June 20, 2018 - 6:31 AM EDT
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ReneSola Announces First Quarter 2018 Results

SHANGHAI, June 20, 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 first quarter ended March 31, 2018.

ReneSola Logo (PRNewsfoto/ReneSola Ltd.)

Mr. Xianshou Li, ReneSola's Chief Executive Officer, commented, "We started 2018 with solid performance across our business as a result of continued strong execution of our strategy.  First quarter revenue exceeded our expectations and operating margin expanded significantly from the fourth quarter of 2017, resulting in a sequential increase in net income of over 200%."

Li continued, "Our overall global project pipeline remains solid at around 1.1 GW.  In the first quarter, we successfully installed 6.3 MW of rooftop projects in China and 6.8 MW of ground-mount projects in North Carolina.  As we look to the remainder of 2018, we remain optimistic about the business opportunities across different geographies.  In addition, the fundamentals for our project business have significantly improved over the last few quarters, and we will maintain our commitment to growing profitably, managing our operations and strengthening our financial position."

First Quarter 2018 Highlights


Q1 2018

($ in million)

Q4 2017

($ in million)

Q/Q
Change

Revenue

$44.8

$64.8

-30.9%

Gross Profit

$8.4

$6.8

+22.6%

Operating Income

$5.9

$4.9

+19.4%

EBITDA

$9.0

$4.7

+94.3%

Income before Income Tax and Noncontrolling interests

$5.4

$2.0

+173.8%

Net Income

$5.4

$1.7

+220.0%

 

  • Revenue was $44.8 million, compared to the raised guidance range of $40 million to $45 million;
  • Gross margin was 18.7%, compared to 10.5% in Q4 2017;
  • Income before income tax and noncontrolling interests was $5.4 million, compared to an income of $2.0 million in Q4 2017 and a loss of $3.2 million in Q1 2017;
  • Recognized revenue of $31.8 million from Project Development business, mainly from sales of utility solar projects in the United Kingdom;
  • Recognized revenue of $8.7 million from EPC services for 15.8 MW of DG projects in China;
  • Recognized revenue from the sale of electricity of $4.2 million;
  • Installed 6.3 MW of rooftop projects in China and 6.8 MW of ground-mount projects in North Carolina, United States; and
  • Solar power project pipeline of approximately 1.1 GW, of which 748 MW are late-stage.

First Quarter 2018 Financial Results

Revenue was $44.8 million, compared to $64.8 million in Q4 2017 and $0.2 million in Q1 2017.

  • Revenue from the Project Development business was $31.8 million as we recognized revenue from sales of utility projects in the United Kingdom that were recorded as deferred project revenue in the amount of $20.8 million as of December 31, 2017 due to the contingency consideration of the substantive return right of the customer under ASC 360 Real Estate Sales and recognized as revenue in the amount of $21.9 million in Q1 2018 with the final price adjustment upon the issuance of the final acceptance certificate (FAC) and all revenue recognition criteria is met upon adoption of ASC 606.
  • Revenue from the EPC business was $8.7 million as we recognized revenue from the provision of EPC services of 15.8 MW in China.
  • Revenue from the sale of electricity was $4.2 million. The Company generated 28.4 million kwh of electricity from its operating projects in China during the quarter.

Gross profit was $8.4 million, compared to a gross profit of $6.8 million in Q4 2017 and a loss of $0.2 million in Q1 2017. Gross margin was 18.7%, compared to 10.5% in Q4 2017, mainly due to the improved margin from overseas project development business and EPC business in China.

Operating expenses were $2.5 million, up from $1.9 million in Q4 2017 and from $1.3 million in Q1 2017. Sales and marketing expenses were $0.1 million, down from $0.6 million in Q4 2017, mainly due to reduced commission expenses associated with sale of green certificates.  General and administrative expenses were $2.4 million, up from $1.7 million in Q4 2017, mainly due to the increased salary expenses associated with additional new hires.

Operating income was $5.9 million, compared to an operating income of $4.9 million in Q4 2017 and an operating loss of $1.5 million in Q1 2017. 

Total non-operating expenses of $0.4 million included interest expenses of $1.5 million and foreign exchange gain of $1.1 million, mainly driven by theh appreciation of EUR against USD and KRW.

Income before income tax and noncontrolling interests was $5.4 million, compared to an income of $2.0 million in Q4 2017 and a loss of $3.2 million in Q1 2017. 

Net income was $5.4 million, compared to an income of $1.7 million in Q4 2017 and a loss of $3.2 million in Q1 2017.

Financial Position

The Company had cash and cash equivalents of $10.9 million as of March 31, 2018, compared to $13.4 million as of December 31, 2017. Long-term borrowings were $32.7 million as of March 31, 2018, compared to $32.5 million as of December 31, 2017. Long-term failed sale-lease back and capital lease liabilities, associated with the financial leasing payables for rooftop projects in China, were $78.2 million as of March 31, 2018, compared to $67.5 million as of December 31, 2017, the increase was mainly due to the corresponding growth of the Company's DG operating assets.

Recent Business Updates

  • On June 20, 2018,  the Company announced the closing of the sale of its utility-scale project located in North Carolina to New York-based Greenbacker Renewable Energy Company, LLC ("Greenbacker"), a publicly registered, non-traded Limited Liability Company focused on investments in renewable energy power plants and energy efficiency projects as well as other sustainable investments.  The North Carolina project has a capacity of 6.75 MW and represents ReneSola's second project sale to Greenbacker.  The first project sale to Greenbacker was completed in April 2017.
  • In June, Sequoia Economic Infrastructure Income Fund ("Sequoia") had agreed to extend senior debt facility to 36 million euro for ReneSola's 55MW of projects in Poland, each with a capacity of 1MW. In December 2017, Sequoia, which invests in a diversified portfolio of senior and subordinated economic infrastructure debt investments, provided a senior loan of 15 million euro for all of ReneSola's 55MW projects in the region.
  • The Company announced the appointment of Xiaoliang Liang as Chief Financial Officer, effective June 1, 2018.  Mr. Liang brings to ReneSola more than 18 years of experience developing, financing and managing projects with a focus on renewable energy, including solar, wind, hydro and other infrastructure sectors.
  • In May 2018, the Company closed an equity investment agreement with a strategic investor. The investor will invest RMB 200 million in cash to acquire 40.13% of Zhejiang ReneSola Investment Limited, the Company's subsidiary that holds the Company's distributed generation projects in China.

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 193 MW of rooftop projects in operation, which are concentrated in a handful of eastern provinces of China with attractive development environments. As of March 31, 2018, the Company had over 27 MW of rooftop projects under construction.

Operating Assets

Capacity (MW)

China DG

193.6

- Zhejiang& Shanghai

69.1

- Jiangsu

10.6

- Henan

57.9

- Anhui

31.5

- Hebei

17.1

- Shandong

7.4

Romania

15.4

United Kingdom

4.3

Total

213.3

As of March 31, 2018, the Company currently has 10.4 MW of completed projects, which are currently in sale process.

Completed Projects for Sale

Capacity (MW)

Turkey

10.4

Total

10.4

Project Pipeline

As of March 31, 2018, the Company had a pipeline of over 1.1 GW of projects in various stages, of which 748 MW are projects that are late-stage. 156 MW of these 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 whose controlling power can be purchased by us once the late stage is reached, and (ii) projects for which 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

189.4

24.1

Canada

17.3

7.0

Turkey

110.0[1]

--

Poland

55.0

55.0

Hungary

42.6

42.6

France

73.7

--

Spain

162.0

--

India

22.0

--

China DG

75.9

27.6

Total

747.9

156.3

 

[1] ReneSola has an arrangement with a local partner, under which our partner holds and maintains full titles to all projects but we have the right to receive 50% proceeds generated by the projects.

China

China: Late-stage Pipeline

Capacity

(MW)

Business Model

-Zhejiang & Shanghai

34.2

IPP

-Jiangsu

18.3

IPP

-Fujian & Guandong

8.5

IPP

-Anhui

1.9

IPP

-Henan

5.1

IPP

-Shandong

7.9

IPP

China DG

75.9


United States

In the U.S, the Company has a late-stage pipeline of 189.4 MW, 24.1 MW of which are under construction and are expected to be connected to the grid in the second 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

37.5

Community Solar

Development

2018

Project Development

MN-VOS

MN

7.8

Community Solar

Development

2019

Project Development

New York

NY

7.7

Community Solar

Development

2018/2019

Project Development

RP-CA

CA

13.6

Utility

Development

2019

Project Development

Oregon

OR

23.0

TBD

Development

2019

Project Development

Alpine

TX

65.0

TBD

Development

2019

Project Development

Total


189.4





Canada

In Canada, the Company has a late-stage pipeline of 17.3 MW projects, 7.0 MW of which are under construction and are expected to be connected to the grid in the third quarter of 2018. These 7MW projects are eligible for Canada's FiT3 Scheme. 

Canada: Late-
stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected
COD

Business Model

FiT3

Ontario

7.0

DG

Construction

2018

Project Development

FiT4

Ontario

10.3

DG

Development

2019

Project Development

Total


17.3





Poland

In Poland, the Company has a late-stage pipeline of 55 MW projects, which are under construction and are expected to be connected to the grid in the second half of 2018.

Poland: Late-stage
Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected COD

Business Model

Auction 2016 Dec

Poland

13.0

DG

Construction

2018

Project Development

Auction 2017 Jun

Poland

42.0

DG

Construction

2018

Project Development

Total


55.0





Hungary

In Hungary, the Company grew its late-stage pipeline to 71 "Micro PPs" projects, total capacity of 42.6 MW, which are under construction and are expected to be connected to the grid in the second half of 2018.

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

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 in the first quarter of 2018.

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

4.7

DG

Development

2019

Project Development

Total


73.7





Other Geographies

In Turkey, the Company has an arrangement with a local partner, under which our partner holds and maintains full titles to 110 MW projects but we have the right to receive 50% proceeds generated by those 110 MW projects.

In India, the Company has a pipeline of 22.0 MW projects, which are self-consumption distributed generations with top-rating commercial and industrial off-takers.

Other Geographies:
Late-stage Pipeline

Location

Capacity

(MW)

Project Type

Status

Expected
COD

Business Model

Turkey JV

Turkey

110.0

Utility

Development

2019

Project Development

India C&I

India

22.0

DG

Development

2018/2019

Project Development

Total


132.0





Outlook

For the second 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%. During the second quarter of 2018, the Company expects to connect 15 MW to 20 MW of DG projects in China, and to monetize 6.8 MW projects in international markets.

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 connect 100 MW to 150 MW of DG projects in China, and to monetize 80 MW to 100 MW projects in international markets.

Adoption of New Accounting Policy

Effective from January 1, 2018, SOL 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. The adjustments primarily arose from the timing of revenue recognition for 1) subscription service fee in the sale of project asset rights and 2) supplies of modules and invertors under cooperation arrangements with the counterparty. Under ASC 360, Real Estate Sales and ASC 605, Revenue Recognition, subscription service fee in the sale of project asset rights and revenue related to modules and invertors supplied under cooperation arrangements are considered contingent and, therefore, the portion of the revenue is not recognized until the contingency has been removed (i.e. upon having the right to receive the subscription fee and achievement of COD, or upon the ultimate sale of the project assets under the cooperation arrangement). Upon adoption of ASC 606, subscription fee is recognized over time as a seperate performance obligation, and the revenue of supplies of modules and invertors is recognized upon the delivery with the control transferred and the Company has right to payment. In addition, the Company had a sale of project asset with a right of return if certain conditions are not met. Under the ASC 360 Real Estate Sales, revenue was not recognised because of the contingency consideration. Upon adoption of ASC 606, revenue was not recognised because of the substantive return right and the Company was not able to assert return was not probable as of December 31, 2017. As such, deferred project revenue as of Dec 31, 2017 in the amount of $21 million would have been classified as a refund liability and the corresponding deferred project costs would have been classified as the Company's right to recover products from customers on settling the refund liability. Such refund liability was recognized as revenue totaling $22 million with an increase due to final price adjustment in the first quarter of 2018  

Conference Call Information

ReneSola's management will host an earnings conference call on June 20, 2018 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

Hong Kong

+852 30186771

+852 800906601

Mainland China

+86 8008190121

+86 4006208038


Other International

+65 67135090


Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is 1739389.

A replay of the conference call may be accessed by phone at the following numbers until June 28, 2018.  To access the replay, please again reference the conference passcode 1739389.


Phone Number

Toll-Free Number

United States

+1 6462543697

+1 8554525696

Hong Kong

+852 30512780

+852 800963117

Mainland China

+86 8008700206

+86 4006022065


Other International

+61 281990299


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
[email protected]

The Blueshirt Group Asia
Mr. Gary Dvorchak, CFA
+86 (138) 1079-1480
[email protected]

In the United States:

The Blueshirt Group
Mr. Ralph Fong
+1 (415) 489-2195
[email protected]

 

 RENESOLA LTD 

 Unaudited Consolidated Balance Sheets 

 (US dollars in thousands) 



 Mar 31, 


 Dec 31, 



2018


2017

 ASSETS 





 Current assets: 





 Cash and cash equivalents  


10,861


13,429

 Restricted cash  


2,078


-

 Accounts receivable, net of allowances for doubtful accounts 


34,539


23,312

 Advances to suppliers-current, net  


339


380

 Value added tax recoverable 


13,675


15,229

 Prepaid expenses and other current assets  


10,068


10,543

 Project assets current 


81,460


76,556

 Deferred project costs current 


-


17,957

 Contract costs 


2,380


12,669

 Total current assets  


155,400


170,075






 Property, plant and equipment, net 


192,429


154,659

 Deferred tax assets-non-current, net 


294


59

 Project assets non-current 


11,233


7,481

 Other non-current assets   


935


3,425

 Total assets  


360,291


335,699






 LIABILITIES AND SHAREHOLDERS' EQUITY 










 Current liabilities: 





 Short-term borrowings  


23,674


6,606

 Accounts payable  


29,169


25,788

 Advances from customers-current 


754


237

 Amounts due to related parties  


60,217


60,370

 Other current liabilities  


37,616


30,515

 Income tax payable 


209


330

 Salary payable   


849


560

 Deferred project revenue current  


-


20,792

 Total current liabilities  


152,488


145,198






 Long-term borrowings  


32,722


32,514

 Failed sale-lease back and capital lease liabilities   


78,246


67,505

 Total liabilities  


263,456


245,217






 Shareholders' equity 





   Common shares  


519,226


519,226

   Additional paid-in capital  


9,099


9,012

 Accumulated deficit   


(429,207)


(435,518)

   Accumulated other comprehensive income  


(2,313)


(2,238)

 Total equity attributed to ReneSola Ltd 


96,805


90,482

   Noncontrolling interest 


30


-

 Total  shareholders' equity 


96,835


90,482






 Total liabilities and shareholders' equity  


360,291


335,699


 

 RENESOLA LTD 

 Unaudited Consolidated Statements of Income 

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










 Three Months Ended 



 Mar 31, 2018 


 Dec 31, 2017 


 Mar 31, 2017 








 Revenue 


44,758


64,809


238

 Cost of revenue  


(36,379)


(57,975)


(449)

 Gross profit(loss)  


8,379


6,834


(211)








 Operating (expenses) income: 







 Sales and marketing  


(128)


(617)


(90)

 General and administrative  


(2,421)


(1,664)


(1,177)

 Other operating income 


30


355


7

 Total operating expenses  


(2,519)


(1,926)


(1,260)








 Income(loss) from operations   


5,860


4,908


(1,471)

 Non-operating (expenses) income: 







 Interest income  


6


(7)


20

 Interest expense 


(1,519)


(1,113)


(869)

 Foreign exchange gains (losses) 


1,102


(1,740)


(885)

 Other loss 




(58)


-

 Income (loss) before income tax, noncontrolling interests 


5,449


1,990


(3,205)








 Income tax expense 


(9)


(290)


(21)

 Net income (loss) from continuing operations 


5,440


1,700


(3,226)








 Discontinued Operations: 







 Loss from discontinued operations 


-


-


(20,014)








 Net Income(loss)  


5,440


1,700


(23,240)








 Less: Net income (loss) attributed to noncontrolling interests 


(1)


-


-

 Net income (loss) attributed to holders of ordinary shares 


5,441


1,700


(23,240)















 Income (loss) 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 


-


-


(0.10)

   Diluted 


-


-


(0.10)






















 Weighted average number of shares used in computing income (loss)  per share 







   Basic 


380,678,902


380,555,641


200,538,902

   Diluted 


380,818,902


380,579,653


200,538,902

 

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SOURCE ReneSola Ltd.


Source: PR Newswire (June 20, 2018 - 6:31 AM EDT)

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