ReneSola Announces Third Quarter 2018 Results

SHANGHAI, Nov. 19, 2018 /PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company") (www.renesolapower.com) (SOL), a leading solar project developer, today announced its unaudited financial results for the third quarter ended September 30, 2018.

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Mr. Xianshou Li, ReneSola's Chief Executive Officer, commented, "We delivered another quarter of solid performance, as the effort to execute on ReneSola's transformation over the past twelve months continued to yield results.  Revenue was once again at the high end of our expectations, and we meaningfully improved both gross and operating margins. Net income for the third quarter grew significantly, despite the sequential revenue decline of more than 30%, as anticipated.  These strong results reflect our accelerating business momentum and improving earnings power."

Li continued, "Our overall solar power project pipeline remains solid at around 1.5 GW, and we continue to be optimistic about our opportunities around the world.  We believe that our talented team, diversified geographic coverage and track record of success at every stage of project development positions us for profitable growth in the years ahead."

Third Quarter 2018 Highlights

• Revenue was $18.8 million, toward the high end of the guidance range of $15 to $20 million;
• Key constituents of revenue:
  - $5.5 million from the Project Development business, mainly from sales of community solar projects in Minnesota, United States and France;
  - $3.3 million from EPC services for distributed generation projects in China
  - $10.0 million from the sale of electricity
• Gross margin was 46%, compared to 30% in Q2 2018;
• Income before income tax and noncontrolling interests was $3.6 million, compared to $0.4 million in Q2 2018 and $4.0 million in Q3 2017;
• Connected 6.2 MW of rooftop projects in China;
• Sold 13.9 MW of community solar projects in Minnesota, United States and 6.7 MW of projects in France;
• Solar power project pipeline of approximately 1.5 GW, of which 783.3 MW are late-stage projects.

Third Quarter 2018 Financial Results

Revenue was $18.8 million, compared to $27.8 million in Q2 2018 and $36.3 million in Q3 2017.

Revenue from the Project Development business was $5.5 million, due mainly to sales of 13.9 MW of community solar projects in Minnesota, United States and 6.7 MW of projects in France.

Revenue from the EPC business was $3.3 million due to EPC services for 3.7 MW of distributed generation projects in China.

Revenue from the sale of electricity was $10.0 million. The Company generated 66.1 Million Kwh of electricity from its operating DG projects in China.

Gross profit was $8.6 million, compared to a gross profit of $8.2 million in Q2 2018 and $6.4 million in Q3 2017. Gross margin was 46%, compared to 30% in Q2 2018, mainly due to the seasonality of solar irradiation and better margins in the project development business.

Operating expenses were $2.9 million, up from $2.3 million in Q2 2018 and $2.5 million in Q3 2017. Sales and marketing expenses were $0.1 million, slightly down from $0.2 million in Q2 2018. General and administrative expenses were $2.6 million, slightly down from $2.7 million in Q2 2018.

Operating income was $5.7 million, down from $5.9 million in Q2 2018 and up from $3.8 million in Q3 2017.   Operating margin was 30.4%, compared to 21.2% in Q2 2018.

Total non-operating expenses of $2.1 million included interest expenses of $2.6 million, interest income of $0.1 million and foreign exchange gains of $0.4 million, mainly driven by the appreciation of the Polish zloty against the Euro.

Income before income tax and noncontrolling interests was $3.6 million, compared to $0.4 million in Q2 2018 and $4.0 million in Q3 2017.

Net income was $3.6 million, compared to $0.4 million in Q2 2018 and $4.0 million in Q3 2017.

Financial Position

The Company had cash and cash equivalents of $8.1 million as of September 30, 2018, compared to $24.8 million as of June 30, 2018.  The decline was mainly due to capital expenditures associated with construction activity for our projects in Poland and Hungary. Long-term borrowings were $73.3 million as of September 30, 2018, compared to $72.7 million as of June 30, 2018. The increase was mainly due to the project loan for Hungarian projects. Long-term failed sale-lease back and capital lease liabilities, associated with the financial leasing payables for rooftop projects in China, were $79.9 million as of September 30, 2018, compared to $85.0 million as of June 30, 2018. 

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