ReneSola Announces Second Quarter 2018 Results
SHANGHAI, Sept. 6, 2018 /PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company") (www.renesolapower.com) (NYSE: SOL), a leading solar project developer and operator, today announced its unaudited financial results for the second quarter ended June 30, 2018.
Mr. Xianshou Li, ReneSola's Chief Executive Officer, commented, "We are quite satisfied with our second quarter performance. Revenue was at the high end of our expectations, and we meaningfully improved our operating margin. Second quarter gross profit and operating income were identical to the first quarter. These results demonstrate our steadily improving earnings power, as we continue to scale up the new business model we initiated last year."
Li continued, "In August, we announced a very important development, the potential sale of our operating DG assets in China to Brookfield. Should we reach a deal during the 60 day exclusivity period, this sale will provide substantial capital for us to recycle back into the growth of our business. We remain optimistic about our opportunities around the world, and look forward to funding the continued growth of our 1.5 GW pipeline."
Second Quarter 2018 Highlights
Q2 2018 Q1 2018 Q/Q
Change
($ millions) ($ millions)
----------- -----------
Revenue $27.8 $44.8 -38%
Gross Profit $8.2 $8.4 -2%
Operating Income $5.9 $5.9 0%
EBITDA $5.2 $9.0 -43%
Income before Income Tax and Noncontrolling interests $0.4 $5.4 -92%
Net Income $0.4 $5.4 -92%
---------- ---- ---- ---
-- Revenue was $27.8 million, toward the high end of the guidance range of
$20 to $30 million;
-- Gross margin was 30%, compared to 19% in Q1 2018;
-- Income before income tax and noncontrolling interests was $0.4 million,
compared to $5.4 million in Q1 2018 and $0.8 million in Q2 2017;
-- Key constituents of revenue:- $10.1 million from the Project Development
business, mainly from sales of utility solar projects in North Carolina,
United States;- $7.6 million from EPC services for 8.4 MW of distribued
generation projects in China- $9.9 million from the sale of electricity
-- Installed 13.1 MW of rooftop projects in China and 14.0 MW of projects
in Poland;
-- Solar power project pipeline of approximately 1.51 GW, of which 670.2 MW
is late-stage.
Second Quarter 2018 Financial Results
Revenue was $27.8 million, compared to $44.8 million in Q1 2018 and $1.6 million in Q2 2017.
Revenue from the Project Development business was $10.1 million, due mainly to sales of 6.7 MW of utility-scale projects in North Carolina, United States.
Revenue from the EPC business was $7.6 million due to EPC services for 8.4 MW of distribued generation projects in China.
Revenue from the sale of electricity was $9.9 million. The Company generated 63.3 Million Kwh of electricity from its operating DG projects in China.
Gross profit was $8.2 million, compared to a gross profit of $8.4 million in Q1 2018 and $1.1 million in Q2 2017. Gross margin was 30%, compared to 19% in Q1 2018, mainly due to a greater mix of electricity sales due to the seasonality of solar irradiation.
Operating expenses were $2.3 million, slightly down from $2.5 million in Q1 2018 and up from $1.9 million in Q2 2017. Sales and marketing expenses were $0.2 million, slightly up from $0.1 million in Q1 2018. General and administrative expenses were $2.7 million, slightly up from $2.4 million in Q1 2018.
Operating income was $5.9 million, same as to operating income in Q1 2018 and compared to an operating loss of $0.7 million in Q2 2017.
Total non-operating expenses of $5.5 million included interest expenses of $2.6 million and foreign exchange loss of $2.9 million, mainly driven by the depreciation of EUR,GBP and PLN against USD.
Income before income tax and noncontrolling interests was $0.4 million, compared to an income of $5.4 million in Q1 2018 and a loss of $0.8 million in Q2 2017.
Net income was $0.4 million, compared to an income of $5.4 million in Q1 2018 and $0.8 million in Q2 2017.
Financial Position
The Company had cash and equivalents of $24.8 million as of June 30, 2018, compared to $10.9 million as of March 31, 2018. Long-term borrowings were $72.7 million as of June 30, 2018, compared to $32.7 million as of March 31, 2018, due mainly to loans for renewed construction in Poland. The loan term and size for Polish projects was extended during the quarter. Long-term failed sale-lease back and capital lease liabilities, associated with the financial leasing payables for rooftop projects in China, were $85.0 million as of June 30, 2018, compared to $78.2 million as of March 31, 2018. The increase was mainly due to the corresponding growth of the Company's DG operating assets.
Recent Business Updates
-- On September 5, the Company held its annual general meeting in Shanghai,
and approved the following: the consolidated financial statements of the
Company for the year ended December 31, 2017, together with the reports
of the auditors; the re-election of Mr. Martin Bloom as a director of
the Company, who is retiring by rotation and offering himself for
re-election in accordance with the Company's articles of association.
The Company's shareholders denied the proposed resolution of the
re-appointment of PricewaterhouseCoopers Zhong Tian LLP as auditors of
the Company until the conclusion of the next annual general meeting.
-- On August 30, 2018, the Company announced that in Budapest it closed on
long-term project financing with K&H Bank, one of Hungary's largest
banking and financial services firms, to develop an approximately 8 MW
KAT-licensed solar project in Hungary. The 8 MW projects are expected to
be grid-connected by October, 2018. ReneSola has two more KAT-licensed
project portfolios seeking project financing from K&H Bank.
-- On August 21, 2018, the Company appointed Grant Thornton as its
independent registered public accounting firm. Grant Thornton replaces
PricewaterhouseCoopers Zhong Tian LLP ("PwC"). The appointment of Grant
Thornton was approved by the Board of Directors and its Audit Committee
after an extensive evaluation process.
-- On July 31, 2018, ReneSola announced an exclusive negotiating agreement
to sell its operating distributed generation assets in China, which have
a total capacity of 207 MW. The potential buyer is an affiliate of
Brookfield Asset Management. The exclusivity period is 60 days from the
date of signing.
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 over 226.5 MW of operating rooftop projects, which are concentrated in a handful of eastern provinces of China with attractive development environments. As of June 30, 2018, the Company had over 134.0 MW of rooftop projects under construction.
Operating Assets Capacity (MW)
---------------- ------------
China DG 206.8
- Zhejiang& Shanghai 74.5
- Jiangsu 13.9
- Henan 62.4
- Anhui 31.5
- Hebei 17.1
- Shandong 7.4
---------- ---
Romania 15.4
United Kingdom 4.3
-------------- ---
Total 226.5
----- -----
As of June 30, 2018, the Company had 24.4 MW of completed projects, which are currently for sale.
Completed Projects for Sale Capacity (MW)
--------------------------- ------------
Poland 14.0
Turkey 10.4
------ ----
Total 24.4
----- ----
Project Pipeline
As of June 30, 2018, the Company had a project pipeline of over 1.51 GW, of which 670.2 MW are late-stage. 134.0 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 Late-stage Under Construction
Location (MW) (MW)
-------- --- ---
USA 285.5 24.0
Canada 7.6 7.6
Poland 41.0 41.0
Hungary 42.6 42.6
France 73.7 --
Spain 162.0 --
India 30.0 --
South Korea 9.0 --
China DG 18.8 18.8
-------- ---- ----
Total 670.2 134.0
----- ----- -----
China
China: Late-stage Pipeline Capacity Business Model
(MW)
--- ---
-Zhejiang & Shanghai 10.2 IPP
-Jiangsu 4.3 IPP
-Fujian 4.3 IPP
China DG 18.8
-------- ----
United States
In the U.S, the Company has a late-stage pipeline of 285.6 MW, 24.0 MW of which is under construction and are expected to be connected to the grid in the fourth quarter of 2018.
US: Late- Location Capacity Project Type Status Expected Business Model
stage Pipeline COD
(MW)
--- ---
RP-NC NC 24.0 Utility Construction 2018 Project Development
Utah UT 10.7 Self-consumption / DG Development 2018 Project Development
RP-MN MN 37.5 Community Solar Development 2018 Project Development
MN-VOS MN 11.2 Community Solar Development 2019 Project Development
New York NY 20.6 Community Solar Development 2019 Project Development
RP-CA CA 16.5 Utility Development 2019 Project Development
Florida FL 100.0 To be decided Development 2019 Project Development
Alpine TX 65.0 To be decided Development 2019 Project Development
------ --- ---- ------------- ----------- ---- -------------------
Total 285.5
----- -----
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- Location Capacity Project Type Status Expected Business Model
stage Pipeline COD
(MW)
--- ---
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 and expected to connect to the grid in the second half of 2018.
Poland: Late-
stage Location Capacity Project Type Status Expected Business Model
Pipeline COD
(MW)
--- ---
Auction 2017
Jun Poland 41.0 DG Development 2018 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 are under construction and are expected to be connected to the grid in the second half of 2018.
Hungary: Late-stage Location Capacity Project Type Status Expected Business Model
Pipeline COD
(MW)
--- ---
Portfolio of "Micro PPs", 0.5 MW each Hungary 42.6 DG Construction 2018 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 16 solar projects in France with a combined capacity of 4.65 MW.
France: Late-
stage Location Capacity Project Type Status Expected Business Model
Pipeline COD
(MW)
--- ---
SOLARPARK France 69.0 Utility Development 2019 Project Development
SPV2 France 4.7 DG Development 2019 Project Development
Total 73.7
----- ----
Other Geographies
In India, the Company has a pipeline of 30.0 MW, which are self-consumption distributed generation projects with top-rated commercial and industrial off-takers. In Spain, the Company has a late-stage pipeline of 162.0 MW of private PPA projects. In South Korea, the Company has secured a pipeline of 9.0 MW.
Other Geographies: Location Capacity Project Type Status Expected Business Model
Late-stage Pipeline COD
(MW)
--- ---
Spain PPA Spain 162.0 Utility Development 2019 Project Development
India C&I India 30.0 DG Development 2018/2019 Project Development
South Korea South Korea 9.0 Utility Development 2019 Project Development
Total 201.0
----- -----
Outlook
For the third quarter of 2018, the Company's project business is expected to generate revenue in the range of $15 to $20 million and overall gross margin in the range of 35% to 40%. During the third quarter of 2018, the Company expects to monetize 13 MW of projects.
For 2018, the Company expects to generate revenue in the range of $130 to $140 million with overall gross margin in the range of 20 to 25%. The Company intends to monetize 250 MW to 300 MW projects.
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 0.87 million to the opening balances of retained earnings in the first quarter of 2018. There is no adjustment in the second quarter of 2018
Conference Call Information
ReneSola's management will host an earnings conference call on September 6, 2018 at 8:00 a.m. U.S. Eastern Time (8:00 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
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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 8561109.
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 September 15, 2018. To access the replay, please again reference the conference passcode 1739389.
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.
For investor and media inquiries, please contact:
In China:
ReneSola Ltd
Mr. Johnny Pan
+86 (21) 6280-9180 x131
ir@renesolapower.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)
Jun 31, Mar 31, Jun 31,
2018 2018 2017
ASSETS
Current assets:
Cash and cash equivalents 24,805 10,861 3,038
Restricted cash 1,571 2,078 5
Accounts receivable, net of allowances for doubtful accounts 43,893 34,539 136
Inventories , net of inventory provisions - - 15
Advances to suppliers-current, net 660 339 3,122
Value added tax recoverable 15,002 13,675 6,611
Prepaid expenses and other current assets 10,525 10,068 9,297
Project assets current 77,799 81,460 116,869
Contract costs 1,006 2,380 -
Assets of discontinued operations current - - 380,063
Total current assets 175,261 155,400 519,156
Property, plant and equipment, net 195,885 192,429 94,794
Deferred tax assets-non-current, net 414 294 64
Project assets non-current 17,133 11,233 4,537
Deferred project costs non-current - - 20,913
Other non-current assets 922 935 3,355
Assets of discontinued operations non-current - - 512,107
Total assets 389,615 360,291 1,154,926
======= ======= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings 7,527 23,674 -
Accounts payable 23,662 29,169 23,422
Advances from customers-current 213 754 20,633
Amounts due to related parties 31,725 60,217 3,257
Other current liabilities 40,589 37,616 4,089
Income tax payable 147 209 94
Salary payable 800 849 -
Liabilities of discontinued operations current - - 973,943
Total current liabilities 104,663 152,488 1,025,438
Long-term borrowings 72,742 32,722 30,328
Deferred project revenue non-current - - 33,305
Failed sale-lease back and capital lease liabilities 85,021 78,246 156
Liabilities of discontinued operations non current - - 50,954
Total liabilities 262,426 263,456 1,140,181
------- ------- ---------
Shareholders' equity
Common shares 519,226 519,226 476,658
Additional paid-in capital 8,710 9,099 8,569
Accumulated deficit (429,898) (429,207) (524,665)
Accumulated other comprehensive income (2,851) (2,313) 53,385
Total equity attributed to ReneSola Ltd 95,187 96,805 13,947
Noncontrolling interest 32,002 30 798
Total shareholders' equity 127,189 96,835 14,745
Total liabilities and shareholders' equity 389,615 360,291 1,154,926
======= ======= =========
RENESOLA LTD
Unaudited Consolidated Statements of Income
(US dollars in thousands, except ADS and share data)
Three Months Ended Six Months Ended
------------------ ----------------
Jun 30, 2018 Mar 31, 2018 Jun 30, 2017 Jun 30, 2018 Jun 30, 2017
Net revenues 27,809 44,758 1,633 72,567 1,871
Total net revenues 27,809 44,758 1,633 72,567 1,871
Cost of revenues (19,598) (36,379) (491) (55,977) (940)
Gross profit(loss) 8,211 8,379 1,142 16,590 931
----- ----- ----- ------ ---
Operating (expenses) income:
Sales and marketing (173) (128) (402) (301) (492)
General and administrative (2,680) (2,421) (1,450) (5,101) (2,627)
Other operating income 544 30 1 574 8
Total operating expenses (2,309) (2,519) (1,851) (4,828) (3,111)
------ ------ ------ ------ ------
Income(loss) from operations 5,902 5,860 (709) 11,762 (2,180)
Non-operating (expenses) income:
Interest income 43 6 12 49 32
Interest expense (2,623) (1,519) (825) (4,142) (1,694)
Foreign exchange gains (losses) (2,900) 1,102 2,284 (1,798) 1,399
Income (loss) before income tax, noncontrolling interests 422 5,449 762 5,871 (2,443)
Income tax expense (1) (9) (9) (10) (30)
Net income (loss) from continuing operations 421 5,440 753 5,861 (2,473)
Discontinued Operations:
Loss from discontinued operations - - (32,212) - (52,226)
Net Income(loss) 421 5,440 (31,459) 5,861 (54,699)
Less: Net income (loss) attributed to noncontrolling interests 1,112 (1) (9) 1,111 (9)
Net income (loss) attributed to holders of ordinary shares (691) 5,441 (31,450) 4,750 (54,690)
==== ===== ======= ===== =======
Income per share from continuing operations
Basic 0.00 0.01 0.00 0.02 (0.01)
Diluted 0.00 0.01 0.00 0.02 (0.01)
Income (loss) per share from discontinued operations
Basic - - (0.16) - (0.26)
Diluted - - (0.16) - (0.26)
Weighted average number of shares used in computing loss per share
Basic 380,679,598 380,678,902 200,538,902 380,679,598 200,538,902
Diluted 380,679,598 380,818,902 200,538,902 380,679,598 200,538,902
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