ReneSola Ltd Announces Third Quarter 2010 Results

JIASHAN, China, Nov. 5, 2010 /PRNewswire-Asia-FirstCall/ -- ReneSola Ltd ("ReneSola" or the "Company") (NYSE: SOL) (AIM: SOLA), a leading global manufacturer of solar wafers and provider of solar module original equipment manufacturer ("OEM") services, today announced its unaudited financial results for the third quarter ended September 30, 2010.

Third Quarter 2010 Financial and Operating Highlights

• Total solar wafer and module shipments in Q3 2010 were a record 324.9 megawatts ("MW"), an increase of 25.8 % from 258.3 MW in Q2 2010.

• Q3 2010 net revenues were a record US$358.7 million, an increase of 41.3% from US$253.9 million in Q2 2010.

• Q3 2010 gross profit was US$116.7 million with a gross margin of 32.5%, compared to gross profit of US$76.6 million with a gross margin of 30.2% in Q2 2010.

• Q3 2010 operating income was US$86.4 million with an operating margin of 24.1%, compared to operating income of US$52.5 million with an operating margin of 20.6% in Q2 2010.

• Q3 2010 net income was a record US$60.1 million, representing basic and diluted earnings per share of US$0.35 and basic and diluted earnings per American depositary share ("ADS") of US$0.70.

• The Company generated strong operating cash flow of US$118.7 million in Q3 2010, bringing cash and cash equivalents and restricted cash at the end of Q3 2010 to US$286.6 million, compared with US$246.6 million at the end of Q2 2010, while further reducing total debt from US$577.1 million at the end of Q2 2010 to US$542.2 million at the end of Q3 2010.

"Continuous cost reduction efforts coupled with robust market demand has led us to deliver another quarter of impressive financial and operating results," said Mr. Xianshou Li, ReneSola's chief executive officer. "As we focus on the production of high-quality wafers supported by module services, our growing in-house polysilicon production capacity will allow us to more effectively hedge our upstream risk and seize opportunities that will further define our company as a leading provider of solar energy."

Julia Xu, ReneSola's chief financial officer, added, "Our ongoing emphasis on improving manufacturing efficiencies has led to another quarter of improved margins and a substantial increase in our top and bottom line results. Additionally, our strong cash flow generation and prudent capital expenditures have resulted in a net cash balance of US$286.6 million for the first nine months of 2010, improving our capital structure and positioning us well for further expansion in 2011."

Results for the Third Quarter 2010

Product Shipments

Net Revenues

Record revenues in Q3 2010 were driven by a combination of higher average selling prices ("ASP") and strong growth in our module business.

Gross Profit

Operating Income (Loss)

Increases in operating expenses were primarily due to AIM delisting fees of US$2.0 million as a result of the cost of conversion of shares into ADSs and an increase in research and development costs of US$1.8 million for the production improvement of wafer processing.

Net Income (Loss) Attributable to Holders of Ordinary Shares

The Company achieved record net income of US$60.1 million, an increase of 66.7% from US$36.1 million in Q2 2010. Basic and diluted earnings per share were US$0.35, and basic and diluted earnings per ADS were US$0.70.

Business Highlights

Polysilicon Update

The Company will continue to build out its polysilicon production capabilities in the coming quarters in order to mitigate raw material volatility and diversify procurement risk. The Company produced approximately 269 metric tonnes ("MT") of polysilicon in Q3 2010, an increase of 66.0% from approximately 162 MT in Q2 2010. The Company expects to yield 500 MT to 600 MT of polysilicon during Q4 2010 with production cost reduced to US$45 per kilogram by the end of the quarter. The plant is on target to produce 3,000 MT to 3,500 MT with production cost below US$35 per kilogram by the end of the first half of 2011.

Wafer Business

ReneSola's wafer business continued to excel in Q3 2010 as wafer processing cost was further reduced to US$0.25/watt ("W") with average polysilicon input cost of US$50 per kilogram to US$55 per kilogram. The Company's prudent control over raw material procurement has led to steady polysilicon input prices which has provided protection against rising polysilicon spot prices. For Q4 2010, the Company expects to lower its wafer processing cost to US$0.24/W and achieve average polysilicon cost of US$55 per kilogram to US$60 per kilogram. Year-to-date, the Company has signed 9 new long-term wafer contracts for a period of 1 to 5 years under fixed volume and fixed pricing schedules, totaling 820 MW for 2011, which shall represent 68% of the Company’s expected wafer product shipments.

Module Business

ReneSola continues to advance its downstream module business. The Company delivered record module shipments of 98.3 MW with an ASP of US$1.85/W in Q3 2010. The Company remains confident that its downstream platform will enhance its competitive edge by providing additional value to its customers. The Company expects to achieve similar module shipments and ASP in Q4 2010 and expects module shipments to reach 400 MW in 2011.

Strong Operating Cash Flows and Improved Capital Structure

The Company generated strong operating cash flows of US$118.7 million in the third quarter of 2010, bringing total operating cash flows to US$287.1 million for the first nine months of 2010. Consistently strong operating cash flows and a net cash and cash equivalents and restricted cash position of US$286.6 million at the end of Q3 2010, compared to US$246.6 million at the end of Q2 2010, allowed the Company to steadily reduce its net debt-to-equity ratio to below 50% as of September 30, 2010. The Company expects to continue to generate strong operating cash flows with similar trajectory during the fourth quarter of 2010, placing the Company in a good position to continue increasing its cash while holding its debt level steady for the remainder of 2010.

Capacity Expansion Plans and Related CAPEX

ReneSola spent US$86.7 million on capital expenditures during the first nine months of 2010 and is expected to spend another US$51.1 million in 2010, bringing total capital expenditure in 2010 to US$137.8 million. The Company expects to spend US$150 million in 2011 to expand wafer production capacity from the current 1.2 GW to 1.8 GW while increasing module production capacity from the current 375 MW to 600 MW.

AIM Cancellation

At ReneSola's annual general meeting on August 20, 2010, the Company passed a resolution to cancel its AIM quotation effective November 30, 2010 or such later date as the Company's directors may determine. Application has therefore been made to cancel the AIM quotation with effect from November 30, 2010.

Company Appoints New Vice President of Wafer Manufacturing

The Company recently appointed Robin Liu as vice president of wafer manufacturing. Mr. Liu previously served as the Company's vice general manager and director of its silicon wafer division. Mr. Liu has over 14 years of experience in engineering and operations management having previously served as a senior manufacturing manager at Kemet (Suzhou) Co., Ltd., industrial operations manager at Schneider (Suzhou) Transformers Co., Ltd., a manufacturing center manager and head of production and engineering at Royal Philips Electronic Sound Solutions Beijing, and an engineer with The Waterborne Transportation Institute of The Ministry of Communications. Mr. Liu received a degree in mechanical engineering from Shanghai Tongji University in 1996.

Outlook

Reflecting the robust market demand for solar products, ReneSola increases its Q4 2010 guidance. The Company expects total solar wafer and module shipments to be in the range of 310 MW to 330 MW, revenues to be in the range of US$340 million to US$360 million and gross profit margin to be between 30% to 32% in Q4 2010.

Full year 2010 solar wafer and module shipments are expected to be in the range of 1.13 GW to 1.15 GW. For the full year 2011, the Company expects solar wafer and module shipments to be in the range of 1.6 GW to 1.7 GW, representing an increase of 42% to 48% year-over-year.

Conference Call Information

ReneSola's management will host an earnings conference call on Friday, November 5, 2010 at 8 am U.S. Eastern Time / 8 pm Beijing/Hong Kong time / 12 pm Greenwich Mean Time.

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

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 November 12, 2010:

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 is a leading global manufacturer of solar wafers and producer of solar power products based in China. Capitalizing on proprietary technologies, economies of scale, low-cost production capabilities and technological innovations and know-how, ReneSola leverages its in-house virgin polysilicon and solar cell and module production capabilities to provide its customers with high-quality, cost-competitive solar wafer products and OEM services. The Company possesses a global network of suppliers and customers that includes some of the leading global manufacturers of solar cells and modules. ReneSola's shares are traded on the New York Stock Exchange (NYSE: SOL) and the AIM of the London Stock Exchange (AIM: SOLA).

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.