Home Quarter Results ReneSola Announces Third Quarter 2018 Results
ReneSola Announces Third Quarter 2018 Results

ReneSola Announces Third Quarter 2018 Results

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SHANGHAI: ReneSola Ltd (“ReneSola” or the “Company”) (www.renesolapower.com) (NYSE: SOL), a leading solar project developer, today announced its unaudited financial results for the third quarter ended September 30, 2018.

Mr. Xianshou Li, ReneSola’s Chief Executive Officer, commented, “We delivered another quarter of solid performance, as the effort to execute on ReneSola’s transformation over the past twelve months continued to yield results.  Revenue was once again at the high end of our expectations, and we meaningfully improved both gross and operating margins. Net income for the third quarter grew significantly, despite the sequential revenue decline of more than 30%, as anticipated.  These strong results reflect our accelerating business momentum and improving earnings power.”

Li continued, “Our overall solar power project pipeline remains solid at around 1.5 GW, and we continue to be optimistic about our opportunities around the world.  We believe that our talented team, diversified geographic coverage and track record of success at every stage of project development positions us for profitable growth in the years ahead.”

Third Quarter 2018 Highlights

Q3 2018

($ millions)

Q2 2018

($ millions)

Q/Q Change

Revenue

$18.8

$27.8

-33%

Gross Profit

$8.6

$8.2

+5%

Operating Income

$5.7

$5.9

-3%

EBITDA

$7.9

$5.2

+53%

Income before Income Tax and Noncontrolling interests

$3.6

$0.4

+748%

Net Income

$3.6

$0.4

+749%

  • Revenue was $18.8 million, toward the high end of the guidance range of $15 to $20 million;
  • Key constituents of revenue:- $5.5 million from the Project Development business, mainly from sales of community solar projects in MinnesotaUnited States and France;- $3.3 million from EPC services for distributed generation projects in China– $10.0 million from the sale of electricity
  • Gross margin was 46%, compared to 30% in Q2 2018;
  • Income before income tax and noncontrolling interests was $3.6 million, compared to $0.4 million in Q2 2018 and $4.0 million in Q3 2017;
  • Connected 6.2 MW of rooftop projects in China;
  • Sold 13.9 MW of community solar projects in MinnesotaUnited States and 6.7 MW of projects in France;
  • Solar power project pipeline of approximately 1.5 GW, of which 783.3 MW are late-stage projects.

Third Quarter 2018 Financial Results

Revenue was $18.8 million, compared to $27.8 million in Q2 2018 and $36.3 million in Q3 2017.

Revenue from the Project Development business was $5.5 million, due mainly to sales of 13.9 MW of community solar projects in MinnesotaUnited States and 6.7 MW of projects in France.

Revenue from the EPC business was $3.3 million due to EPC services for 3.7 MW of distributed generation projects in China.

Revenue from the sale of electricity was $10.0 million. The Company generated 66.1 Million Kwh of electricity from its operating DG projects in China.

Gross profit was $8.6 million, compared to a gross profit of $8.2 million in Q2 2018 and $6.4 million in Q3 2017. Gross margin was 46%, compared to 30% in Q2 2018, mainly due to the seasonality of solar irradiation and better margins in the project development business.

Operating expenses were $2.9 million, up from $2.3 million in Q2 2018 and $2.5 million in Q3 2017. Sales and marketing expenses were $0.1 million, slightly down from $0.2 million in Q2 2018. General and administrative expenses were $2.6 million, slightly down from $2.7 million in Q2 2018.

Operating income was $5.7 million, down from $5.9 million in Q2 2018 and up from $3.8 million in Q3 2017.   Operating margin was 30.4%, compared to 21.2% in Q2 2018.

Total non-operating expenses of $2.1 million included interest expenses of $2.6 million, interest income of $0.1 millionand foreign exchange gains of $0.4 million, mainly driven by the appreciation of the Polish zloty against the Euro.

Income before income tax and noncontrolling interests was $3.6 million, compared to $0.4 million in Q2 2018 and $4.0 million in Q3 2017.

Net income was $3.6 million, compared to $0.4 million in Q2 2018 and $4.0 million in Q3 2017.

Financial Position

The Company had cash and cash equivalents of $8.1 million as of September 30, 2018, compared to $24.8 million as of June 30, 2018.  The decline was mainly due to capital expenditures associated with construction activity for our projects in Poland and Hungary. Long-term borrowings were $73.3 million as of September 30, 2018, compared to $72.7 millionas of June 30, 2018. The increase was mainly due to the project loan for Hungarian projects. Long-term failed sale-lease back and capital lease liabilities, associated with the financial leasing payables for rooftop projects in China, were $79.9 million as of September 30, 2018, compared to $85.0 million as of June 30, 2018.

Recent Business Updates

  • On November 8, 2018, ReneSola announced that it entered into a letter of intent (LOI) to sell its 55MW of solar projects in Poland to Chroma Impact Investment, a global investor in renewable energy that focuses on large-scale solar, B2B and storage projects.  ReneSola’s 55 MW of Polish projects consists of 55 individual projects, each with a capacity of 1 MW. These projects will sell power under Poland’s Contract for Difference (CFD) regime and are eligible for a 15-year guaranteed tariff.
  • On September 11, 2018, ReneSola and Nautilus Solar Energy, LLC (“Nautilus”), a leading national solar project acquisition, development and asset management company, announced Nautilus’s acquisition of a second 13.3 MW community solar portfolio developed by ReneSola. Similar to the initial acquisition announced last year, this community solar portfolio also qualified under Xcel Energy’s rapidly expanding community solar program in Minnesota.

Operating Assets and Completed Projects for Sale

The Company continues to pursue opportunities in small-scale projects in diversified regions and believes its strategy can capitalize on trends in solar energy development. ReneSola currently owns  232 MW of operating rooftop projects, which are concentrated in a handful of eastern provinces in China with attractive development environments.  As of September 30, 2018, the Company had approximately 132 MW of projects under construction.

Operating Assets

Capacity (MW)

China DG

212.0

– Zhejiang& Shanghai

75.2

– Jiangsu

13.9

– Henan

61.7

– Anhui

32.1

– Hebei

17.3

– Shandong

7.5

– Fujian

4.3

Romania

15.4

United Kingdom

4.3

Total

231.7

As of September 30, 2018, the Company had 14.0 MW of completed projects, which are currently for sale.

Completed Projects for Sale

Capacity (MW)

Poland

14.0

Total

14.0

Project Pipeline

As of September 30, 2018, the Company had a project pipeline of approximately 1.5 GW, of which 783.3 MW are late-stage projects. 131.8 MW of the late-stage projects are under construction. Late-stage projects include (i) projects with the legal right to develop based on definitive agreements, including the projects held by project SPVs or joint-ventured project SPVs where control can be purchased by the Company once the late stage is reached, and (ii) projects for which a PPA or FiT has been arranged.

The following table sets forth the Company’s late-stage project pipeline by location:

Project Location

Late-stage (MW)

Under Construction (MW)

USA

347.0

24.0

Canada

7.6

7.6

Poland

41.0

41.0

Hungary

42.6

42.6

France

71.5

Spain

12.0

India

236.0

South Korea

9.0

China DG

16.6

16.6

Total

783.3

131.8

China

China: Late-stage Pipeline

Capacity

(MW)

Business Model

-Zhejiang & Shanghai

12.3

Project Development

-Jiangsu

4.3

Project Development

China DG

16.6

United States

In the U.S, the Company has a late-stage pipeline of 347.0 MW, 24.0 MW of which are under construction and expected to be connected to the grid in the fourth quarter of 2018.

US: Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected COD

Business Model

RP-NC

NC

24.1

Utility

Construction

2018

Project Development

Utah

UT

10.7

Self-consumption / DG

Development

2018

Project Development

RP-MN

MN

20.6

Community Solar

Development

2018

Project Development

MN-VOS

MN

15.4

Community Solar

Development

2019

Project Development

New York

NY

87.6

Community Solar

Development

2019

Project Development

RP-CA

CA

23.6

Utility

Development

2019

Project Development

Florida

FL

100.0

TBD

Development

2019

Project Development

Alpine

TX

65.0

TBD

Development

2019

Project Development

Total

347.0

Canada

In Canada, the Company has a late-stage pipeline of 7.6 MW projects, all under construction and expected to be connected to the grid by the end of 2018.  All 7.6 MW of projects are eligible for Canada’s FiT3 Scheme.

Canada: Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected COD

Business Model

FiT3

Ontario

7.6

DG

Construction

2018

Project Development

Total

7.6

Poland

In Poland, the Company has a late-stage pipeline of 41.0 MW, which are all under construction. This pipeline is included in the package of projects intended to be sold to Chroma Investment.

Poland: Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected COD

Business Model

Auction 2017 Jun

Poland

41.0

DG

Development

2018/2019

Project Development

Total

41.0

Hungary

In Hungary, the Company grew its late-stage pipeline to 71 “Micro PPs” projects with a total capacity of 42.6 MW, all of which are under construction.

Hungary: Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected COD

Business Model

Portfolio of “Micro PPs”, 0.5 MW each

Hungary

42.6

DG

Construction

2018/2019

Project Development

Total

42.6

France

In France, the Company formed a strategic partnership with Green City Energy to jointly develop four solar parks with a total installed capacity of 69.0 MW.  Additionally, the Company was awarded solar projects in France with a combined capacity of 2.5 MW in the last tender.

France: Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected COD

Business Model

SOLARPARK

France

69.0

Utility

Development

2019

Project Development

SPV2

France

2.5

DG

Development

2019

Project Development

Total

71.5

India

In India, the Company has a pipeline of 236.0 MW, which are self-consumption or open access projects with top-rated commercial and industrial off-takers.

Other Geographies: Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected COD

Business Model

Andhra Pradesh

India

30.0

DG

Development

2019

Project Development

Gujarat

India

5.0

DG

Development

2019

Project Development

Andhra Pradesh

India

56.0

DG

Development

2020

Project Development

Gujarat

India

45.0

DG

Development

2019/2020

Project Development

Rajasthan

India

50.0

DG

Development

2019

Project Development

Maharashtra

India

50.0

DG

Development

2020

Project Development

Total

236.0

Other Geographies

In Spain, the Company has a late-stage pipeline of 12.0 MW of private PPA projects. In South Korea, the Company has secured a pipeline of 9.0 MW.

Other Geographies: Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected COD

Business Model

Spain PPA

Spain

12.0

Utility

Development

2019

Project Development

South Korea

South Korea

9.0

Utility

Development

2019

Project Development

Total

21.0

Outlook

For the fourth quarter of 2018, the Company’s project business is expected to generate revenue in the range of $20 to $30 million and overall gross margin in the range of 20% to 25%.

Adoption of New Accounting Policy

Effective from January 1, 2018, ReneSola adopted the new revenue recognition policy, ASC 606 — Revenue from Contracts with Customers, using the modified retrospective method in accordance with US GAAP (“ASC 606”). As a result of adopting ASC 606, the Company recognized the cumulative effect of initially applying the revenue standard as an increase of approximately USD 0.9 million to the opening balances of retained earnings in the first quarter of 2018. There was no adjustment in the third quarter of 2018.

Conference Call Information

ReneSola’s management will host an earnings conference call on November 19, 2018 at 8:00 a.m. U.S. Eastern Time (9:00 p.m. China Standard Time).

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

Phone Number

Toll-Free Number

United States

+1 (845) 675-0437

+1 (866) 519-4004

Hong Kong

+852 30186771

+852 (800) 906601

China

+86 (800) 819-0121

+86 (400) 620-8038

Other International

+65 6713-5090

The call passcode is 9194756.

The Company requests listeners to dial in ten minutes before the scheduled start time, in order to avoid delays in registering.

A replay of the conference call may be accessed by phone at the following numbers until November 27, 2018.  To access the replay, please again reference the conference passcode 9194756.

Phone Number

Toll-Free Number

United States

+1 (646) 254-3697

+1 (855) 452-5696

Hong Kong

+852 3051-2780

+852 (800) 963117

Mainland China

+86 (800) 870-0206

+86 (400) 602-2065

Other International

+61 (2) 8199-0299

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.renesolapower.com.

About ReneSola

Founded in 2005, and listed on the New York Stock Exchange in 2008, ReneSola (NYSE: SOL) is an international leading brand of solar project developer and operator. Leveraging its global presence and solid experience in the industry, ReneSola is well positioned to develop green energy projects with attractive return around the world. For more information, please visit www.renesolapower.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. Furthermore, the forward-looking statements are mainly related to the Company’s continuing operations and you may not be able to compare such information with the Company’s past performance or results.  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.

 RENESOLA LTD 

 Unaudited Consolidated Balance Sheets 

 (US dollars in thousands) 

 Sep 30, 

 Jun 30, 

 Sep 30, 

2018

2018

2017

 ASSETS 

 Current assets: 

 Cash and cash equivalents  

8,067

24,805

5,156

 Restricted cash  

2,582

1,571

 Accounts receivable, net of allowances for doubtful accounts 

39,155

43,893

9,992

 Inventories , net of inventory provisions 

169

 Advances to suppliers-current, net  

649

660

348

 Value added tax recoverable 

16,784

15,002

13,357

 Prepaid expenses and other current assets  

6,740

10,525

10,608

 Project assets current 

63,479

77,799

52,171

 Deferred project costs current 

17,788

 Contract costs 

375

1,006

46,827

 Total current assets  

138,000

175,261

156,247

 Property, plant and equipment, net 

192,541

195,885

138,056

 Deferred tax assets-non-current, net 

1,103

414

130

 Project assets non-current 

43,023

17,133

7,470

 Other non-current assets   

774

922

5,264

 Total assets  

375,441

389,615

307,167

 LIABILITIES AND SHAREHOLDERS’ EQUITY 

 Current liabilities: 

 Short-term borrowings  

7,123

7,527

 Accounts payable  

24,556

23,662

15,803

 Advances from customers-current 

19

213

23,175

 Amounts due to related parties  

22,401

31,725

34,213

 Other current liabilities  

37,932

40,589

33,113

 Income tax payable 

796

147

94

 Salary payable   

471

800

182

 Total current liabilities  

93,298

104,663

106,580

 Long-term borrowings  

73,294

72,742

30,363

 Deferred project revenue non-current  

26,903

 Failed sale-lease back and capital lease liabilities   

79,922

85,021

56,466

 Total liabilities  

246,514

262,426

220,312

 Shareholders’ equity 

 Common shares  

519,313

519,226

519,139

 Additional paid-in capital  

8,665

8,710

8,438

 Accumulated deficit   

(428,408)

(429,898)

(437,209)

 Accumulated other comprehensive income  

(4,790)

(2,851)

(3,513)

 Total equity attributed to ReneSola Ltd 

94,780

95,187

86,855

   Noncontrolling interest 

34,147

32,002

 Total  shareholders’ equity 

128,927

127,189

86,855

 Total liabilities and shareholders’ equity  

375,441

389,615

307,167

 RENESOLA LTD 

 Unaudited Consolidated Statements of Income 

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

 Three Months Ended 

 Sep 30, 2018 

 Jun 30, 2018 

 Sep 30, 2017 

 Net revenues  

18,765

27,809

36,294

  Total net revenues 

18,765

27,809

36,294

 Cost of revenues  

(10,152)

(19,598)

(29,926)

 Gross profit(loss)  

8,613

8,211

6,368

 Operating (expenses) income: 

 Sales and marketing  

(119)

(173)

(601)

 General and administrative  

(2,599)

(2,680)

(1,888)

 Other operating income 

(189)

544

(50)

 Total operating expenses  

(2,907)

(2,309)

(2,539)

 Income(loss) from operations   

5,706

5,902

3,829

 Non-operating (expenses) income: 

 Interest income  

145

43

26

 Interest expense 

(2,680)

(2,623)

(1,129)

 Foreign exchange gains (losses) 

406

(2,900)

1,236

 Other loss 

5

 Income (loss) before income tax, noncontrolling interests 

3,577

422

3,967

 Income tax expense 

(3)

(1)

(2)

 Net income (loss) from continuing operations 

3,574

421

3,965

 Discontinued Operations: 

 Loss from discontinued operations 

83,484

 Net Income(loss)  

3,574

421

87,449

 Less: Net income (loss) attributed to noncontrolling interests 

2,084

1,112

 Net income (loss) attributed to holders of ordinary shares 

1,490

(691)

87,449

 Income per share from continuing operations  

   Basic 

0.01

0.00

0.02

   Diluted 

0.01

0.00

0.02

 Income (loss) per share from discontinued operations  

   Basic 

0.41

   Diluted 

0.41

 Weighted average number of shares used in computing loss per share 

   Basic 

380,818,902

380,679,598

204,451,945

   Diluted 

380,818,902

380,679,598

204,451,945

Source: ReneSola Ltd.

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Anand Gupta Editor - EQ Int'l Media Network