ReneSola Announces Third Quarter 2016 Results

Dienstag, 29.11.2016 13:00 von

PR Newswire

SHANGHAI, Nov. 29, 2016 /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, 2016.

Logo

Third Quarter 2016 Highlights


Q3 2016

(in million)

Q/Q Change

Y/Y Change

Revenue

$187.0

-25.2%

-49.2%

Gross Profit

$18.9

-54.2%

-68.2%

Operating loss

($11.9)

N/A

N/A

Net Loss

($20.5)

N/A

N/A

  • Revenue was $187.0 million, compared with guidance of approximately $200 million;
  • Gross margin of 10.1% was in-line with guidance, compared with 16.5% in Q2 2016 and 16.1% in Q3 2015;
  • Net loss was $20.5 million, compared with net income of $5.5 million in Q2 2016 and $8.6 million in Q3 2015;
  • Total external module shipments were 191.2 MW while module shipments to the Company's downstream projects were approximately 6.1 MW;
  • Total external wafer shipments were 290.5 MW compared with 423.3 MW in Q2 2016 and 341.6 MW in Q3 2015;
  • Successfully sold two utility-scale projects in Japan with total capacity of 2.5 MW and rooftop projects in China with aggregate capacity of 1.3 MW;
  • Recognized revenue of $27.8 million from the sale of four utility-scale projects in UK with capacity of approximately 20 MW;
  • The Company now has a solar power project pipeline of over 1 GW, of which 448 MW are projects that are "shovel-ready"; and
  • LED sales decreased by 8.9% compared to Q2 2016 with gross margin of approximately 30%

Mr. Xianshou Li, ReneSola's Chief Executive Officer, commented, "Third quarter financial results fell short of expectations, as weak demand led to reduced shipments and significant pricing pressure. While we tackled prevailing market challenges through expense control, we reported our first loss after four consecutive profitable quarters. Nonetheless, we executed on key elements of our strategy. We expanded our downstream project pipeline to over 1 GW, of which over half are late-stage and we plan to monetize them in the next one to two years. We also paid down short-term debt during the quarter, which demonstrates our commitment and ability to improve our balance sheet."

Li continued, "Looking forward, we anticipate the solar industry headwinds to continue into 2017. As we navigate challenging market conditions, we intend to remain fully focused on project development with rapid monetization, expansion through technology improvements, and streamlined operations with prudent cost control."

Third Quarter 2016 Financial Results

Revenue of $187.0 million was down 25.2% q/q and down 49.2% y/y. Revenue declined due to lower blended ASP and reduced product shipments to external customers due to decreased market demand. The Company remains committed to using the solar products business as a foundation to drive growth through downstream project development.

Gross profit of $18.9 million was down 54.2% q/q and down 68.2% y/y. Gross margin decreased to 10.1% from 16.5% in Q2 2016 and from 16.1% in Q3 2015. The sequential margin decline was primarily due to lower wafer and module ASPs, as well as an increase in polysilicon cost.

Operating expenses of $30.7 million were down 11.6% q/q and down 35.9% y/y. The decrease in operating expenses reflects efficient expense control. Sequentially, SG&A expense decreased by 16.5% and R&D expense decreased by 15.0%.

Operating loss was $11.9 million, compared to operating income of $6.4 million in Q2 of 2016 and $11.4 million in Q3 of 2015.

Non-operating expenses of $10.6 million include net interest expense of $7.7 million and foreign exchange loss of $3.3 million, partially offset by gains on derivatives of $0.3 million.

Net loss was $20.5 million, compared to a net income of $5.5 million in Q2 of 2016 and $8.6 million in Q3 of 2015. Loss per ADS were $0.20, compared to earnings per ADS $0.05 in Q2 of 2016.

Balance Sheet, Liquidity and Capital Resources

The Company had cash and cash equivalents (including restricted cash) of $139.4 million as of September 30, 2016, compared with $163.4 million at the end of Q2 2016. The decrease of $24.0 million is mainly due to the repayment of our fully pledged loan. Total debt was $699.0 million, down from $716.5 million as of June 30, 2016. Total debt decreased by $17.5 million in the quarter.

Third Quarter Operating Highlights

The Company focused on developing, operating and selling high-quality solar power projects. Activities are centered on building a pipeline of distributed generation and utility-scale projects in attractive geographies worldwide.

Project Sales

In the third quarter, the Company recognized revenue from four utility-scale projects in the United Kingdom sold in the second quarter. These projects had approximately 20.0 MW of generating capacity. Additionally, the Company sold two utility-scale projects in Japan with a total capacity of 2.5 MW and rooftop projects of 1.3 MW in the domestic Chinese market in the third quarter.  

Project Sales

Location

Size (MW)

Collacott

UK

5.0

Handley

UK

5.0

Stretton

UK

5.0

Debdale

UK

5.0

Ibaraki

Japan

1.2

Gifu

Japan

1.3

DG

China

1.3

As announced in early November, the Company signed agreements to sell six utility-scale projects in the United Kingdom to a European buyer. These projects have a combined capacity of approximately 26MW. Revenue from the sales of these projects is expected to be recognized in the fourth quarter of 2016.

Project Pipeline

The Company currently has a pipeline of over 1 GW of projects in various stages, of which 448 MW are projects that are "shovel-ready". The shovel-ready projects include (i) projects that are overseas and that Renesola has the legal right to develop based on definitive agreements, and (ii) projects in China that have been filed with National Development and Reform Commission. The Company identified a number of opportunities in China's domestic distributed generation market, and now has 187.3 MW of such projects which are in shovel-ready stage in its pipeline. The Company continues to focus on developed markets which are expected to have stable returns and healthy cash flow.

The geographic distribution of our shovel-ready projects pipeline is outlined in the table below.

Project Location

Shovel-ready (MW)

USA

104.7

UK

9.3

Japan

17.5

Canada

9

Turkey

116.0[1]

France

4.2

China DG

187.3

Total

448

[1] With the start of operation, the projects will be transferred into a joint venture, in which Renesola is expected to hold 50% of equity interest of the 116MW projects.

Modules and Wafers

The Company supplies high quality products at low cost to select customers. The Company considers its competitive advantages to be improving conversion efficiency and supply chain management.

During the third quarter, total external module shipments were 191.2 MW, down 32.3% from the second quarter of 2016 and down 52.9% from the third quarter of 2015. Total wafer shipments were 290.5 MW, down 31.4% from the second quarter of 2016 and down 15.0% from the third quarter of 2015. The reduction in shipments reflected softened demand in the domestic market, as project completions were pulled into the first half in order to qualify for higher FiT.

LED

LED revenue of $7.1 million was down 8.9% from $7.8 million in Q2 2016. Gross margin was approximately 30%. The decline in revenue reflects the temporary slowdown attributable to Ramadan and the summer holidays in Europe.

Despite the sequential revenue decline, ReneSola is optimistic about the growth prospects in LED business. The market for energy efficient products is large and growing rapidly. LED lighting is one of the most effective products for reducing electricity consumption. The Company believes it can leverage its brand name and global distribution footprint to build an attractive, high margin business. The Company expects LED business to grow into a meaningful financial contributor in the years ahead.

Outlook

For the fourth quarter, the Company expects revenue in the range of $220 million and $240 million and gross margin in the high-single digits. The outlook reflects reduced shipments due to weak domestic demand, high polysilicon prices, and declining wafer prices.

Conference Call Information

ReneSola's management will host an earnings conference call on November 29, 2016 at 8:30 a.m. U.S. Eastern Standard Time (9:30 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 19425900.

A replay of the conference call may be accessed by phone at the following numbers until December 7, 2016. To access the replay, please again reference the conference passcode 19425900.


Phone Number

Toll-Free Number

United States

+1 6462543697

+1 8554525696

Hong Kong

+852 30512780

+852 800963117

Mainland China

+86 8008700206

+86 4006022065


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.

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. 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) 



 Sep 30, 


 Jun 30, 


Sep 30,



2016


2016


2015

 ASSETS 







 Current assets: 







 Cash and cash equivalents  


28,834


23,723


86,489

 Restricted cash  


110,538


139,645


146,533

 Accounts receivable, net of allowances for doubtful accounts 


172,747


185,573


128,143

 Inventories 


185,210


165,470


198,857

 Advances to suppliers-current 


17,528


23,286


37,889

 Amounts due from related parties 


13,252


77


118

 Value added tax recoverable 


16,537


5,911


13,310

 Prepaid income tax 


1,451


4,338


1,814

 Prepaid expenses and other current assets  


12,054


18,288


31,284

 Project assets 


53,766


64,756


23,345

 Deferred convertible notes issue costs-current  






76

 Derivative assets 


624


2,077


224

 Assets held-for-sale 






-

 Deferred tax assets-current, net 




-


4,504

 Total current assets  


612,541


633,144


672,586








 Property, plant and equipment, net 


547,748


568,090


667,377

 Prepaid land use right, net 


35,491


35,842


38,923

 Deferred tax assets-non-current, net 


12,188


14,403


15,699

 Deferred convertible notes issue costs-non-current 






-

 Advances for purchases of property, plant and equipment  


285


285


677

 Deferred project costs 


17,275


17,576


20,874

 Project assets-noncurrent 


8,573


9,463



 Other long-lived assets 


12,522


9,943


9,747

 Total assets  


1,246,623


1,288,746


1,425,883








 LIABILITIES AND SHAREHOLDERS' EQUITY 














 Current liabilities: 







 Convertible bond payable-current 






26,145

 Short-term borrowings  


699,035


716,512


685,311

 Accounts payable  


281,257


280,609


321,239

 Advances from customers-current 


11,193


20,342


58,218

 Amounts due to related parties  


1,762


2,831


2,716

 Other current liabilities  


69,506


66,536


90,786

 Income tax payable 


128


128


128

 Derivative liabilities 






-

 Warrant liability 




26


263

 Total current liabilities  


1,062,881


1,086,984


1,184,806








 Convertible notes payable-non-current  






-

 Long-term borrowings  






39,008

 Advances from customers-non-current 






-

 Deferred revenue 


30,101


28,366


30,541

 Warranty  


39,614


38,870


37,159

 Deferred subsidies and other 


21,904


22,203


23,904

 Other long-term liabilities  


375


15


149

 Total liabilities  


1,154,875


1,176,438


1,315,567








 Shareholders' equity 







   Common shares  


477,171


477,171


478,527

   Additional paid-in capital  


8,089


7,994


7,516

   Accumulated loss 


-444,512


(424,020)


(441,933)

   Accumulated other comprehensive income  


51,000


51,163


66,206

 Total equity attribute to ReneSola Ltd 


91,748


112,308


110,316

 Total  shareholders' equity 


91,748


112,308


110,316








 Total liabilities and shareholders' equity  


1,246,623


1,288,746


1,425,883

 

RENESOLA LTD

Unaudited Consolidated Statements of Income

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










Three Months Ended 



Sep 30, 2016


Jun 30, 2016


Sep 30, 2015








Net revenues from third parties


171,428


250,038


368,239

Net revenues from related parties


15,600





Cost of revenues 


(168,160)


(208,886)


(308,901)

Gross profit


18,868


41,152


59,338

GP%


10.1%


16.5%


16.1%








Operating (expenses) income:







Sales and marketing 


(11,544)


(15,152)


(19,861)

General and administrative 


(12,387)


(13,525)


(14,825)

Research and development 


(6,311)


(7,424)


(9,803)

Other operating income


(489)


1,324


(3,436)

Total operating expenses 


(30,731)


(34,777)


(47,925)








Income (loss) from operations 


(11,863)


6,375


11,413



-6.9%


2.5%


3.1%

Non-operating (expenses) income:







Interest income 


568


715


656

Interest expense


(8,235)


(8,477)


(11,047)

Foreign exchange gains (losses)


(3,324)


4,336


5,695

Gains (losses) on derivatives, net


323


2,869


(620)

Investment gain on disposal of subsidiaries


68





Gains on repurchase of convertible bonds






1,891

Fair value change of warrant liability


26


131


788








Income (loss) before income tax, noncontrolling interests


(22,437)


5,949


8,776








Income tax (expense) benefit


1,945


(425)


(179)

Net income (loss)


(20,492)


5,524


8,597








Less: Net income (loss) attributed to noncontrolling interests







Net income (loss) attributed to holders of ordinary shares


(20,492)


5,524


8,597















Earnings per share







  Basic


(0.10)


0.03


0.04

  Diluted


(0.10)


0.03


0.04








Earnings per ADS







  Basic


(0.20)


0.05


0.08

  Diluted


(0.20)


0.05


0.08








Weighted average number of shares used in computing loss per share





  Basic


201,990,602


201,998,340


204,658,446

  Diluted


201,990,602


201,998,340


204,658,446

























Three Months Ended





Sep 30, 2016


Jun 30, 2016


Sep 30, 2015

Net income (loss)


(19,465)


5,524


8,597

Other comprehensive income (loss)







Foreign exchange translation adjustment


6,654


(7,921)


(13,834)

Other comprehensive income (loss)


6,654


(7,921)


(13,834)








Comprehensive income (loss)


(12,811)


(2,397)


(5,237)

Less:comprehensive loss attributable to non-controlling interest





-

Comprehensive income (loss) attributable to Renesola

(12,811)


(2,397)


(5,237)

 

RENESOLA LTD

Unaudited Consolidated Statements of Cash Flow

(US dollar in thousands)


 Nine Months Ended 


Sep 30, 2016

Sep 30, 2015




Operating activities:



Net profit/(loss)

(9,235)

(11,731)

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



  Inventory write-down


643

  Depreciation and amortization

59,142

68,866

  Amortization of deferred convertible bond issuances costs and premium

33

723

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

864

(2,000)

  Loss on derivatives

(709)

4,872

  Fair value change of warrant liability

(578)

(1,628)

  Gain from settlement of certain payables


(6,159)

  Gain from advances from customers



  Share-based compensation

607

4

  Loss on disposal of long-lived assets

5,184

267

  Gain on disposal of solar project

(2,527)

-

  Impairment of goodwill



  Impairment of Intangible assets



  Impairment of  long-lived assets


4,350

  Reversal of firm purchase commitment



  Gain on disposal of  subsidiaries


-

 Gain on CB repurchase 

(212)

(13,693)




Changes in assets and liabilities:



  Accounts receivable

(18,360)

(19,663)

  Inventories

(21,768)

120,663

  Project assets and deferred project cost

(10,062)

17,524

  Advances to suppliers

(907)

(10,906)

  Amounts due from related parties

(13,992)

(4,453)

  Value added tax recoverable

7,679

16,471

  Prepaid expenses and other current assets

10,000

12,149

  Prepaid land use rights, net

685

978

  Proceeds from disposal of land use right



  Deferred project costs



  Accounts payable

(8,677)

(135,195)

  Advances from customers

(17,092)

(22,651)

  Income tax payable

2,165.00

(601)

  Other  current liabilities

(5,740)

(10,753)

  Deferred revenue

(2,275)

30,541

  Other long-term liabilities

(565)

(855)

 Other non-current assets 


(2,872)

  Other long-term assets



  Accrued warranty cost

4,623

6,241

  Deferred taxes assets

4,313

(1,282)

  Provision for litigation

364


Net cash provided by (used in) operating activities

(17,040)

39,850




Investing activities:



  Purchases of property, plant and equipment

(6,754)

(5,283)

  Advances for purchases of property, plant and equipment


(2,383)

  Cash received from government subsidy


-

Proceeds from disposal of property, plant and equipment

5,131

25

  Changes in restricted cash 

25,812

(28,203)

  Net cash received (paid) on settlement of  derivatives

108

(3,426)

  Purchases of investment securities



  Proceeds from disposal of subsidiaries


20

Net  cash provided by (used in) investing activities

24,297

(39,250)




Financing activities:



  Proceeds from bank borrowings

766,311

747,166

  Proceeds from issuance of common shares



  Proceeds from related parties



  Repayment of bank borrowings

(752,829)

(701,089)

  Proceeds from exercise of stock options


1,761

 Paid for CB repurchase 

(25,931)

(54,377)

  Share issuance costs 



  Repurchace from noncontrolling interests



  Repurchase of convertible notes



Cash paid for ADS/s repurchase

(981)


Net cash provided by (used in) financing activities

(13,430)

(6,539)




Effect of exchange rate changes

(3,038)

(7,420)




Net increase (decrease) in cash and cash equivalents

(9,211)

(13,359)

Cash and cash equivalents, beginning of period/year

38,045

99,848

Cash and cash equivalents, end of period/year

28,834

86,489

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SOURCE ReneSola Ltd.