ReneSola achieves record third quarter results; plans 2011 capacity expansion

Consequently, it has raised is fourth quarter guidance and is planning to expand its capacity next year.

The company says its net income hit USD$60.1 million, an increase of 66.7 percent from USD$36.1 million in the second quarter of the year, while its wafer and module shipments reached 324.9 megawatts (MWs).

As a result of the “robust” market demand for solar products, ReneSola states that it expects total solar wafer and module shipments to be in the range of between 310 MW to 330 MW, in the fourth quarter, while revenues are expected to hit between USD$340 million and USD$360 million. Gross profit margin, on the other hand, is predicted to be between 30 percent to 32 percent.

It adds that for the full year, wafer and module shipments are expected to be in the range of 1.13 gigawatts (GWs) to 1.15 GW, and should increase to be between 1.6 GW to 1.7 GW next year, thus representing an increase of 42 percent to 48 percent year-on-year.

The company says that it will continue to build on its polysilicon production capabilities in the coming quarters, in order to “mitigate raw material volatility and diversify procurement risk”. It explains that it produced around 269 metric tons (MT) of polysilicon in this quarter, which is an increase of 66 percent, from approximately 162 MT in the second quarter.

It went on to say that it expects to yield 500 MT to 600 MT of polysilicon during the fourth quarter of the year, with production costs reduced to USD$45 per kilogram by the end of the quarter. It says its plant is on target to produce 3,000 MT to 3,500 MT, with production costs below USD$35 per kilogram by the end of the first half of next year.

In terms of its wafer business, ReneSolar says it continued to “excel” as wafer processing costs were further reduced to USD$0.25/watt (W), with average polysilicon input costs of USD$50 per kilogram to USD$55 per kilogram.

For the fourth quarter, the company expects to lower its wafer processing costs to USD$0.24/W and achieve average polysilicon costs of USD$55 per kilogram to USD$60 per kilogram. Year-to-date, the company says it has signed nine new long-term wafer contracts for a period of one to five years under fixed volume and fixed pricing schedules, totaling 820 MW for 2011. This represents 68 percent of the its expected wafer product shipments.

Furthermore, the company says it continues to advance its downstream module business. It delivered record module shipments of 98.3 MW with an ASP of USD$1.85/W in the third quarter. It adds that it expects to achieve similar module shipments and ASP in the fourth quarter and expects module shipments to reach 400 MW next year.

Capacity expansion

In total, the company says it expects to spend USD$150 million next year in expanding 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.

ReneSola says it generated “strong” operating cash flows of USD$118.7 million in the third quarter of the year, bringing total operating cash flows to USD$287.1 million for the first nine months.

“Consistently strong” operating cash flows and a net cash and cash equivalents, and restricted cash position of USD$286.6 million at the end of the third quarter, compared to USD$246.6 million at the end of the second quarter, says the company, allowed it to steadily reduce its net debt-to-equity ratio to below 50 percent as of September 30.

At the company’s annual general meeting on August 20, ReneSola says it passed a resolution to cancel its AIM quotation effective November 30. An application has therefore been made to cancel the AIM quotation with effect from this date.

Mr. Xianshou Li, ReneSola’s chief executive officer commented: "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."