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ReneSola Announces First Quarter 2017 Results

2017-06-15 19:45
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SHANGHAI, June 15, 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 technology products, today announced its unaudited financial results for the first quarter ended March 31, 2017.

 

 

First Quarter 2017 Highlights


Q1 2017

Q/Q Change

Y/Y Change

Revenue

$156.6

-32.5%

-39.9%

Gross Profit

$1.7

-65.4%

-96.1%

Operating Loss

($17.8)

N/A

N/A

Net Loss

($23.2)

N/A

N/A

  • Revenue of $156.6 million exceeded the high end of the guidance range of $130 million to $150 million;
  • Gross margin was 1.1%, compared to 2.1% in Q4 2016 and 17.1% in Q1 2016;
  • Net loss was $23.2 million, compared to net loss of $25.5 million in Q4 2016 and net income of $5.7 million in Q1 2016;
  • Total external module shipments were 266.8 MW while module shipments to the Company's downstream projects were approximately 44.3 MW;  
  • Total external wafer shipments were 259.2 MW, compared to 305.9 MW in Q4 2016 and 351.0 MW in Q1 2016;
  • Recognized revenue of $2.2 million from sale of rooftop projects in China with aggregate capacity of 2.3 MW;
  • Signed agreements to sell a 6.75 MW of utility project in North Carolina and 1.3 MW of utility projects in Holyoke, Massachusetts with revenue expected to be recognized in Q2 2017;
  • Connected two ground-mounted projects in the UK with a combined capacity of approximately 10 MW; revenue is expected to be recognized in Q2;
  • As of June 2, 2017, the Company had a solar power project pipeline of over 1.4GW, of which 613.1 MW are "shovel-ready";
  • LED sales of $9.6 million increased by approximately 3% compared to Q4 2016 with gross margin of approximately 30.9%; and
  • Total borrowings increased by $54.3 million to $678.6 million compared to Q4 2016.

Mr. Xianshou Li, ReneSola's Chief Executive Officer, commented, "First quarter results were generally in-line with our expectation, as we continued to gain traction from our downstream project efforts and LED distribution business, while affected by challenging market conditions of our solar power product business.  We continue to execute our strategy to shift our business focus from manufacturing to downstream project development, and I am excited about the progress we are making.  For the second quarter of 2017, we expect downstream project sales to increase when compared to the first quarter of 2017 due to continued growth in our project pipeline and our solid execution in project monetization."

Li continued, "We remained focused on managing our working capital, controlling costs and improving our balance sheet.  We believe these measures have prepared us well to develop sustainably as we progress through the current industry down-cycle." 

First Quarter 2017 Financial Results

Revenue of $156.6 million was down 32.5% q/q and down 39.9% y/y, but exceeded the guidance of $130 million to $150 million.  The decline in the year-over-year revenue was primarily due to lower module ASP's and reduced product shipments to external customers.

Gross profit of $1.7 million was down 65.4% q/q and 96.1% y/y. Gross margin declined to 1.1% from 2.1% in Q4 2016 and from 17.1% in Q1 2016.  The sequential margin decline was primarily due to lower module ASP's as well as annual maintenance of our polysilicon plant. 

Operating expenses were $19.5 million, representing 12.4% of revenue, down from $26.8 million in Q4 2016 and $32.3 million in Q1 2016. Sales and marketing expenses were $3.8 million, down from $7.3 million in Q4 2016 as we reversed certain warranty expenses to reflect the declining module ASP.

Operating loss was $17.8 million, compared to operating loss of $21.8 million in Q4 2016 and operating income of $12.2 million in Q1 2016. 

Non-operating expenses of $9.1 million included net interest expense of $8.9 million and loss on derivative of $0.3 million, partially offset by foreign exchange gains of $0.2 million.

Net loss was $23.2 million, compared to net loss of $25.5 million in Q4 2016 and net income of $5.7 million in Q1 2016.  Loss per ADS was $1.16[1].

[1] The Company executed a ratio change for its American Depositary Receipt ("ADR") program effective on February 10, 2017. As a result, the number of the Company's shares represented by each ADS was changed from two (2) shares to ten (10) shares.

Balance Sheet, Liquidity and Capital Resources

The Company had cash and cash equivalents (including restricted cash) of $144.4 million as of March 31, 2017, compared to $133.2 million as of December 31, 2016. Total borrowings were $678.6 million, increasing by $54.3 million from $624.3 million as of December 31, 2016. 

First Quarter Operating Highlights

The Company remains focused on developing, operating and selling high-quality solar power projects. Our business activities are centered on building a pipeline of distributed generation and utility-scale projects in attractive locations worldwide.  In the first quarter, the Company continued to monetize its existing solar power project pipelines as part of its development cycle.

Project Sales

The Company recognized revenue of $2.2 million from the sale of rooftop projects of 2.3 MW in China's domestic distributed generation market in Q1 2017.  The Company also signed agreements to sell a utility-scale project located in North Carolina with a capacity of approximately 6.75 MW and two utility-scale projects in Holyoke, Massachusetts with a combined capacity of approximately 1.3 MW in Q1 2017.   The Company expects to recognize revenue from the sales of these projects in Q2 2017.  The Company connected two ground-mounted projects in the UK with a combined capacity of approximately 10 MW with revenue expected to be recognized in Q2.

Project Pipeline

As of June 2, 2017, the Company had a pipeline of over 1.4 GW of projects in various stages, of which 613.1MW 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 are owned by ReneSola and have been filed with National Development and Reform Commission or third-party projects that the Company has signed definitive agreements to provide EPC services to.  The Company identified a number of opportunities in China's domestic distributed generation market, and had 306.8 MW of such projects in shovel-ready stage in its pipeline as of June 2, 2017.  The Company continues to focus on developed markets which are expected to have stable returns and healthy cash flow.

The following table sets forth our shovel-ready projects pipeline by location:

Project Location

Shovel-ready (MW)

USA

99.5

UK

14.3

Japan

17.5

Canada

8.9

Turkey

116.0[2]

France

37.1

Poland

13.0

China DG

306.8

Total

613.1

[2] 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.

The Company currently has over 270 MW project pipelines under construction and plans to construct over an aggregate of 550 MW of projects in the year of 2017. During the construction phase, the projects will be financed by construction loans, as well as installment payments from buyers.

Modules and Wafers

During the first quarter, total external module shipments were 266.8 MW, down 19.3% from Q4 2016 and down 23.9% from Q1 2016. Total wafer shipments were 259.2 MW, down 15.3% from Q4 2016 and down 26.2% from Q1 2016. 

LED

LED revenue of $9.6 million was up by approximately 3% from $9.3 million in Q4 2016.  Gross margin was approximately 30.9%.  The sequential slowdown in LED revenue growth was largely due to short-term adjustment to product offerings, coupled with inventory management in the quarter.

ReneSola remains 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 Q2 2017, the Company expects revenue in the range of $180 to $200 million, external wafer shipments in the range of 220MW to 240MW and external module shipments in the range of 230MW to 250MW.

For full year 2017, the Company expects revenue in the range of $900 million to $1,000 million. 

Conference Call Information

ReneSola's management will host an earnings conference call on June 15, 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 35984787.

A replay of the conference call may be accessed by phone at the following numbers until June 23, 2017.  To access the replay, please again reference the conference passcode 35984787.


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) 



Mar 31,


Dec 31,


 Mar 31, 



2017


2016


2016

 ASSETS 







 Current assets: 







 Cash and cash equivalents  


26,634


37,336


38,687

 Restricted cash  


117,783


95,866


151,339

 Accounts receivable, net of allowances for doubtful accounts 


108,230


116,677


176,391

 Inventories 


153,220


143,976


181,659

 Advances to suppliers-current 


15,727


14,943


28,316

 Amounts due from related parties 


9,385


13,066


95

 Value added tax recoverable 


10,956


3,260


20,573

 Prepaid income tax 


1,115


1,081


1,900

 Prepaid expenses and other current assets  


16,002


22,838


15,901

 Project assets 


75,574


48,177


34,949

 Deferred convertible notes issue costs-current  






-

 Derivative assets 




2,716


-

 Assets held-for-sale 


8,540


7,558


-

 Deferred tax assets-current, net 






2,242

 Total current assets  


543,166


507,494


652,052








 Property, plant and equipment, net 


486,278


491,255


603,248

 Prepaid land use right, net 


31,923


31,850


37,179

 Deferred tax assets-non-current, net 


19,168


15,539


14,121

 Advances for purchases of property, plant and equipment  


1,824


846


1,288

 Deferred project costs 


19,153


16,375


20,874

 Project assets-noncurrent 


6,103


6,710


-

 Other long-lived assets 


18,706


18,337


10,144

 Total assets  


1,126,321


1,088,406


1,338,906








 LIABILITIES AND SHAREHOLDERS' EQUITY 














 Current liabilities: 







 Convertible bond payable-current 







 Short-term borrowings  


647,587


595,434


735,610

 Accounts payable  


221,580


223,303


301,976

 Advances from customers-current 


36,701


21,998


24,985

 Amounts due to related parties  


4,575


1,257


3,189

 Other current liabilities  


59,655


62,126


62,727

 Income tax payable 


302


315


124

 Derivative liabilities 


371




343

 Warrant liability 






158

 Total current liabilities  


970,771


904,433


1,129,112








 Convertible notes payable-non-current  







 Long-term borrowings  


31,057


28,836


1,551

 Deferred revenue 


32,566


32,243


32,376

 Warranty  


28,114


35,059


38,070

 Deferred subsidies and other 


20,943


20,824


23,116

 Other long-term liabilities  


939


866


15

 Total liabilities  


1,084,390


1,022,261


1,224,240








 Shareholders' equity 







   Common shares  


476,658


476,658


477,419

   Additional paid-in capital  


8,420


8,229


7,707

   Accumulated loss 


(493,215)


(469,975)


(429,544)

   Accumulated other comprehensive income  


50,068


51,233


59,084

 Total equity attribute to ReneSola Ltd 


41,931


66,145


114,666

 Total  shareholders' equity 


41,931


66,145


114,666








 Total liabilities and shareholders' equity  


1,126,321


1,088,406


1,338,906








 

 

 RENESOLA LTD 

 Unaudited Consolidated Statements of Income 

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












 Three Months Ended 





 Mar 31, 2017 


 Dec 31, 2016 


 Mar 31, 2016 








 Net revenues from third parties 


148,267


207,502


260,696

 Net revenues from related parties 


8,343


24,572



  Total net revenues 


156,610


232,074


260,696

 Cost of revenues  


(154,889)


(227,103)


(216,191)

 Gross profit 


1,721


4,971


44,505

 GP% 


1.10%


2.1%


17.1%








 Operating (expenses) income: 







 Sales and marketing  


(3,776)


(7,268)


(13,500)

 General and administrative  


(12,450)


(12,277)


(13,269)

 Research and development  


(5,707)


(5,362)


(8,190)

 Other operating income 


2,458


2,737


2,694

 Impairment of long-lived assets and 
    advances for purchases of property,
    plant and equipment
  




(4,625)



 Total operating expenses  


(19,475)


(26,795)


(32,265)








 Income (loss) from operations  


(17,754)


(21,824)


12,240








 Non-operating (expenses) income: 







 Interest income  


312


293


777

 Interest expense 


(9,248)


(7,368)


(9,860)

 Foreign exchange gains (losses) 


161


4,916


2,945

 Gains (losses) on derivatives, net 


(332)


2,002


(602)

 Investment(loss) gain on disposal of subsidiaries 




(75)


7

 Gains on repurchase of convertible
 bonds 






213

 Fair value change of warrant liability 




-


420








 Income (loss) before income tax,
noncontrolling interests 


(26,861)


(22,056)


6,140








 Income tax (expense) benefit 


3,621


(3,407)


(407)

 Net income (loss) 


(23,240)


(25,463)


5,733








 Less: Net income (loss) attributed to
noncontrolling interests 







 Net income (loss) attributed to
holders of ordinary shares 


(23,240)


(25,463)


5,733















 Earnings per share 







   Basic 


(0.12)


(0.13)


0.03

   Diluted 


(0.12)


(0.13)


0.03








 Earnings per ADS 







   Basic 


(1.16)


(1.26)


0.28

   Diluted 


(1.16)


(1.26)


0.28








 Weighted average number of shares used in computing loss per share 




   Basic 


200,538,902


201,774,449


203,163,310

   Diluted 


200,538,902


201,774,449


203,163,310




















































 Mar 31, 2017 


 Dec 31, 2016 


 Mar 31, 2016 

 Net income (loss) 


(23,240)


(25,463)


5,733

 Other comprehensive income (loss) 







 Foreign exchange translation adjustment 

(1,165)


233


(2,493)

 Other comprehensive income (loss) 


(1,165)


233


(2,493)








 Comprehensive income (loss) 


(24,405)


(25,230)


3,240

 Less:comprehensive loss attributable to non-controlling interest 




-

 Comprehensive income (loss) attributable to Renesola 

(24,405)


(25,230)


3,240








 

 

 RENESOLA LTD 

 Unaudited Consolidated Statements of Cash Flow 

 (US dollar in thousands) 



 Three Months Ended 



Mar 31, 2017


Mar 31, 2016






 Operating activities: 





 Net profit/(loss) 


(23,240)


5,733

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

   Inventory write-down 


1,615


0

   Depreciation and amortization 


20,920


21,218

   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 


(28)


(1,108)

   Gain (loss) on derivatives 


332


(56)

   Fair value change of warrant liability 




(420)

   Gain from settlement of certain payables 





   Gain from advances from customers 




0

   Share-based compensation 


191


225

   Gain (loss) on disposal of long-lived assets 


676


1,208

   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 


6,295


(15,263)

   Inventories 


(11,209)


2,489

   Project assets and deferred project cost 


(26,691)


(3,227)

   Advances to suppliers 


(522)


(9,728)

   Amounts due from related parties 


3,793


509

   Value added tax recoverable 


(7,593)


4,413

   Prepaid expenses and other assets 


7,051


10,415

   Prepaid land use rights, net 


204


230

   Accounts payable 


(4,044)


(1,196)

   Advances from customers 


12,441


(3,465)

   Income tax payable 


(41)


1,548

   Other  current liabilities 


(3,360)


(15,696)

   Deferred revenue 





   Other non-current assets 





   Other long-term assets 





   Warranty 


(7,241)


1,854

   Deferred taxes assets 


(3,366)


(1,044)

   Other long-term liabilities 


65


(319)

 Net cash provided by (used in) operating activities 


(33,752)


(4,386)






 Investing activities: 





   Purchases of property, plant and equipment 


(11,441)


(2,240)

   Advances for purchases of property, plant and equipment 


(865)


-

   Cash received from government subsidy 




-

 Proceeds from disposal of property, plant and equipment 


63


-

 Advance from disposal of property, plant and equipment 


2,905



   Changes in restricted cash  


(21,076)


(10,211)

   Net cash received (paid) on settlement of  derivatives 


284


420

   Proceeds from disposal of subsidiaries 




5,140

 Net  cash provided by (used in) investing activities 


(30,130)


(6,891)






 Financing activities: 





   Proceeds from bank borrowings 


269,850


264,262

   Proceeds from related parties 


3,340


-

   Repayment of bank borrowings 


(222,513)


(227,058)

   Proceeds from exercise of stock options 





 Paid for CB repurchase 




(25,931)

 Cash paid for ADS/s repurchase 




(733)

 Net cash provided  by (used in) financing activities 


50,677


10,540






 Effect of exchange rate changes 


2,503


1,379






 Net increase (decrease) in cash and cash equivalents 


(10,702)


642

 Cash and cash equivalents, beginning of period/year 


37,336


38,045

 Cash and cash equivalents, end of period/year 


26,634


38,687

 

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/renesola-announces-first-quarter-2017-results-300474570.html

Source: ReneSola Ltd.

Related stocks: NYSE:SOL

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