ReneSola Announces First Quarter 2017 Results
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.
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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
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Hong Kong +852 30186771 +852 800906601
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Mainland China +86 8008190121
+86 4006208038
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Other International +65 67135090
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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
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Hong Kong +852 30512780 +852 800963117
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Mainland China +86 8008700206
+86 4006022065
--- --------------
Other International +61 281990299
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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 (4,625)
advances for purchases of property,
plant and equipment
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 213
bonds
Fair value change of warrant liability - 420
Income (loss) before income tax, (26,861) (22,056) 6,140
noncontrolling interests
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 (23,240) (25,463) 5,733
holders of ordinary shares
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 (1,108)
purchases of property, plant and equipment
(28)
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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SOURCE ReneSola Ltd.
