TIDMSOLA
ReneSola Ltd Announces Second Quarter 2009 Results
JIASHAN, China, Aug. 12 /PRNewswire-Asia-FirstCall/ -- ReneSola Ltd
("ReneSola" or the "Company") (NYSE: SOL) (AIM: SOLA), a leading vertically
integrated Chinese manufacturer of solar products, today announced its
unaudited financial results for the second quarter ended June 30, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080506/CNTU030 )
Recent Operating Highlights
-- According to schedule, ReneSola commenced production of the first
batch of polysilicon from Phase 1 of its two-phase, 3,000 metric
tonne ("MT") annualized capacity polysilicon manufacturing facility
in China's Sichuan province in July 2009. Production in 2009 is
expected to be in the range of 400 MT to 500 MT, while production for
2010 is expected to be in the range of 2,800 MT to 2,900 MT.
-- ReneSola successfully completed the acquisition of Wuxi Jiacheng
Solar Energy Technology Co. ("JC Solar"), on May 31, 2009. In June
2009, JC Solar shipped 2.7 megawatts ("MW") of modules and recorded
gross margin of over 30%.
-- Recently, ReneSola further enhanced its liquidity by increasing its
total onshore bank credit lines to US$634 million, with an additional
US$133 million in credit lines expected from Bank of China.
Results for the Second Quarter of 2009
Product Shipment
Total solar product shipment in Q2 2009 was 85.9 MW, consisting of 83.2 MW
from wafer shipments and 2.7 MW from module shipments.
Net Revenues
Net revenues for Q2 2009 were US$82.6 million, a decrease of 22.7%
sequentially and 52.2% year-over-year.
Gross Profit (Loss)
Gross profit for Q2 2009 was US$4.3 million, compared to gross loss of
US$51.1 million in Q1 2009(1) and gross profit of US$42.8 million in Q2 2008.
Gross margin for Q2 2009 was 5.1%, compared to negative 47.8% for Q1 2009 and
positive 24.7% for Q2 2008.
Operating Profit (Loss)
Operating loss for Q2 2009 was US$4.0 million, compared to an operating
loss of US$58.3 million for Q1 2009(1). Operating margin for Q2 2009 was
negative 4.8%, compared to negative 54.6% for Q1 2009(1). Total operating
expenses for Q2 2009 were US$8.2 million, an increase from US$7.3 million for
Q1 2009, mainly due to the US$0.78 million amortization of intangible assets
consisting of customer relations and order backlog from the JC Solar
acquisition.
Earnings (Loss) Before Income Tax
Loss before income tax for Q2 2009 was US$2.9 million, compared to a loss
of US$62.8 million for Q1 2009(1). The Company recognized a net gain of US$5.4
million as a result of its US$40.1 million convertible bond repurchase using
cash and issuance of 4,000,000 ordinary shares during the quarter.
Taxation
A tax expense of US$0.7 million was recognized for Q2 2009, compared with a
tax benefit of US$32.8 million for Q1 2009, as a result of the inventory
write-down in Q1 2009(1).
Net Income (Loss) Attributable To Holders of Ordinary Shares
Net loss attributable to holders of ordinary shares for Q2 2009 was US$3.6
million, compared to net loss attributable to holders of ordinary shares of
US$30.0 million for Q1 2009(1).
Q2 2009 basic and diluted loss per share was US$0.03, and basic and diluted
loss per ADS was US$0.05.
Three months Three months Three months
ended ended ended
June 30, 2008 March 31, 2009 June 30, 2009
(Unaudited) (Unaudited) (Unaudited)
Net revenue (US$000) 173,007 106,946 82,629
Gross profit (loss) (US$000) 42,786 (51,087) 4,251
Gross margin (%) 24.7 (47.8) 5.1
Operating profit (loss)
(US$000) 34,535 (58,346) (3,962)
Foreign exchange loss
(US$000) (797) (550) (504)
Profit (loss) for the
period (US$000) 23,309 (30,019) (3,589)
"The second quarter of 2009 marked an historic quarter in ReneSola's
evolution as a solar company," commented Mr. Xianshou Li, ReneSola's chief
executive officer. "During the quarter, we completed our transformation from
one of the world's largest manufacturers of solar wafers into a low-cost, fully
integrated producer of solar products following the commencement of production
at our 3,000 MT Sichuan polysilicon manufacturing facility and the successful
acquisition of JC Solar. We have demonstrated our resilience and ability to
achieve strategic and operational milestones despite the continuing difficult
operating environment. We expect that as industry fundamentals continue to
improve, the benefits brought forward by our fully integrated operations will
further enhance our competitive position in the global solar industry."
Mr. Charles Bai, ReneSola's chief financial officer, added, "Our results
for the second quarter of 2009 marked a significant step toward a return to
profitability for ReneSola. In the face of a challenging overall environment,
we increased our gross profit margin to 5.1% as a result of prudent inventory
and purchasing management and improved manufacturing efficiency. We are
hopeful that during the remainder of the year, we will continue to see margin
improvement as a result of stable wafer pricing and our inventory carrying
value more closely resembling spot polysilicon market prices."
Recent Business Developments
Financing Update
ReneSola's wholly-owned subsidiary, Zhejiang Yuhui Solar Energy Source Co.,
Ltd ("Zhejiang Yuhui"), recently signed a strategic cooperation agreement (the
"agreement") with Bank of China, Jiaxing Branch (the "Bank"). Under terms of
the agreement, the Bank will grant total credit facilities of US$249 million to
Zhejiang Yuhui. The new credit facilities include existing credit facilities
of US$116 million that the Bank has already granted to Zhejiang Yuhui. The
credit facilities include short-term credit lines for working capital, mid- to
long-term project loans, loans to fund acquisitions, and domestic and
international trade finance. The grant of facilities is subject to approval by
the provincial branch of Bank of China.
In addition to the credit facilities, the Bank also intends to provide mid-
to long-term financing to solar projects that the Company has been developing,
subject to the bank's internal risk assessment and approval procedures.
Sichuan Polysilicon Facility Launches Production
As announced in mid-July of 2009, the Company successfully commenced
production of the first batch of polysilicon from Phase 1 of its two-phase,
3,000 MT annualized capacity polysilicon manufacturing plant. Phase 2 is
expected to reach mechanical completion in September of 2009.
Output from the polysilicon facility is expected to be in the range of 400
MT to 500 MT in 2009 and is now expected to increase to between 2,800 MT and
2,900 MT in 2010. The facility utilizes a close-loop Advanced Siemens process
for polysilicon production. Polysilicon production cost is expected to decline
to between approximately US$40 per kilogram to US$45 per kilogram by the first
half of 2010.
Successful Acquisition and Integration of JC Solar
As previously announced, Zhejiang Yuhui entered into an agreement on May
20, 2009 to acquire the entire issued share capital of the solar cell and
module manufacturer JC Solar. The acquisition closed on May 31, 2009.
As of June 30, 2009, JC Solar had annual solar cell and module
manufacturing capacities of 25 MW and 50 MW, respectively. By the end of 2009,
ReneSola is expected to have annual solar cell manufacturing capacity of 100 MW
and solar module manufacturing capacity of 250 MW.
Letters of Intent Signed for Domestic Projects
As previously announced, the Company entered into a letter of intent with
the Yancheng city government in Jiangsu province to develop a 500 MW on-grid
solar power generation project. In addition, the Company has been granted the
exclusive right in a letter of intent with the Panzhihua east district
government in Sichuan province to develop a 5 MW rooftop project. Both projects
are subject to feasibility studies and approvals by various government
authorities.
2009 Outlook
The Company expects revenues to increase by 60% to 70% sequentially in Q3.
The Company maintains its full year product shipment outlook of 450 MW to
500 MW and its full year revenue outlook of US$500 million to US$550 million.
Conference Call Information
ReneSola's management will host an earnings conference call on Wednesday,
August 12, 2009 at 8:30 a.m. U.S. Eastern Time / 8:30 p.m. Beijing/Hong Kong
time / 1:30 p.m. 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 August 19, 2009:
International: +1-617-801-6888
Passcode: 36277347
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
products 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.
(1) 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.
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 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
December 31, March 31, June 30,
2008 2009 2009
US$000 US$000 US$000
ASSETS
Current assets:
Cash and cash equivalents 112,333 172,614 173,543
Restricted cash 5,958 67,394 58,068
Accounts receivable, net of
allowances for doubtful receivables 43,160 34,965 35,319
Inventories 193,036 148,856 142,703
Advances to suppliers 36,991 18,930 20,174
Amounts due from related parties 457 441 457
Value added tax recoverable 15,498 22,829 35,374
Prepaid expenses and other current
assets 13,722 10,107 5,772
Deferred tax assets 18,979 38,748 12,877
Total current assets 440,134 514,884 484,287
Property, plant and equipment, net 341,427 415,561 510,085
Prepaid land rent, net 13,472 13,372 19,505
Other Intangible assets -- -- 3,934
Deferred tax assets 2,340 15,049 45,568
Deferred convertible bond issue costs 1,970 1,573 834
Advances to suppliers over one year 45,729 48,635 40,958
Advances for purchases of property,
plant and equipment 161,705 164,959 139,359
Equity investment -- -- --
Other long-term assets 1,011 1,064 1,397
Goodwill -- -- 5,323
Total assets 1,007,788 1,175,097 1,251,250
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings 191,987 277,006 347,939
Accounts payable 37,942 37,181 42,055
Advances from customers 49,284 58,584 43,872
Amount due to related party 11,863 24 24
Other current liabilities 42,060 47,156 59,321
Total current liabilities 333,136 419,951 493,211
Convertible bond payable 138,904 139,080 98,992
Long-term borrowings 32,833 135,667 159,586
Advances from customers over one year 105,203 113,181 114,074
Other long-term liabilities 15,624 15,197 20,621
Total liabilities 625,700 823,076 886,484
ReneSola Ltd. Shareholders' equity
Common shares 330,666 330,666 345,645
Additional paid-in capital 17,769 18,457 19,630
Retained earnings (deficit) 11,294 (18,725) (22,313)
Accumulated other comprehensive
income 22,080 21,623 21,804
Total ReneSola Ltd. Shareholders'
equity 381,809 352,021 364,766
Noncontrolling interests 279 -- --
Total equity 382,088 352,021 364,766
Total liabilities and equity 1,007,788 1,175,097 1,251,250
CONSOLIDATED INCOME STATEMENT
Three months Three months Three months
ended ended ended
June 30, March 31, June 30,
2008 2009 2009
US$000 US$000 US$000
Net revenues 173,007 106,946 82,629
Cost of revenues (130,221) (158,033) (78,378)
Gross profit (loss) 42,786 (51,087) 4,251
Operating expenses:
Sales and marketing (231) (116) (1,497)
General and administrative (4,869) (3,956) (4,503)
Research and development (3,504) (3,446) (3,401)
Other general income (expenses) 353 259 1,188
Total operating expenses (8,251) (7,259) (8,213)
Income (loss) from operations 34,535 (58,346) (3,962)
Interest income 234 456 176
Interest expenses (2,755) (4,048) (3,972)
Foreign exchange (loss) gain (797) (550) (504)
Equity in earnings of investee -- (291) --
Gain on early extinguishment of
debt, net of inducement charges -- -- 5,353
Income (loss) before income tax 31,217 (62,779) (2,909)
Income tax benefit (expenses) (6,844) 32,760 (680)
Net income (loss) 24,373 (30,019) (3,589)
Less: net (income) loss attributable
to noncontrolling interests (1,064) -- --
Net income (loss) attributable to
holders of ordinary shares 23,309 (30,019) (3,589)
Earnings (Loss) per share
Basic 0.20 (0.22) (0.03)
Diluted 0.19 (0.22) (0.03)
Weighted average number of shares
used in computing earnings per
share:
Basic shares 120,159,747 137,624,912 139,383,154
Diluted shares 130,898,990 137,624,912 139,383,154
CONSOLIDATED CASH FLOW STATEMENT
Six months Six months
ended ended
June 30, June 30,
2008 2009
US$000 US$000
Operating activities:
Net income (loss) 40,984 (33,608)
Adjustment to reconcile net income
(loss) to net cash used in
operating activities:
Noncontrolling interests 1,122 --
Equity in earnings of investee -- 291
Inventory write-down -- 68,047
Provision for purchase commitment -- --
Depreciation and amortization 6,112 13,457
Amortization of deferred convertible
bond issue costs and premium 1,528 1,426
Allowances for doubtful receivables 253 631
Prepaid land use right expensed 117 127
Change in fair value of derivatives (573) (1)
Gain on early extinguishment of
debt, net of inducement charges -- (5,353)
Share-based compensation 1,845 1,861
Impairment in investment -- --
Loss on disposal of long-lived assets -- 14
Changes in operating assets and
liabilities:
Accounts receivable 5,526 9,951
Inventories (84,370) (14,246)
Advances to suppliers (43,641) 19,379
Amounts due from related parties 903 (11,816)
Value added tax recoverable 5 (19,082)
Prepaid expenses and other current
assets (3,716) 7,323
Prepaid land use right (1,579) (110)
Accounts payable 7,476 2,954
Advances from customers 30,794 2,334
Other liabilities 3,999 2,981
Deferred taxes 5,380 (37,527)
Accrued Warranty -- 65
Net cash provided by (used in)
operating activities (27,835) 9,098
Investing activities:
Purchases of property, plant and
equipment (72,998) (164,024)
Advances for purchases of property,
plant and equipment (57,254) 18,186
Purchase of other long-term assets -- (447)
Cash received from government
subsidy -- 5,959
Proceeds from disposal of investment -- (635)
Proceeds from disposal of property,
plant and equipment -- --
Restricted cash -- (51,722)
Cash consideration for acquisition -- (16,831)
Cash associated with deconsolidated
subsidiary (4,416) --
Net cash used in investing
activities (134,668) (209,514)
Financing activities:
Proceeds from borrowings 120,938 436,780
Repayment of bank borrowings (40,348) (155,437)
Net proceeds from issuance of common
shares 294,012 --
Proceeds from exercised stock option 243 --
Dividend paid -- --
Cash received from related parties 15 --
Cash paid to related parties -- --
Cash consideration paid to
repurchase convertible bonds -- (19,781)
Net cash provided by financing
activities 374,860 261,562
Effect of exchange rate changes 8,659 64
Net increase in cash and cash
equivalents 221,016 61,210
Cash and cash equivalents, beginning
of year 53,137 112,333
Cash and cash equivalents, end of
year 274,153 173,543
SOURCE ReneSola Ltd
END
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