625,700				823,076				886,484
ReneSola Ltd. Shareholders' equity
Common shares			330,666				330,666				345,645
Additional paid-in capital			17,769				18,457				19,630
Retained earnings  (deficit)			11,294				(18,725	)			(22,313	)
Accumulated other comprehensive income			22,080				21,623				21,804
Total ReneSola Ltd. Shareholders' equity			381,809				352,021				364,766
Noncontrolling interests			279				-				-
Total equity			382,088				352,021				364,766
Total liabilities and equity			1,007,788				1,175,097				1,251,250

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CONSOLIDATED INCOME STATEMENT

 

		Three months ended				Three months ended				Three months ended
		June 30, 2008				March 31, 2009				June 30, 2009
		US$000				US$000				US$000
Net revenues			173,007				106,946				82,629
Cost of revenues			(130,221	)			(158,033	)			(78,378	)
Gross profit (loss)			42,786				(51,087	)			4,251
Operating expenses:
Sales and marketing			(231	)			(116	)			(1,497	)
General and administrative			(4,869	)			(3,956	)			(4,503	)
Research and development			(3,504	)			(3,446	)			(3,401	)
Other general income (expenses)			353				259				1,188
Total operating expenses			(8,251	)			(7,259	)			(8,213	)
Income (loss) from operations			34,535				(58,346	)			(3,962	)
Interest income			234				456				176
Interest expenses			(2,755	)			(4,048	)			(3,972	)
Foreign exchange (loss) gain			(797	)			(550	)			(504	)
Equity in earnings of investee			-				(291	)			-
Gain on early extinguishment of debt, net of inducement charges			-				-				5,353
Income (loss) before income tax			31,217				(62,779	)			(2,909	)
Income tax benefit (expenses)			(6,844	)			32,760				(680	)
Net income (loss)			24,373				(30,019	)			(3,589	)
Less: net (income) loss attributable to noncontrolling interests			(1,064	)			-				-
Net income (loss) attributable to holders of ordinary shares			23,309				(30,019	)			(3,589	)
Earnings (Loss) per share
Basic			0.20				(0.22	)			(0.03	)
Diluted			0.19				(0.22	)			(0.03	)
Weighted average number of shares used in computing earnings per share:
Basic shares			120,159,747				137,624,912				139,383,154
Diluted shares			130,898,990				137,624,912				139,383,154

 

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CONSOLIDATED CASH FLOW STATEMENT

 

		Six months ended				Six months ended
		June 30, 2008				June 30, 2009
		US$000				US$000
Operating activities:
Net income (loss)			40,984				(33,608	)
Adjustment to reconcile net income (loss) to net cash used in operating activities:
Noncontrolling interests			1,122				-
Equity in earnings of investee			-				291
Inventory write-down			-				68,047
Provision for purchase commitment			-				-
Depreciation and amortization			6,112				13,457
Amortization of deferred convertible bond issue costs and premium			1,528				1,426
Allowances for doubtful receivables			253				631
Prepaid land use right expensed			117				127
Change in fair value of derivatives			(573	)			(1	)
Gain on early extinguishment of debt, net of inducement charges			-				(5,353	)
Share-based compensation			1,845				1,861
Impairment in investment			-				-
Loss on disposal of long-lived assets			-				14
Changes in operating assets and liabilities:
Accounts receivable			5,526				9,951
Inventories			(84,370	)			(14,246	)
Advances to suppliers			(43,641	)			19,379
Amounts due from related parties			903				(11,816	)
Value added tax recoverable			5				(19,082	)
Prepaid expenses and other current assets			(3,716	)			7,323
Prepaid land use right			(1,579	)			(110	)
Accounts payable			7,476				2,954
Advances from customers			30,794				2,334
Other liabilities			3,999				2,981
Deferred taxes			5,380				(37,527	)
Accrued Warranty			-				65
Net cash provided by (used in) operating activities			(27,835	)			9,098

 

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Investing activities:
Purchases of property, plant and equipment			(72,998	)			(164,024	)
Advances for purchases of property, plant and equipment			(57,254	)			18,186
Purchase of other long-term assets			-				(447	)
Cash received from government subsidy			-				5,959
Proceeds from disposal of investment			-				(635	)
Proceeds from disposal of property, plant and equipment			-				-
Restricted cash			-				(51,722	)
Cash consideration for acquisition			-				(16,831	)
Cash associated with deconsolidated subsidiary			(4,416	)			-
Net cash used in investing activities			(134,668	)			(209,514	)
Financing activities:
Proceeds from borrowings			120,938				436,780
Repayment of bank borrowings			(40,348	)			(155,437	)
Net proceeds from issuance of common shares			294,012				-
Proceeds from exercised stock option			243				-
Dividend paid			-				-
Cash received from related parties			15				-
Cash paid to related parties			-				-
Cash consideration paid to repurchase convertible bonds			-				(19,781	)
Net cash provided by financing activities			374,860				261,562
Effect of exchange rate changes			8,659				64
Net increase in cash and cash equivalents			221,016				61,210
Cash and cash equivalents, beginning of year			53,137				112,333
Cash and cash equivalents, end of year			274,153				173,543

 

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