ReneSola Announces Third Quarter 2018 Results
SHANGHAI, Nov. 19, 2018 /PRNewswire/ -- 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.
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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
Q2 2018
Q/Q Change
($ millions)
($ millions)
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 Minnesota,
United 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 Minnesota, United 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 Minnesota, United 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 million and 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 million as 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
Business Model
(MW)
---
-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
Project Type
Status
Expected COD
Business Model
(MW)
---
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 Project Type
Status
Expected COD
Business Model
(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. This pipeline is included in the package of projects intended to be sold to Chroma Investment.
Poland:
Late-
stage
Pipeline
Location
Capacity Project Type
Status
Expected COD
Business Model
(MW)
---
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 Project Type
Status
Expected COD
Business Model
(MW)
---
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 Project Type
Status
Expected COD
Business Model
(MW)
---
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 Project Type
Status
Expected COD
Business Model
(MW)
---
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 Project Type
Status
Expected COD
Business Model
(MW)
---
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.
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)
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
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SOURCE ReneSola Ltd.
