Chinas Renesola has revealed a $18.5 million net loss in its first quarter financial results for 2015 as the company juggles a challenging macroeconomic climate, foreign exchange volatility and its transition towards downstream development and servicing.
The Q1 data reveals that total solar module shipments rose slightly by 1.6% on the previous quarter to reach 496.4 MW, yet net revenues decreased over that same period by 9.8%, falling to $349 million from $387 million in Q4 2014. Year-over-year, net revenues were down 15.9% for Q1.
The companys gross profit margin came in at 10.5%, with gross profit of $36.7 million below that of $51.2 million posted in Q4 2014. This drove operating losses to $9.5 million, with an operating margin of negative 2.7%. In the fourth and final quarter of 2014, ReneSolas operating margin was negative 0.6%, with operating losses of just $2.2 million.
The Q1 data was lower than ReneSolas guidance projections, with the "headwind from foreign exchange fluctuations" cited as a factor, as were decreases in module ASPs and a delay in revenue recognition on a U.K. project.
ReneSola CEO Xianshou Li remarked that the first quarter was backdropped by a number of macroeconomic challenges that while tough would not halt the companys transition of its business into downstream project development and servicing.
"We are leveraging the flexibility in our business model to quickly respond to changing market dynamics and to capture market opportunities," said Li. "At the beginning of 2015 we began to scale back our global OEM capacity and focus more on our downstream project opportunities."
This focus on downstream included the complete of more than 70 MW of solar PV projects in the U.K. that the company expects to monetize in the near term. There are also plans to expand ReneSolas downstream project portfolio in the second half of the year.
"As we continue with this strategic transition into the downstream services and project area," added Li, "we believe we will be better positioned to achieve long-term profitability."
ReneSolas CFO Daniel K. Lee provided further details of the companys transition process, adding that in Q1 ReneSolar reduced its inventory by $88.8 million and reduced convertible notes by $31.7 million. "Going forward," he said, "we expect to further improve our balance sheet as well as cash flow as we monetize on our existing project portfolio and successfully execute on our long-term downstream strategy."
The company has 96.1 MW of existing solar projects in development, 71 MW of which is in the U.K., with a further four utility-scale project totaling 25. 1MW in Eastern Europe.