Company Achieves Record Quarterly Product Shipment Volume;
Net Revenues Exceed Guidance
JIASHAN, China, Nov. 16 /PRNewswire-Asia-FirstCall/ -- ReneSola Ltd ("ReneSola" or the "Company") (NYSE: SOL) (AIM: SOLA), a vertically integrated Chinese manufacturer of solar power products, today announced its unaudited financial results for the third quarter ended September 30, 2009.
(Logo: http://www.prnasia.com/sa/200806261902.jpg )
Third Quarter 2009 Financial and Operating Highlights
-- Q3 2009 net revenues exceeded guidance and were US$140.9 million, an
increase of 70.6% from US$82.6 million in Q2 2009.
-- Total solar product shipments in Q3 2009 were a record 146.9 megawatts
("MW"), an increase of 71.0% from 85.9 MW in Q2 2009.
-- The Company successfully completed the integration of Wuxi Jiacheng
Solar Energy Technology Co. ("JC Solar") following its acquisition on
May 31, 2009. Approximately 11 MW of modules were shipped
in Q3 2009 with a gross profit margin of over 20%.
Three months Three months Three months
ended ended ended
September 30, June 30, September 30,
2008 2009 2009
(Unaudited) (Unaudited) (Unaudited)
Product shipment (MW) 90.4 85.9 146.9
Net revenue (US$000) 215,754 82,629 140,945
Gross profit (US$000) 45,809 4,251 4,738
Gross margin (%) 21.2% 5.1% 3.4%
Operating profit (loss)
(US$000) 36,888 (3,962) (7,774)
Profit (loss) for the
period (US$000) 32,385 (3,589) (10,171)
"We witnessed a strong rebound in customer demand for our quality products in the third quarter of 2009 and reached a corporate landmark as ReneSola achieved the highest quarterly shipments of solar products in its history," said Mr. Xianshou Li, ReneSola's chief executive officer. "The benefits of our strategic acquisition of JC Solar and evolution into an OEM based, vertically integrated solar manufacturer expedited with the recently announced acquisition of Dynamic Green Energy are allowing us to build upon our strong wafer manufacturing platform and deliver high quality, low cost products throughout the solar production value chain."
Mr. Charles Bai, ReneSola’s chief financial officer, added, "We were pleased to see strong improvements in revenues and shipment volumes during the third quarter as we continue to witness strong customer demand and continue to gain market share globally. We are one quarter away from completely working through our high cost inventories. As such, we expect substantial margin improvements and a return to profitability in Q1 2010."
Results for the Third Quarter of 2009
Product Shipment
Total solar product shipment in Q3 2009 was 146.9 MW, an increase of 71.0% from 85.9 MW for Q2 2009.
Net Revenues
Net revenues for Q3 2009 were US$140.9 million, an increase of 70.6% from US$82.6 million sequentially, exceeding guidance. Net revenues for Q3 2008 were US$215.8 million.
Gross Profit
Gross profit for Q3 2009 was US$4.7 million, compared to US$4.3 million in Q2 2009 and US$45.8 million in Q3 2008. Gross margin for Q3 2009 was 3.4%, compared to 5.1% for Q2 2009 and 21.2% for Q3 2008. The sequential decrease in gross margin was a result of further wafer ASP decline and the residual higher cost of inventory worked through during the quarter.
Operating Profit (Loss)
Operating loss for Q3 2009 was US$7.8 million, compared to an operating loss of US$4.0 million for Q2 2009 and operating profit of US$36.9 million for Q3 2008. Operating margin for Q3 2009 was negative 5.5%, compared to negative 4.8% for Q2 2009 and positive 17.1% for Q3 2008.
Total operating expenses for Q3 2009 were US$12.5 million, an increase from US$8.2 million for Q2 2009 and US$8.9 million for Q3 2008, mainly due to a one-off government subsidy granted in Q2 2009 and increases in general and administrative expenses and R&D expenses that were partly attributable to the integration of JC Solar.
Earnings (Loss) Before Income Tax
Loss before income tax for Q3 2009 was US$11.5 million, compared to a loss of US$2.9 million for Q2 2009 and earnings before income tax of US$37.9 million for Q3 2008.
Taxation
A tax benefit of approximately US$1.4 million was recognized for Q3 2009, compared with tax expenses of US$0.7 million for Q2 2009 and US$5.5 million for Q3 2008, as a result of deferred tax assets realized in the quarter.
Net Income (Loss) Attributable to Holders of Ordinary Shares
Net loss attributable to holders of ordinary shares for Q3 2009 was US$10.2 million, compared to net loss attributable to holders of ordinary shares of US$3.6 million for Q2 2009 and net income attributable to holders of ordinary shares of US$32.4 million for Q3 2008.
Q3 2009 basic and diluted loss per share was US$0.07, and basic and diluted loss per American depositary share, or ADS, was US$0.14. Q2 2009 basic and diluted loss per share was US$0.03, and basic and diluted loss per ADS was US$0.05. One ADS is equivalent to two ordinary shares.
Recent Business Developments
Follow-on offering
ReneSola closed its follow-on public offering of 15,500,000 ADSs, each representing two shares of no par value in the Company, on October 5, 2009. The Company received aggregate net proceeds of approximately US$70.0 million, after deducting discounts and commissions but before offering expenses.
Acquisition of Dynamic Green Energy
As announced on September 23, 2009 ReneSola has signed a share purchase agreement with Dynamic Green Energy Limited ("DGE") and its shareholders to acquire 100% of the shares in DGE for 26,787,210 newly issued ReneSola ordinary shares and a US$10 million convertible promissory note.
ReneSola has been working closely with DGE to meet the conditions precedent for the closing of the acquisition, which is expected to be completed before the end of 2009.
Cost of production from Phase I of Sichuan Polysilicon Facility is now below US$55/kg while Phase II of Sichuan Polysilicon Facility is to Launch Production in Q4 2009
Trial production of Phase I of the facility commenced in July 2009 and output from this phase is expected to be approximately 200 MT to 250 MT in Q4 2009. The cost of production from Phase I has been reduced to below US$55/kg, and it is expected to further reduce to US$40/kg by the end of 2010.
The mechanical completion and commencement of production of Phase II are expected in Q4 2010.
Successful Integration of JC Solar
ReneSola has completed integration of JC Solar following the close of its acquisition on May 31, 2009. In Q3 2009, ReneSola shipped approximately 11 MW of modules from JC Solar.
JC Solar had annualized cell and module manufacturing capacities of 25 MW and 50 MW, respectively, by the end of September 2009. By the end of 2009, ReneSola expects to increase both cell and module capacities to 120 MW and 135 MW, respectively.
With the strategic acquisition of JC Solar and the commencement of polysilicon production, ReneSola has successfully transformed itself into an end-to-end vertically integrated solar product company spanning from polysilicon to module manufacturing.
2009 and 2010 Outlook
ReneSola updates its previously announced outlook for 2009 from total solar product shipments in the range of 450 MW to 500 MW to a range of 490 MW to 520 MW.
For 2010, the Company expects its full year 2010 total solar product shipments to be in the range of 900 MW to 950 MW (net of potential contributions from DGE). The Company expects to be profitable with average gross profit margin in the mid-teens for the whole of 2010.
Conference Call Information
ReneSola's management will host an earnings conference call on Monday, November 16, 2009 at 8 am U.S. Eastern Standard Time / 9 pm Beijing/Hong Kong time / 1 pm Greenwich Mean Time.
Dial-in details for the earnings conference call are as follows:
U.S. / International: +1-617-614-2711
United Kingdom: +44-207-365-8426
Hong Kong: +852-3002-1672
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "ReneSola Call."
A replay of the conference call may be accessed by phone at the following number until November 23, 2009:
International: +1-617-801-6888
Passcode: 18272544
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
ReneSola Ltd ("ReneSola") is a leading Chinese manufacturer of solar power products based in China. Capitalizing on proprietary technologies and technical know-how, ReneSola's vertically integrated manufacturing capabilities include virgin polysilicon, monocrystalline and multicrystalline solar wafers, solar cells and solar modules. ReneSola possesses a global network of suppliers and customers that include some of the leading global manufacturers of solar cells and modules. ReneSola's shares are currently traded on the New York Stock Exchange (NYSE: SOL) and the AIM of the London Stock Exchange (AIM: SOLA).
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 we describe what we "believe," "expect" or "anticipate" will occur, what "will" or "could" happen, and other similar statements), you must remember that our expectations may not be correct, even though we believe that they are reasonable. We do 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 our filings with the U.S. Securities and Exchange Commission, including our annual report on Form 20-F. We undertake 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 our situation may change in the future.
For investor and media inquiries, please contact:
In China:
Ms. Julia Xu
ReneSola Ltd
Tel: +86-573-8477-3372
Email: julia.xu@renesola.com
Mr. Derek Mitchell
Ogilvy Financial, Beijing
Tel: +86-10-8520-6284
Email: derek.mitchell@ogilvy.com
In the United States:
Ms. Jessica Barist Cohen
Ogilvy Financial, New York
Tel: +1-646-460-9989
Email: jessica.cohen@ogilvypr.com
In the United Kingdom:
Mr. Tim Feather / Mr. Richard Baty
Hanson Westhouse Limited, London
Tel: +44-207-601-6100
Email: tim.feather@hansonwesthouse.com
richard.baty@hansonwesthouse.com
CONSOLIDATED BALANCE SHEET
As at As at
June 30, 2009 September 30, 2009
US$000 US$000
ASSETS
Current assets:
Cash and cash equivalents 173,543 95,210
Restricted cash 58,068 28,852
Accounts receivable, net of allowances
for doubtful receivables 35,319 86,780
Inventories 142,703 162,196
Advances to suppliers 20,174 39,729
Amounts due from related parties 457 439
Value added tax recoverable 35,374 44,411
Prepaid expenses and other current assets 5,772 6,184
Deferred tax assets 12,877 22,799
Total current assets 484,287 486,600
Property, plant and equipment, net 510,085 618,732
Prepaid land rent, net 19,505 23,277
Other Intangible assets 3,934 2,474
Deferred tax assets 45,568 36,020
Deferred convertible bond issue costs 834 549
Advances to suppliers over one year 40,958 19,140
Advances for purchases of property, plant
and equipment 139,359 76,948
Other long-term assets 1,397 1,582
Goodwill 5,323 5,323
Total assets 1,251,250 1,270,645
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings 347,939 312,560
Accounts payable 42,055 78,414
Advances from customers 43,872 59,682
Amount due to related party 24 40
Other current liabilities 59,321 74,116
Total current liabilities 493,211 524,812
Convertible bond payable 98,992 99,330
Long-term borrowings 159,586 170,666
Advances from customers over one year 114,074 99,428
Other long-term liabilities 20,621 20,880
Total liabilities 886,484 915,116
ReneSola Ltd. Shareholders' equity
Common shares 345,645 345,645
Additional paid-in capital 19,630 20,410
Retained earnings (deficit) (22,313) (32,483)
Accumulated other comprehensive income 21,804 21,957
Total ReneSola Ltd. Shareholders' equity 364,766 355,529
Noncontrolling interests -- --
Total equity 364,766 355,529
Total liabilities and equity 1,251,250 1,270,645
CONSOLIDATED INCOME STATEMENT
Three Three Three
months months months
ended ended ended
September 30, June 30, September 30,
2008 2009 2009
US$000 US$000 US$000
Net revenues 215,754 82,629 140,945
Cost of revenues (169,945) (78,378) (136,207)
Gross profit (loss) 45,809 4,251 4,738
21.2% 5.1% 3.4%
Operating expenses:
Sales and marketing (79) (1,497) (1,752)
General and administrative (5,471) (4,503) (5,809)
Research and development (2,997) (3,401) (4,800)
Other general income (expenses) (374) 1,188 (151)
Total operating expenses (8,921) (8,213) (12,512)
Income (loss) from operations 36,888 (3,962) (7,774)
Interest income 314 176 269
Interest expenses (3,278) (3,972) (4,152)
Foreign exchange (loss) gain (1,192) (504) 116
Equity in earnings of investee 5,175 -- --
Gain on early extinguishment of
debt, net of inducement charges -- 5,353 --
Income (loss) before income tax 37,907 (2,909) (11,541)
Income tax benefit (expenses) (5,454) (680) 1,370
Net income (loss) 32,453 (3,589) (10,171)
Less: net (income) loss attributable
to noncontrolling interests (68) -- --
Net income (loss) attributable to
holders of ordinary shares 32,385 (3,589) (10,171)
Earnings (Loss) per share
Basic 0.24 (0.03) (0.07)
Diluted 0.23 (0.03) (0.07)
Weighted average number of shares
used in computing earnings per
share:
Basic shares 137,624,912 139,383,154 141,624,912
Diluted shares 148,480,310 139,383,154 141,624,912
