JIASHAN, China, August 30, 2013 /PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company") (NYSE: SOL), a leading brand and technology provider of solar photovoltaic ("PV") products, today announced its unaudited financial results for the second quarter ended June 30, 2013.
Second Quarter 2013 Financial and Operating Highlights
"We made substantial progress in the second quarter of 2013, and we are very pleased to deliver Q2 results that exceeded our guidance with record shipment volume and a much improved gross margin," said Mr. Xianshou Li, ReneSola's chief executive officer. "Our focus on improving our selling prices and enhancing the market profile of our products led to increased shipments and a positive gross margin of over seven percent. In the second quarter, we continued to focus on sales and marketing to build our brand image and introduced our proprietary technology to customers across multiple international markets. We have received positive feedback from customers on the quality of our products and continued to win repeat business. Additionally, we developed new downstream products such as mounting systems and inverters, which have received certification in more than 20 countries so far this year. Despite what remains a challenging macro environment and a fiercely competitive solar industry, we are optimistic our investments will set us up for long-term growth and continued geographic expansion."
Second Quarter 2013 Results
Solar Wafer and Module Shipments
2Q13 | 1Q13 | 2Q12 | Q-o-Q% | Y-o-Y% | |
Total Solar Wafer and Module Shipments (MW) | 849.3 | 662.1 | 497.3 | 28.3% | 70.8% |
Wafer Shipments (MW) | 415.2 | 335.5 | 341.0 | 23.8% | 21.8% |
Module Shipments (MW) | 434.1 | 326.6 | 156.3 | 32.9% | 177.7% |
The sequential increase in solar product shipments was mainly the result of an increase in demand for the Company's solar modules, particularly in the United States and Japan.
Net Revenues
2Q13 | 1Q13 | 2Q12 | Q-o-Q% | Y-o-Y% | |
Net Revenues (US$mln) | $377.4 | $284.2 | $233.0 | 32.8% | 61.9% |
Revenues in Q2 2013 increased quarter over quarter due to an increase in the average selling prices ("ASPs") of solar wafers and modules from US$0.22 per watt ("W") and US$0.61/W, respectively, to US$0.23/W and US$0.63/W, respectively, as well as to an increase in module shipments.
Gross Profit (Loss)
2Q13 | 1Q13 | 2Q12 | Q-o-Q% | Y-o-Y% | |
Gross Profit (Loss) (US$mln) | $27.4 | ($5.6) | $1.3 | - | 2007.7% |
Gross Margin | 7.3% | (2.0%) | 0.6% | - | - |
The increase in gross profit was mainly due to an increase in module ASPs.
Operating Loss
2Q13 | 1Q13 | 2Q12 | Q-o-Q% | Y-o-Y% | |
Operating Expenses (US$mln) | $44.0 | $27.8 | $35.9 | 58.3% | 22.6% |
Operating Loss (US$mln) | ($16.6) | ($33.4) | ($34.6) | 50.4% | 52.2% |
Operating Margin | (4.4%) | (11.8%) | (14.9%) | - | - |
The increase in operating expenses was primarily due to a significant increase in the Company's research and development ("R&D") expenses. The increase in sales and marketing expenses was mainly due to an increase in shipping fees and logistics expenses, which were consistent with the increase in solar module shipments.
Foreign Exchange Gain (Loss)
The Company had a foreign exchange loss of US$1.1 million in Q2 2013, compared to a loss of US$3.0 million in Q1 2013. The Company also recognized a US$1.2 million gain on foreign currency derivatives, compared to a gain of US$3.9 million in Q1 2013.
Net Loss Attributable to Holders of Ordinary Shares
2Q13 | 1Q13 | 2Q12 | |
Net Loss (US$mln) | ($21.1) | ($39.0) | ($34.8) |
Diluted Loss per Share | ($0.12) | ($0.23) | ($0.20) |
Diluted Loss per ADS | ($0.24) | ($0.45) | ($0.40) |
Business Highlights
Research and Development
ReneSola increased its R&D investment in Q2 2013 to improve its technology, products, and manufacturing processes. In Q2 2013, the Company continued to invest in the technology and production of modules and wafers, as well as its second-generation Replus microinverter, string inverter, off-grid energy storage systems, and mounting systems.
With regard to solar wafers, the Company's next generation Virtus A+++ wafer, with an average efficiency of 0.15%-0.20% higher than that of Virtus A++, achieved mass production in Q2 2013. With the new technology, the Virtus A+++ wafer has shown highly concentrated cell efficiency distribution and an improved efficiency rate.
Regarding solar modules, the Company's ZEP-compatible module, which is easy to install and handle, also achieved mass production. The Company has invested in the development of light PV panels with strengthened frame structures, as well as black-color modules with low working temperatures, which can significantly enhance their efficiency.
ReneSola continues to invest in its second-generation Mirco Replus microinverter, while optimizing the first generation of the model based on firsthand data from its worldwide network of microinverter plants. During the second quarter, the Replus microinverter and string inverter received numerous certifications, including ETL, TUV SUD, VED and CE, in many key markets. At the same time, over 70 models of the Company's LED products have received TUV certification. The Company has also developed a tile roof system and pitched tin roof system that are expected to receive Australia (AS/NZS 1170) certification and TUV certification and that are already available for order. The Company's first off-grid energy storage system model has also been completed and is now available for order.
Recent Business Developments
Liquidity and Capital Resources
Net cash inflow from operating activities was US$65.5 million in Q2 2013, compared to net cash inflow from operating activities of US$4.2 million in Q1 2013. Net cash and cash equivalents plus restricted cash decreased to US$405.8 million at the end of Q2 2013, compared to US$442.7 million at the end of Q1 2013.
Total debt was US$909.9 million at the end of Q2 2013, compared to US$958.6 million at the end of Q1 2013, excluding US$111.6 million of convertible notes due March 15, 2018, unless repurchased or converted at an earlier date. Short-term borrowings were US$763.6 million at the end of Q2 2013, compared to US$832.8 million at the end of Q1 2013.
Polysilicon Plant Update
In July 2013, the Company's polysilicon production was temporarily impacted by flooding conditions in Sichuan province. Third quarter polysilicon production output is expected to be in the range of 1100 MT to 1300 MT.
Annual General Meeting of Shareholders ("AGM")
All shareholder resolutions proposed at the Company's 2013 AGM held on August 26, 2013 were duly passed, including resolutions to approve an increase in the maximum number of shares the Company is authorized to issue from 500,000,000 shares to 600,000,000 shares and to approve certain amendments to, and a restatement of, the memorandum of association of the Company to provide for future potential issuances of preferred shares, among other things.
Outlook
For Q3 2013, the Company expects total solar wafer and module shipments to be in the range of 730 MW to 750 MW, with solar module shipments expected to be in the range of 430 MW to 450 MW. Q3 revenues are expected to be in the range of US$360 million to US$380 million and gross margin is expected to be in the range of 7% to 9%.
For the full year 2013, the Company expects total solar wafer and module shipments to be in the range of 2.8 GW to 3.0 GW, with solar module shipments expected to be in the range of 1.6 GW to 1.8 GW.
Conference Call Information
ReneSola's management will host an earnings conference call on Friday, August 30, 2013 at 8 am U.S. Eastern Time (8 pm Beijing / Hong Kong time).
Dial-in details for the earnings conference call are as follows:
U.S. / International: | +1-845-675-0437 |
Hong Kong: | +852-2475-0994 |
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 September 6, 2013:
International: | +1-646-254-3697 |
Passcode: | 26323994 |
Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of ReneSola's website at www.renesola.com.
About ReneSola
Founded in 2005, ReneSola (NYSE:SOL) is a leading brand and technology provider of solar PV products. Leveraging its proprietary technologies, economies of scale and technical expertise, ReneSola uses in-house virgin polysilicon and a vertically integrated business model to provide customers with high-quality, cost-competitive products. ReneSola solar modules have scored top PVUSA Test Conditions (PTC) ratings with high annual kilowatt-hour output, according to the California Energy Commission (CEC). ReneSola solar PV modules can be found in projects ranging in size from a few kilowatts to multi-megawatts in markets around the world, including the United States, Germany, Italy, Belgium, China, Greece, Spain and Australia. 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:
Ms. Juliet Yang
ReneSola Ltd
Tel: 86-21-6280-9180 Ext. 105
Email: ir@renesola.com
Mr. Derek Mitchell
Ogilvy Financial, Beijing
Tel: +86-10-8520-3073
Email: sol@ogilvy.com
In the United States:
Mr. Justin Knapp
Ogilvy Financial, U.S.
Tel: +1-616-551-9714
Email: sol@ogilvy.com
RENESOLA LTD | ||||||
Unaudited Consolidated Balance Sheet | ||||||
(US dollars in thousands) | ||||||
June 30, | Mar 31, | June 30, | ||||
2013 | 2013 | 2012 | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | 80,306 | 142,983 | 314,229 | |||
Restricted cash | 325,517 | 299,681 | 79,939 | |||
Accounts receivable, net of allowances for doubtful accounts | 272,112 | 263,737 | 211,184 | |||
Inventories | 343,279 | 292,767 | 209,765 | |||
Advances to suppliers-current | 15,126 | 10,355 | 26,694 | |||
Amounts due from related parties | 4,984 | 9,133 | 1,358 | |||
Value added tax recoverable | 39,516 | 35,271 | 43,953 | |||
Prepaid income tax | 6,585 | 3,011 | 2,614 | |||
Prepaid expenses and other current assets | 25,584 | 27,748 | 15,056 | |||
Project assets | 49,527 | 30,572 | 18,527 | |||
Deferred convertible bond issue costs-current | 784 | 784 | 784 | |||
Derivative assets | 1,933 | 3,417 | 24 | |||
Assets held-for-sale | - | - | 6,103 | |||
Deferred tax assets-current | 2,535 | 2,856 | 20,535 | |||
Total current assets | 1,167,788 | 1,122,315 | 950,765 | |||
Property, plant and equipment, net | 1,148,872 | 1,123,584 | 1,003,293 | |||
Prepaid land use right | 45,800 | 47,250 | 48,488 | |||
Deferred tax assets-non-current | 22,086 | 17,325 | 39,195 | |||
Deferred convertible bond issue costs-non-current | 1,334 | 1,530 | 2,118 | |||
Advances to suppliers-non-current | 5,928 | 5,928 | 12,490 | |||
Advances for purchases of property, plant and equipment | 7,075 | 6,985 | 46,305 | |||
Other long-term assets | 2,757 | 2,365 | 10,597 | |||
Total assets | 2,401,640 | 2,327,282 | 2,119,292 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Short-term borrowings | 763,607 | 832,766 | 691,065 | |||
Accounts payable | 718,491 | 569,391 | 404,021 | |||
Advances from customers-current | 80,399 | 70,067 | 46,714 | |||
Amounts due to related parties | 16,133 | 24,886 | 9,455 | |||
Other current liabilities | 177,770 | 199,620 | 109,855 | |||
Income tax payable | 2,552 | 2,680 | 2,784 | |||
Derivative liabilities | - | 131 | 765 | |||
Total current liabilities | 1,758,952 | 1,699,541 | 1,264,659 | |||
Convertible bond payable-non-current | 111,616 | 111,616 | 111,616 | |||
Long-term borrowings | 146,271 | 125,883 | 130,237 | |||
Advances from customers-non-current | 10,436 | 6,168 | 43,486 | |||
Warranty | 15,412 | 12,317 | 7,006 | |||
Deferred gain | 37,802 | 36,527 | 29,093 | |||
Other long-term liabilities | 7,406 | 8,042 | 12,234 | |||
Total liabilities | 2,087,895 | 2,000,094 | 1,598,331 | |||
Shareholders' equity | ||||||
Common shares | 422,207 | 421,461 | 420,370 | |||
Additional paid-in capital | 5,104 | 5,525 | 4,666 | |||
Retained earnings/(Accumulated losses) | (197,721) | (176,660) | 29,862 | |||
Accumulated other comprehensive income | 83,691 | 76,376 | 65,709 | |||
Total equity attribute to ReneSola Ltd | 313,281 | 326,702 | 520,607 | |||
Noncontrolling interest | 464 | 486 | 354 | |||
Total shareholders' equity | 313,745 | 327,188 | 520,961 | |||
Total liabilities and shareholders' equity | 2,401,640 | 2,327,282 | 2,119,292 | |||
RENESOLA LTD | ||||||
Unaudited Consolidated Statements of Income | ||||||
(US dollar in thousands, except ADS and share data) | ||||||
Three Months Ended | ||||||
June 30, 2013 | Mar 31, 2013 | June 30, 2012 | ||||
Net revenues | 377,362 | 284,165 | 233,038 | |||
Cost of revenues | (349,921) | (289,771) | (231,735) | |||
Gross profit (loss) | 27,441 | (5,606) | 1,303 | |||
GP% | 7.3% | -2.0% | 0.6% | |||
Operating (expenses) income: | ||||||
Sales and marketing | (17,796) | (12,223) | (7,169) | |||
General and administrative | (11,265) | (15,136) | (11,260) | |||
Research and development | (15,007) | (5,982) | (13,690) | |||
Other operating income (expense), net | 55 | 5,522 | (3,539) | |||
Impairment of long-lived assets | - | - | (291) | |||
Total operating expenses | (44,013) | (27,819) | (35,949) | |||
Loss from operations | (16,572) | (33,425) | (34,646) | |||
Non-operating (expenses) income: | ||||||
Interest income | 1,948 | 1,548 | 1,264 | |||
Interest expense | (13,975) | (13,118) | (12,550) | |||
Foreign exchange loss | (1,078) | (3,011) | (4,523) | |||
Gain(loss) on derivatives, net | 1,162 | 3,865 | (669) | |||
Total non-operating expenses | (11,943) | (10,716) | (16,478) | |||
Loss before income tax, noncontrolling interests | (28,515) | (44,141) | (51,124) | |||
Income tax benefit | 7,448 | 5,131 | 16,321 | |||
Net loss | (21,067) | (39,010) | (34,803) | |||
Less: Net loss attributed to noncontrolling interests | (6) | (6) | (16) | |||
Net loss attributed to holders of ordinary shares | (21,061) | (39,004) | (34,787) | |||
Earnings per share | ||||||
Basic | (0.12) | (0.23) | (0.20) | |||
Diluted | (0.12) | (0.23) | (0.20) | |||
Earnings per ADS | ||||||
Basic | (0.24) | (0.45) | (0.40) | |||
Diluted | (0.24) | (0.45) | (0.40) | |||
Weighted average number of shares used in computing earnings per share | ||||||
Basic | 172,876,537 | 172,773,664 | 172,613,664 | |||
Diluted | 172,876,537 | 172,773,664 | 172,613,664 | |||
Unaudited Condensed Consolidated Statement of Comprehensive Income | ||||||
(US dollar in thousands) | ||||||
Three Months ended | ||||||
June 30, 2013 | Mar 31, 2013 | June 30, 2012 | ||||
Net loss | (21,067) | (39,010) | (34,803) | |||
Other comprehensive income | ||||||
Foreign exchange translation adjustment | 7,315 | 1,541 | (5,466) | |||
Other comprehensive income | 7,315 | 1,541 | (5,466) | |||
Comprehensive loss | (13,752) | (37,469) | (40,269) | |||
Less:comprehensive loss attributable to non-controlling interest | (6) | (6) | (16) | |||
Comprehensive loss attributable to Renesola | (13,746) | (37,463) | (40,253) |
RENESOLA LTD | ||||
Unaudited Consolidated Statements of Cash Flow | ||||
(US dollar in thousands) | ||||
Six Months Ended | ||||
June 30, 2013 | June 30, 2012 | |||
Cash flow from operating activities: | ||||
Net loss | (60,078) | (75,023) | ||
Adjustment to reconcile net loss to net cash (used in) provided by operating activity: | ||||
Gain on disposal of land use right | - | (55) | ||
Inventory write-down | 680 | 27,688 | ||
Depreciation and amortization | 52,218 | 45,606 | ||
Amortization of deferred convertible bond issuances costs and premium | 392 | 392 | ||
Allowance of doubtful receivables and advance to suppliers | 2,844 | (216) | ||
(Gains) losses on derivatives | (5,027) | 669 | ||
Share-based compensation | 335 | 555 | ||
Loss on disposal of long-lived assets | 160 | 742 | ||
Gain on disposal of land use right | (4,694) | - | ||
Reversal of firm purchase commitment | - | (2,441) | ||
Changes in assets and liabilities: | ||||
Accounts receivables | (63,053) | (102,889) | ||
Inventories | (86,881) | (85,112) | ||
Project assets | (24,779) | (18,772) | ||
Advances to suppliers | 8,697 | (5,630) | ||
Amounts due from related parties | 2,913 | 9,358 | ||
Value added tax recoverable | (3,977) | (2,524) | ||
Prepaid expenses and other current assets | 9,806 | 2,825 | ||
Prepaid land use rights | - | 80 | ||
Proceeds from disposal of land use right | 8,201 | - | ||
Accounts payable | 226,648 | 168,207 | ||
Advances from customers | 17,397 | (16,089) | ||
Income tax payable | (3,763) | 3,972 | ||
Other current liabilities | 2,606 | 1,104 | ||
Other long-term liabilities | (3,675) | (434) | ||
Accrued warranty cost | 4,899 | (5,741) | ||
Deferred taxes assets | (9,709) | (21,476) | ||
Provision for litigation | (2,430) | 1,781 | ||
Net cash provided by (used in) operating activities | 69,730 | (73,423) | ||
Cash flow from investing activities: | ||||
Purchases of property, plant and equipment | (28,611) | (43,938) | ||
Advances for purchases of property, plant and equipment | (30,427) | (40,407) | ||
Cash received from government subsidy | 7,984 | 634 | ||
Proceeds from disposal of property, plant and equipment | - | (83) | ||
Changes in restricted cash | (146,848) | (22,264) | ||
Net proceeds from settlement of derivatives | 2,782 | 1,126 | ||
Purchases of other long-lived assets | - | (276) | ||
Net cash used in investing activities | (195,120) | (105,208) | ||
Cash flow from financing activities: | ||||
Proceeds from bank borrowings | 798,196 | 570,851 | ||
Repayment of bank borrowings | (686,976) | (457,993) | ||
Proceeds from exercise of stock options | 274 | - | ||
Contribution from noncontrolling interests | (36) | 224 | ||
Net cash provided by financing activities | 111,458 | 113,082 | ||
Effect of exchange rate changes | 955 | 739 | ||
Net decrease in cash and cash equivalent | (12,977) | (64,810) | ||
Cash and cash equivalent, beginning of year | 93,283 | 379,039 | ||
Cash and cash equivalent, end of year | 80,306 | 314,229 |