TIDMSOLA
ReneSola Ltd Announces Third Quarter 2010 Results
Company achieves record results with revenues of US$358.7 million, quarterly
solar wafer and module shipments of 324.9 MW and net income of US$60.1 million
JIASHAN, China, Nov. 5, 2010 /PRNewswire-Asia-FirstCall/ -- ReneSola Ltd
("ReneSola" or the "Company") (NYSE: SOL) (AIM: SOLA), a leading global
manufacturer of solar wafers and provider of solar module original equipment
manufacturer ("OEM") services, today announced its unaudited financial results
for the third quarter ended September 30, 2010.
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Third Quarter 2010 Financial and Operating Highlights
* Total solar wafer and module shipments in Q3 2010 were a record 324.9
megawatts ("MW"), an increase of 25.8 % from 258.3 MW in Q2 2010.
* Q3 2010 net revenues were a record US$358.7 million, an increase of 41.3%
from US$253.9 million in Q2 2010.
* Q3 2010 gross profit was US$116.7 million with a gross margin of 32.5%,
compared to gross profit of US$76.6 million with a gross margin of 30.2% in
Q2 2010.
* Q3 2010 operating income was US$86.4 million with an operating margin of
24.1%, compared to operating income of US$52.5 million with an operating
margin of 20.6% in Q2 2010.
* Q3 2010 net income was a record US$60.1 million, representing basic and
diluted earnings per share of US$0.35 and basic and diluted earnings per
American depositary share ("ADS") of US$0.70.
* The Company generated strong operating cash flow of US$118.7 million in Q3
2010, bringing cash and cash equivalents and restricted cash at the end of
Q3 2010 to US$286.6 million, compared with US$246.6 million at the end of
Q2 2010, while further reducing total debt from US$577.1 million at the end
of Q2 2010 to US$542.2 million at the end of Q3 2010.
"Continuous cost reduction efforts coupled with robust market demand has led us
to deliver another quarter of impressive financial and operating results," said
Mr. Xianshou Li, ReneSola's chief executive officer. "As we focus on the
production of high-quality wafers supported by module services, our growing
in-house polysilicon production capacity will allow us to more effectively
hedge our upstream risk and seize opportunities that will further define our
company as a leading provider of solar energy."
Julia Xu, ReneSola's chief financial officer, added, "Our ongoing emphasis on
improving manufacturing efficiencies has led to another quarter of improved
margins and a substantial increase in our top and bottom line results.
Additionally, our strong cash flow generation and prudent capital expenditures
have resulted in a net cash balance of US$286.6 million for the first nine
months of 2010, improving our capital structure and positioning us well for
further expansion in 2011."
Results for the Third Quarter 2010
Product Shipments
3Q10 2Q10 3Q09 Q-o-Q% Y-o-Y%
Total Solar Wafer and Module Shipments (MW) 324.9 258.3 146.9 25.8% 122.1%
Wafer Shipments (MW) 226.6 206.7 134.3 9.6% 68.7%
Module Shipments (MW) 98.3 50.6 10.8 94.3% 810.2%
Net Revenues
3Q10 2Q10 3Q09 Q-o-Q% Y-o-Y%
Net Revenues (US$mln) $358.7 $253.9 $140.9 41.3% 154.6%
Record revenues in Q3 2010 were driven by a combination of higher average
selling prices ("ASP") and strong growth in our module business.
Gross Profit
3Q10 2Q10 3Q09 Q-o-Q% Y-o-Y%
Gross Profit (US$mln) $116.7 $76.6 $4.7 52.4% 2,383.0%
Gross Margin 32.5% 30.2% 3.4% - -
Operating Income (Loss)
3Q10 2Q10 3Q09 Q-o-Q% Y-o-Y%
Operating Expenses (US$mln) $30.3 $24.2 $12.5 25.5% 142.4%
Operating Income (Loss) (US$mln) $86.4 $52.5 ($7.8) 64.7% -
Operating Margin 24.1% 20.6% (5.5%) - -
Increases in operating expenses were primarily due to AIM delisting fees of
US$2.0 million as a result of the cost of conversion of shares into ADSs and an
increase in research and development costs of US$1.8 million for the production
improvement of wafer processing.
Net Income (Loss) Attributable to Holders of Ordinary Shares
3Q10 2Q10 3Q09
Net Income (Loss) (US$mln) $60.1 $36.1 ($10.2)
Earnings (Loss) Per Share $0.35 $0.21 ($0.07)
Earnings (Loss) Per ADS $0.70 $0.42 ($0.14)
The Company achieved record net income of US$60.1 million, an increase of 66.7%
from US$36.1 million in Q2 2010. Basic and diluted earnings per share were
US$0.35, and basic and diluted earnings per ADS were US$0.70.
Business Highlights
Polysilicon Update
The Company will continue to build out its polysilicon production capabilities
in the coming quarters in order to mitigate raw material volatility and
diversify procurement risk. The Company produced approximately 269 metric
tonnes ("MT") of polysilicon in Q3 2010, an increase of 66.0% from
approximately 162 MT in Q2 2010. The Company expects to yield 500 MT to 600 MT
of polysilicon during Q4 2010 with production cost reduced to US$45 per
kilogram by the end of the quarter. The plant is on target to produce 3,000 MT
to 3,500 MT with production cost below US$35 per kilogram by the end of the
first half of 2011.
Wafer Business
ReneSola's wafer business continued to excel in Q3 2010 as wafer processing
cost was further reduced to US$0.25/watt ("W") with average polysilicon input
cost of US$50 per kilogram to US$55 per kilogram. The Company's prudent control
over raw material procurement has led to steady polysilicon input prices which
has provided protection against rising polysilicon spot prices. For Q4 2010,
the Company expects to lower its wafer processing cost to US$0.24/W and achieve
average polysilicon cost of US$55 per kilogram to US$60 per kilogram.
Year-to-date, the Company has signed 9 new long-term wafer contracts for a
period of 1 to 5 years under fixed volume and fixed pricing schedules, totaling
820 MW for 2011, which shall represent 68% of the Company's expected wafer
product shipments.
Module Business
ReneSola continues to advance its downstream module business. The Company
delivered record module shipments of 98.3 MW with an ASP of US$1.85/W in Q3
2010. The Company remains confident that its downstream platform will enhance
its competitive edge by providing additional value to its customers. The
Company expects to achieve similar module shipments and ASP in Q4 2010 and
expects module shipments to reach 400 MW in 2011.
Strong Operating Cash Flows and Improved Capital Structure
The Company generated strong operating cash flows of US$118.7 million in the
third quarter of 2010, bringing total operating cash flows to US$287.1 million
for the first nine months of 2010. Consistently strong operating cash flows and
a net cash and cash equivalents and restricted cash position of US$286.6
million at the end of Q3 2010, compared to US$246.6 million at the end of Q2
2010, allowed the Company to steadily reduce its net debt-to-equity ratio to
below 50% as of September 30, 2010. The Company expects to continue to generate
strong operating cash flows with similar trajectory during the fourth quarter
of 2010, placing the Company in a good position to continue increasing its cash
while holding its debt level steady for the remainder of 2010.
Capacity Expansion Plans and Related CAPEX
ReneSola spent US$86.7 million on capital expenditures during the first nine
months of 2010 and is expected to spend another US$51.1 million in 2010,
bringing total capital expenditure in 2010 to US$137.8 million. The Company
expects to spend US$150 million in 2011 to expand wafer production capacity
from the current 1.2 GW to 1.8 GW while increasing module production capacity
from the current 375 MW to 600 MW.
AIM Cancellation
At ReneSola's annual general meeting on August 20, 2010, the Company passed a
resolution to cancel its AIM quotation effective November 30, 2010 or such
later date as the Company's directors may determine. Application has therefore
been made to cancel the AIM quotation with effect from November 30, 2010.
Company Appoints New Vice President of Wafer Manufacturing
The Company recently appointed Robin Liu as vice president of wafer
manufacturing. Mr. Liu previously served as the Company's vice general manager
and director of its silicon wafer division. Mr. Liu has over 14 years of
experience in engineering and operations management having previously served as
a senior manufacturing manager at Kemet (Suzhou) Co., Ltd., industrial
operations manager at Schneider (Suzhou) Transformers Co., Ltd., a
manufacturing center manager and head of production and engineering at Royal
Philips Electronic Sound Solutions Beijing, and an engineer with The Waterborne
Transportation Institute of The Ministry of Communications. Mr. Liu received a
degree in mechanical engineering from Shanghai Tongji University in 1996.
Outlook
Reflecting the robust market demand for solar products, ReneSola increases its
Q4 2010 guidance. The Company expects total solar wafer and module shipments to
be in the range of 310 MW to 330 MW, revenues to be in the range of US$340
million to US$360 million and gross profit margin to be between 30% to 32% in
Q4 2010.
Full year 2010 solar wafer and module shipments are expected to be in the range
of 1.13 GW to 1.15 GW. For the full year 2011, the Company expects solar wafer
and module shipments to be in the range of 1.6 GW to 1.7 GW, representing an
increase of 42% to 48% year-over-year.
Conference Call Information
ReneSola's management will host an earnings conference call on Friday, November
5, 2010 at 8 am U.S. Eastern Time / 8 pm Beijing/Hong Kong time / 12 pm
Greenwich Mean Time.
Dial-in details for the earnings conference call are as follows:
U.S./ International: +1-857-350-1596
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 12, 2010:
International: +1-617-801-6888
Passcode: 73941661
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 is a leading global manufacturer of solar wafers and producer of solar
power products based in China. Capitalizing on proprietary technologies,
economies of scale, low-cost production capabilities and technological
innovations and know-how, ReneSola leverages its in-house virgin polysilicon
and solar cell and module production capabilities to provide its customers with
high-quality, cost-competitive solar wafer products and OEM services. The
Company possesses a global network of suppliers and customers that includes
some of the leading global manufacturers of solar cells and modules. ReneSola's
shares are 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 the Company describes what it "believes," "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:
Ms. Feng Qi
ReneSolaLtd
Tel: +86-573-8477-3903
E-mail: feng.qi@renesola.com
Mr. Derek Mitchell
Ogilvy Financial, Beijing
Tel: +86-8520-6284
E-mail: derek.mitchell@ogilvy.com
In the United States:
Ms. Jessica Barist Cohen
Ogilvy Financial, New York
Tel: +1-646-460-9989
E-mail: jessica.cohen@ogilvypr.com
In the United Kingdom:
Mr. Tim Feather / Mr. Richard Baty
WesthouseSecurities Limited, London
Tel: +44-20-7601-6100
E-mail: tim.feather@westhousesecurities.com
richard.baty@westhousesecurities.com
RENESOLA LTD
Unaudited Consolidated Balance Sheet
(US dollars in thousands)
September 30, June 30, December 31, September 30,
2010 2010 2009 2009
ASSETS
Current
assets:
Cash and cash
equivalents 211,586 171,208 106,808 95,210
Restricted
cash 75,051 75,384 25,266 28,852
Available for
sale
investment 3,512 4,975 6,207 -
Trade
receivable,
net of
allowances
for doubtful
receivables 120,366 102,629 107,987 86,780
Inventories,
net of
inventory
provisions 163,629 164,770 137,844 162,196
Advances to
suppliers,
current
portion 41,898 18,917 12,092 39,729
Amounts due
from related
parties 401 412 440 439
Value added
tax
recoverable 40,409 44,341 51,843 44,411
Prepaid
expenses and
other current
assets 15,620 10,784 7,412 6,184
Deferred tax
assets,
current
portion 22,155 25,124 24,325 22,799
Total current
assets 694,627 618,543 480,224 486,600
Property,
plant and
equipment,
net 786,025 743,079 702,816 618,732
Prepaid land
rent, net 25,707 25,351 23,137 23,277
Other
intangible
assets 553 425 1,349 2,474
Deferred tax
assets,
non-current
portion 18,948 27,723 40,227 36,020
Advances to
suppliers,
non-current
portion - 7,204 8,072 19,140
Advances for
purchases of
property,
plant and
equipment 15,871 13,402 20,840 76,948
Other
long-term
assets 2,881 2,670 2,840 2,131
Goodwill 5,323 5,323 5,323 5,323
Total assets 1,549,935 1,443,719 1,284,829 1,270,645
LIABILITIES
AND EQUITY
Current
liabilities:
Short-term
borrowings 353,558 388,028 358,634 312,560
Accounts
payable 209,409 190,779 93,406 78,414
Advances from
customers,
current
portion 82,356 51,276 53,852 59,682
Amounts due
to related
parties 24 24 24 40
Other current
liabilities 96,861 73,848 71,460 74,116
Derivative
liabilities 2,426 - - -
Convertible
bond payable,
current
portion - - 32,475 -
Total current
liabilities 744,634 703,955 609,851 524,812
Convertible
bond payable - - - 99,330
Long-term
borrowings 188,596 189,073 189,279 170,666
Advances from
customers,
non-current
portion 82,821 90,198 78,578 99,428
Other
long-term
liabilities 20,660 12,911 10,858 20,880
Total
liabilities 1,036,711 996,137 888,566 915,116
Equity
Common shares 415,001 414,585 413,753 345,645
Additional
paid-in
capital 22,995 21,896 21,065 20,410
Retained
earnings/
accumulated
deficits 47,342 (12,772) (60,609) (32,483)
Accumulated
other
comprehensive
income 27,886 23,873 22,054 21,957
Total equity 513,224 447,582 396,263 355,529
Total
liabilities
and equity 1,549,935 1,443,719 1,284,829 1,270,645
RENESOLA LTD
Unaudited Consolidated Statements of Income Data
(US dollars in thousands, except ADS and share data)
Three Months Ended
September June 30, September
30, 2010 2010 30, 2009
Net revenues 358,704 253,879 140,945
Cost of revenues (241,964) (177,255) (136,207)
Gross profit 116,740 76,624 4,738
Operating expenses:
Sales and marketing (2,330) (1,815) (1,752)
General and administrative (15,900) (13,371) (5,809)
Research and development (9,300) (7,459) (4,800)
Other general expenses (2,806) (1,529) (151)
Total operating expenses (30,336) (24,174) (12,512)
Income (loss) from operations 86,404 52,450 (7,774)
Non-operating expenses:
Interest income 438 378 269
Interest expenses (6,199) (5,299) (4,152)
Foreign exchange gain (loss) 582 (7) 116
Fair value change on derivative
liabilities (492) (147) -
Investment income (2,578) 293 -
Total non-operating expenses (8,249) (4,782) (3,767)
Income (loss) before income tax 78,155 47,668 (11,541)
Income tax benefit (expense) (18,041) (11,607) 1,370
Net income (loss) attributed to
holders of ordinary shares 60,114 36,061 (10,171)
Earnings (Loss) per share
Basic 0.35 0.21 (0.07)
Diluted 0.35 0.21 (0.07)
Earnings (Loss) per ADS
Basic 0.70 0.42 (0.14)
Diluted 0.70 0.42 (0.14)
Weighted average number of shares used in
computing
earnings per share
Basic 172,767,742 172,706,512 141,624,912
Diluted 172,921,501 172,706,512 141,624,912
CONSOLIDATED CASH FLOW STATEMENT
(US dollars in thousands, except ADS and share data)
Nine Months Ended
September September
30, 2010 30, 2009
Operating activities:
Net income (loss) 107,951 (43,779)
Adjustment to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Equity in earnings of investee - 291
Inventory write-down (290) 68,047
Depreciation and amortization 40,301 20,983
Amortization of deferred convertible bond issue
costs and premium 327 1,937
Allowances for doubtful receivables and advance to
suppliers 6,374 866
Prepaid land use right expensed 551 261
Change in fair value of derivatives 639 -
Gain on early extinguishment of debt, net of
inducement charges - (5,353)
Share-based compensation 2,711 2,627
Loss on disposal of long-lived assets 673 6
Changes in operating assets and liabilities:
Accounts receivable (11,600) (41,472)
Inventories (22,318) (23,955)
Advances to suppliers (25,797) 21,434
Amounts due from related parties 47 (11,783)
Value added tax recoverable 12,274 (28,093)
Prepaid expenses and other current assets (10,124) 6,914
Prepaid land use right (1,044) (110)
Accounts payable 112,421 29,582
Advances from customers 30,933 3,432
Other liabilities 15,796 18,398
Deferred taxes 24,292 (43,028)
Accrued warranty 2,972 255
Net cash provided by (used in) operating activities 287,089 (22,540)
Investing activities:
Purchases of property, plant and equipment (94,519) (273,751)
Advances for purchases of property, plant and
equipment 2,392 75,911
Purchase of other long-term assets (433) (438)
Cash received from government subsidy 5,910 5,959
Proceeds from disposal of property, plant and
equipment 51 -
Restricted cash (48,289) (22,491)
Cash consideration for acquisition - (16,831)
Net cash used in investing activities (134,888) (231,641)
Financing activities:
Proceeds from borrowings 552,595 458,799
Repayment of bank borrowings (569,012) (202,035)
Cash paid for issuance cost (252) -
Proceeds from exercised stock option 468 -
Cash consideration paid to repurchase convertible
bonds (32,715) (19,781)
Net cash provided by (used in) financing activities (48,916) 236,983
Effect of exchange rate changes 1,493 75
Net increase (decrease) in cash and cash equivalents 104,778 (17,123)
Cash and cash equivalents, beginning of year 106,808 112,333
Cash and cash equivalents, end of year 211,586 95,210
CONTACT: In China: Ms. Feng Qi, ReneSola Ltd, +86-573-8477-3903,
feng.qi@renesola.com; Mr. Derek Mitchell, Ogilvy Financial, Beijing,
+86-8520-6284, derek.mitchell@ogilvy.com, In the United States: Ms. Jessica
Barist Cohen, Ogilvy Financial, New York, +1-646-460-9989,
jessica.cohen@ogilvypr.com; In the United Kingdom: Mr. Tim Feather / Mr.
Richard Baty, Westhouse Securities Limited, London, +44-20-7601-6100,
tim.feather@westhousesecurities.com, richard.baty@westhousesecurities.com
END
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