TIDMSOLA
ReneSola Ltd Announces First Quarter 2009 Results and Acquisition of Cell and
Module Manufacturer
- First quarter 2009 average processing cost decreased to $0.36 per watt
- First quarter 2009 silicon consumption rate decreased to 6.0 grams per watt
- Company evolving into fully integrated solar manufacturer through
acquisition of JC Solar
JIASHAN, China, May 21 /PRNewswire-Asia-FirstCall/ -- ReneSola Ltd
("ReneSola" or the "Company") (NYSE: SOL) (AIM: SOLA), a leading global
manufacturer of solar wafers, today announced its unaudited financial results
for the quarter ended March 31, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080506/CNTU030 )
Recent Operating Highlights
-- Q1 2009 wafer and other solar product shipment was 90.5 megawatts
("MW"), of which 70.7 MW was from wafer sales and 19.8 MW was from
tolling services.
-- Q1 2009 export sales reached 60%, demonstrating further diversification
of ReneSola's customer base.
-- Silicon consumption rate decreased to 6.0 grams per watt in Q1 2009
from 6.05 grams per watt in Q4 2008.
-- Average processing cost decreased to US$0.36 per watt in Q1 2009
compared to US$0.39 per watt in Q4 2008.
-- ReneSola strengthened its balance sheet by retiring approximately RMB
270 million of its convertible bond due March 2012 while increasing its
total onshore bank credit lines to US$577 million.
-- Wafer manufacturing capacity expansion is on track and is expected to
increase to 825 MW by July 2009.
-- Phase 1 of Sichuan polysilicon plant remains on schedule to reach
mechanical completion by end of June 2009.
-- ReneSola intends to embark on a two-pronged downstream expansion
strategy that (1) will make it one of the world's most cost competitive
fully integrated solar companies with manufacturing capabilities
spanning from polysilicon to module production, and (2) will seek to
gain a strong foot hold in China's solar project space.
First Quarter 2009 Financial Highlights
-- Q1 2009 net revenues were US$106.9 million, a decrease of 13.0% from
US$123.0 million in Q1 2008 and a decrease of 32.6% from US$158.6
million in Q4 2008.
-- Q1 2009 gross loss and gross margin were US$51.1 million and negative
47.8%, respectively, compared to gross loss and gross margin of
US$130.1 million and negative 82.0%, respectively, in Q4 2008(1). In
the fourth quarter of 2008, the Company recorded a US$137.1 million
inventory write-down against the net realizable value of inventories as
a result of the rapid decrease in the market price and value of
feedstock such as polysilicon and scrap silicon materials, work in
progress materials and finished solar wafers. Excluding the US$68.0
million inventory write-down in Q1 2009(2) In the first quarter of 2009,
the Company recorded a US$68.0 million inventory write-down against the
net realizable value of inventories as a result of the rapid decrease
in the market price and value of feedstock such as polysilicon and
scrap silicon materials, work in progress materials and finished solar
wafers., adjusted gross profit and gross margin were US$17.0 million
and positive 15.9%, respectively.
-- Q1 2009 net loss attributable to holders of ordinary shares was US$30.0
million compared to Q4 2008 net loss attributable to holders of
ordinary shares of US$128.3 million. Q1 2009 adjusted net income
attributable to holders of ordinary shares was US$2.1 million excluding
the inventory write-down(2).
-- Q1 2009 basic and diluted loss per share was US$0.22, and basic and
diluted loss per American Depositary Share ("ADS") was US$0.44.
Three Three Three Three Three
months months months months months
ended ended ended ended ended
3/31/08 12/31/08 12/31/08* 3/31/09 3/31/09*
Unaudited Unaudited Unaudited Unaudited Unaudited
(Adjusted) (Adjusted)
Net revenue (US$000) 122,982 158,623 158,623 106,946 106,946
Gross profit
(loss) (US$000)
27,234 (130,139) 6,916 (51,087) 16,960
Gross margin (%) 22.1% (82.0%) 4.4% (47.8%) 15.9%
Operating profit
(loss) (US$000) 23,187 (143,126) (6,071) (58,346) 9,701
Foreign exchange
loss (US$000) (56) (1,052) (1,052) (550) (550)
Profit (loss) for the
period (US$000) 17,675 (128,275) (8,494) (30,019) 2,083
* Figures noted exclude the US$137.1 million fourth quarter 2008 inventory
write-down and the US$68.0 million first quarter 2009 inventory write-
down.
(1) In the fourth quarter of 2008, the Company recorded a US$137.1 million
inventory write-down against the net realizable value of inventories
as a result of the rapid decrease in the market price and value of
feedstock such as polysilicon and scrap silicon materials, work in
progress materials and finished solar wafers.
(2) In the first quarter of 2009, the Company recorded a US$68.0 million
inventory write-down against the net realizable value of inventories
as a result of the rapid decrease in the market price and value of
feedstock such as polysilicon and scrap silicon materials, work in
progress materials and finished solar wafers.
"Against the backdrop of extremely challenging market conditions, I am
pleased to report that ReneSola produced a resilient first quarter performance
underpinned by relatively strong wafer shipments and further reductions in
production costs," commented Mr. Xianshou Li, ReneSola's chief executive
officer. "We are benefiting from our continued focus on execution and cost
reduction. Our commitment to continual technological and operational
improvements also helps maintain our competitive advantage. As a result, our
production costs were reduced to US$0.36 per watt and our silicon consumption
rate fell to an average of 6.0 grams per watt during the first quarter of 2009.
"I am also very pleased to announce that we recently took the initial
steps towards downstream integration in the PV market through the acquisition
of JC Solar, a China-based cell and module manufacturer with respective
annualized manufacturing capacities of 25 MW and 50 MW. Our plan is to
maintain annual cell manufacturing capacity at 25 MW and to increase annual
module manufacturing capacity to 100 MW during 2009. With our expected
commencement of in-house polysilicon production in July, ReneSola will become
an early mover as a fully integrated solar company. Building a diversified
global customer base remains one of our key strategies and JC Solar possesses
the essential technological certificates necessary for module sales in Europe
and the United States. We expect to quickly gain market share across these
markets by capitalizing on ReneSola's cost competitiveness and JC Solar's cell
and module manufacturing and distribution capabilities.
"As production costs continue to decline, the PV industry is becoming
increasingly competitive. As such, full vertical integration from polysilicon
to module manufacturing becomes key in maintaining cost competitiveness and
gaining market share. We continue to believe there will be a recovery in
global demand as the year progresses and we remain confident in the long term
prospects of the solar industry."
Mr. Charles Bai, ReneSola's chief financial officer, added, "We made
steady progress in liquidity management with another quarter of generating
positive operating cash flows. Our credit facility lines from domestic banks
increased to $577 million during the quarter from $463 million at the end of
fourth quarter of 2008. Cash from operating activities and additional credit
lines enabled us to repurchase approximately RMB 270.0 million of convertible
bonds during the second quarter of 2009 at a significant discount to face
value. We also restructured the repayment profile of our credit facility lines,
increasing the ratio of mid- to long-term loans in our loan portfolio. The
convertible bond repurchases and debt composition restructuring have
contributed additional strength to our balance sheet and will provide added
support for our growth plans."
Financial Results for the First Quarter 2009
Net Revenues
Net revenues for Q1 2009 were US$106.9 million, a decrease of 13.0%
year-over-year and 32.6% sequentially. The decrease in revenues was primarily
attributable to falling wafer ASPs and a reduction in wafer shipments during
the quarter. The average selling price ("ASP") of wafers in Q1 2009
decreased to US$1.27 per watt from US$2.16 in Q4 2008.
Gross Profit (Loss)
Gross loss for Q1 2009 was US$51.1 million, compared to gross loss of
US$130.1 million in Q4 2008 and gross profit of US$27.2 million in Q1 2008.
Excluding the inventory write-down, adjusted gross profit for Q1 2009 was
US$17.0 million. Gross margin for Q1 2009 was negative 47.8%, compared to
negative 82.0% for Q4 2008 and positive 22.1% for Q1 2008. Excluding the
inventory write-down, adjusted gross margin for Q1 2009 was positive 15.9%.
Operating Profit (Loss)
Operating loss for Q1 2009 was US$58.3 million, compared to operating loss
of US$143.1 million for Q4 2008 and operating profit of US$23.2 million for Q1
2008. Excluding the inventory write-down, adjusted operating profit for Q1
2009 was US$9.7 million.
Operating margin for Q1 2009 was negative 54.6%, compared to negative
90.2% for Q4 2008 and positive 18.9% for Q1 2008. Excluding the inventory
write-down, adjusted operating margin for Q1 2009 was 9.1%. Total operating
expenses for Q1 2009 were US$7.3 million, down from US$13.0 million for Q4
2008. Of the total operating expenses for Q1 2009, US$4.0 million was
attributable to general and administrative expenses, down from US$9.2 million
for Q4 2008.
Earnings (Loss) Before Income Tax
Loss before income tax for Q1 2009 was US$62.8 million, compared to a loss
of US$146.9 million for Q4 2008 and earnings of US$21.3 million for Q1 2008.
Excluding the inventory write-down, adjusted income before income tax for Q1
2009 was US$5.3 million. Finance costs increased by 9.6% sequentially,
reflecting the rise in bank borrowings to US$412.7 million, which includes
long-term borrowings of US$135.7 million as of March 31, 2009. Q1 2009 foreign
exchange loss was approximately US$0.6 million compared to a foreign exchange
loss of US$1.1 million for Q4 2008.
Taxation
A tax benefit of US$32.8 million was recognized for Q1 2009, with US$37.1
million of the total tax benefit arising from the estimated loss, compared
with a tax benefit of US$18.3 million for Q4 2008, of which US$17.3 million of
the total tax benefit was attributable to the Q4 2008 inventory write-down.
Net Income (Loss) Attributable To Holders of Ordinary Shares
Net loss attributable to holders of ordinary shares for Q1 2009 was
US$30.0 million, compared to net loss attributable to holders of ordinary
shares of US$128.3 million for Q4 2008 and net income attributable to holders
of ordinary shares of US$17.7 million for Q1 2008. Excluding the inventory
write-down, adjusted net income attributable to holders of ordinary shares for
Q1 2009 was US$2.1 million.
Q1 2009 basic and diluted loss per share was US$0.22, and basic and
diluted loss per ADS was US$0.44. Excluding the inventory write-down, Q1 2009
adjusted basic and diluted earnings per share was US$0.02, while adjusted
basic and diluted earnings per ADS was US$0.04.
Recent Business Developments
Acquisition of JC Solar
ReneSola's wholly owned subsidiary Zhejiang Yuhui Solar Energy Source Co.,
Ltd entered into an agreement on May 20, 2009 to acquire the entire issued
share capital of solar cell and module manufacturer, Wuxi Jiacheng Solar
Energy Technology Co. ("JC Solar") (the "Acquisition"). The total
consideration for the Acquisition was RMB 118 million, paid in cash.
JC Solar is located in the Yixing Economic Development Zone of Wuxi City,
Jiangsu province, and is an established cell and module manufacturer. JC Solar
has approximately 300 employees with current annual cell production capacity
of 25 MW and annual module production capacity of 50 MW. In the year ended
December 31, 2008, JC Solar recorded an unaudited net profit of RMB 69 million
and had a net asset value of RMB 98 million at that date. The Acquisition
provides ReneSola with a means of downstream integration.
Convertible Bond Repurchases
On May 19, 2009, ReneSola announced that during the second quarter of 2009,
the Company repurchased approximately RMB 270 million aggregate principal
amount of its RMB 928,700,000 U.S. Dollar Settled 1.0% Convertible Bonds due
March 26, 2012 (the "Bonds"), for a total consideration of approximately RMB
186 million. The total consideration was paid approximately 76% by cash and
24% by shares.
ReneSola may from time to time seek to make additional repurchases of its
Bonds. Such repurchases, if any, will depend on prevailing market conditions,
the Company's liquidity requirements and other factors.
Zhejiang Province's First BIPV Project
On May 13, 2009, ReneSola announced that it obtained approval from
Zhejiang's provincial government to pioneer a 5 MW building integrated
photovoltaic ("BIPV") rooftop project in China's Zhejiang province. The BIPV
rooftop project has a total planned area of 80,400 square meters on several
government buildings in Jiashan County, Zhejiang province and is subject to
final approval by the Ministries of Finance and Housing and Urban-Rural
Development.
The BIPV rooftop project has a budgeted total investment of RMB 160
million and will be partially funded through the RMB 15 per watt subsidy
announced by China's Ministry of Finance in March 2009. The local government
may provide additional subsidies and ReneSola has reached a tentative
partnership agreement with a local bank to provide additional funding.
Divestment of ReneSola Malaysia
In July 2007, the Company invested approximately Ringgt Malaysia 1.3
million for 51% equity interest in ReneSola (Malaysia) SDN. BHD ("ReneSola
Malaysia"), which was incorporated in Malaysia in February 2007 to process
certain types of reclaimable silicon raw materials sourced overseas that did
not meet the import requirements of the Chinese government. The processed
reclaimable silicon was then shipped to Zhejiang Yuhui for further processing
as feedstock for the Company's wafer manufacturing. The Company sold its 51%
equity interest to the Malaysian joint venture partner for a consideration of
Ringgt Malaysia 1 as part of the Company's strategy to use polysilicon,
instead of reclaimable silicon materials, as the Company's primary feedstock
for wafer manufacturing. The divestment was recently completed in April 2009.
2009 Outlook
The Company's wafer shipment for the second quarter of 2009 is expected to
be in the range of 85 MW to 95 MW, with full year product shipment expected to
be between 450 MW to 500 MW. Full year revenue is expected to be between
US$500 million to US$550 million.
Conference Call Information
ReneSola's management will host an earnings conference call on Thursday,
May 21, 2009 at 9 am U.S. Eastern Time / 9 pm Beijing/Hong Kong time / 2 pm
British Summer Time.
Dial-in details for the earnings conference call are as follows:
U.S. / International: +1-617-614-6205
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 May 28, 2009:
International: +1-617-801-6888
Passcode: 16044506
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 global manufacturer of solar
wafers based in China. Capitalizing on proprietary technologies and technical
know-how, ReneSola manufactures monocrystalline and multicrystalline solar
wafers. In addition, ReneSola strives to enhance its competitiveness through
upstream integration into virgin polysilicon manufacturing. 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). For more information about ReneSola, please
visit http://www.renesola.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 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:
Mr. Thomas Smith
Ogilvy Financial, New York
Tel: +1-212-880-5269
Email: thomas.smith@ogilvypr.com
In the UK:
Mr. Tim Feather / Mr. Richard Baty
Hanson Westhouse Limited
Tel: +44-20-7601-6100
Email: tim.feather@hansonwesthouse.com /
richard.baty@hansonwesthouse.com
CONSOLIDATED BALANCE SHEET
As at As at As at
March 31, December 31, March 31,
2008 2008 2009
US$000 US$000 US$000
ASSETS
Current assets:
Cash and cash equivalents 67,441 112,333 172,614
Restricted cash -- 5,958 67,394
Accounts receivable, net of
allowances for doubtful receivables 16,234 43,160 34,965
Inventories 156,277 193,036 148,856
Advances to suppliers 88,843 36,991 18,930
Amounts due from related parties 36,046 457 441
Value added tax recoverable 3,808 15,498 22,829
Prepaid expenses and other current
assets 4,972 13,722 10,107
Deferred tax assets 8,861 18,979 38,748
Total current assets 382,482 440,134 514,884
Property, plant and equipment, net 172,330 341,427 415,561
Prepaid land rent, net 9,391 13,472 13,372
Deferred tax assets 629 2,340 15,049
Deferred convertible bond issue costs 3,087 1,970 1,573
Advances to suppliers over one year 45,729 48,635
Advances for purchases of property,
plant and equipment 77,169 161,705 164,959
Other long-term assets 1,011 1,064
Total assets 645,088 1,007,788 1,175,097
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings 88,968 191,987 277,006
Accounts payable 22,373 37,942 37,181
Advances from customers 72,188 49,284 58,584
Amount due to related party 15 11,863 24
Other current liabilities 12,328 42,060 47,156
Total current liabilities 195,872 333,136 419,951
Convertible bond payable 133,999 138,904 139,080
Long-term borrowings 34,085 32,833 135,667
Advances from customers over one year 105,203 113,181
Other long-term liabilities 1,114 15,624 15,197
Total liabilities 365,070 625,700 823,076
ReneSola Ltd. Shareholders' equity
Common shares 145,291 330,666 330,666
Additional paid-in capital 15,579 17,769 18,457
Retained earnings (Deficit) 83,875 11,294 (18,725)
Accumulated other comprehensive
income 17,638 22,080 21,623
Total ReneSola Ltd. Shareholders'
equity 262,383 381,809 352,021
Noncontrolling interests 17,635 279 --
Total equity 280,018 382,088 352,642
Total liabilities and equity 645,088 1,007,788 1,175,097
CONSOLIDATED INCOME STATEMENT
Three months Three months Three months
ended ended ended
March 31, December 31 March 31,
2008 2008 2009
US$000 US$000 US$000
Net revenues 122,982 158,623 106,946
Cost of revenues (95,748) (288,762) (158,033)
Gross profit (loss) 27,234 (130,139) (51,087)
Operating expenses:
Sales and marketing (267) (43) (116)
General and administrative (3,389) (9,160) (3,956)
Research and development (442) (2,771) (3,446)
Impairment loss on property, plant
and equipment -- (763) --
Other general income (expenses) 51 (250) 259
Total operating expenses (4,047) (12,987) (7,259)
Income (loss) from operations 23,187 (143,126) (58,346)
Interest income 306 929 456
Interest expenses (2,144) (3,692) (4,048)
Foreign exchange (loss) gain (56) (1,052) (550)
Equity in losses of investee -- -- (291)
Income (loss) before income tax 21,293 (146,941) (62,779)
Income tax benefit(expenses) (3,560) 18,278 32,760
Net income (loss) 17,733 (128,663) (30,019)
Less: net (income) loss
attributable to noncontrolling
interests (58) 388 --
Net income (loss) attributable to
holders of ordinary shares 17,675 (128,275) (30,019)
Earnings (Loss) per share
Basic 0.15 (0.93) (0.22)
Diluted 0.14 (0.93) (0.22)
Weighted average number of shares
used in computing earnings per
share:
Basic shares 113,906,186 137,624,912 137,624,912
Diluted shares 124,460,612 137,624,912 137,624,912
ADJUSTED CONSOLIDATED INCOME STATEMENT
Three months Adjustment Three months
ended for inventory ended
March 31, write-down March 31,
2009 2009
US$000 US$000 US$000
(Adjusted
Non-GAAP)
Net revenues 106,946 106,946
Cost of revenues (158,033) 68,047 (89,986)
Gross profit (loss) (51,087) 68,047 16,960
Operating expenses:
Sales and marketing (116) (116)
General and administrative (3,956) (3,956)
Research and development (3,446) (3,446)
Impairment loss on property,
plant and equipment -- --
Other general income
(expenses) 259 259
Total operating expenses (7,259) (7,259)
Income (loss) from operations (58,346) 68,047 9,701
Interest income 456 456
Interest expenses (4,048) (4,048)
Foreign exchange (loss) gain (550) (550)
Equity in earnings of investee 330 (291)
Income (loss) before income tax (62,779) 68,047 5,268
Income tax benefit (expenses) 32,760 (35,945) (3,185)
Net income (loss) (30,019) 32,102 2,083
Less: net (income) loss
attributable to
noncontrolling interests -- --
Net income (loss)
attributable to holders of
ordinary shares (30,019) 32,102 2,083
Earnings (Loss) per share
Basic (0.22) 0.02
Diluted (0.22) 0.02
Weighted average number of
shares used in computing
earnings per share:
Basic shares 137,624,912 137,624,912
Diluted shares 137,624,912 137,624,912
(Cont.)
Three months Adjustment Three months
ended for inventory ended
December 31, write-down December 31,
2008 2008
US$000 US$000 US$000
(Adjusted
Non-GAAP)
Net revenues 158,623 158,623
Cost of revenues (288,762) 137,055 (151,707)
Gross profit (loss) (130,139) 137,055 6,916
Operating expenses:
Sales and marketing (43) (43)
General and administrative (9,160) (9,160)
Research and development (2,771) (2,771)
Impairment loss on property,
plant and equipment (763) (763)
Other general income
(expenses) (250) (250)
Total operating expenses (12,987) (12,987)
Income (loss) from
operations (143,126) 137,055 (6,071)
Interest income 929 929
Interest expenses (3,692) (3,692)
Foreign exchange (loss) gain (1,052) (1,052)
Equity in earnings of
investee -- --
Income (loss) before income
tax (146,941) 137,055 (9,886)
Income tax benefit
(expenses) 18,278 (17,274) 1,004
Net income (loss) (128,663) 119,781 (8,882)
Less: net (income) loss
attributable to
noncontrolling interests 388 388
Net income (loss)
attributable to holders of
ordinary shares (128,275) 119,781 (8,494)
Earnings (Loss) per share
Basic (0.93) (0.06)
Diluted (0.93) (0.06)
Weighted average number of
shares used in computing
earnings per share:
Basic shares 137,624,912 137,624,912
Diluted shares 137,624,912 137,624,912
SOURCE ReneSola Ltd
END
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