ReneSola Q3 results show downstream shift beginning to bear fruit


ReneSola’s ongoing pivot towards downstream solar project development is beginning to bear fruit, as evidenced by third quarter financial data published today that reveals the company has increased its revenue 37.2% compared to the second quarter of the year.

Reaching $368.2 million, the revenue remains slightly down on the same period last year (1.1% below Q3 2014), but is an encouraging turnaround on the summer’s performance, when the shift to project development weighed heavily on ReneSola’s books, resulting in revenue of $268.4 million.

"Our strategic shift to project development, which we initiated approximately two years ago, is already starting to show results," said ReneSola CEO Xianshou Li. "Revenue surged sequentially as we monetized our projects in the U.K. and Japan, resulting in higher gross profit, operating income and earnings per ADS."

Profit for the quarter was $59.3 million, which was tellingly a 3.9% year-over-year improvement and 33.6% up on Q2, while gross margin expanded 16.1% annually, but was sequentially a fraction lower.

ReneSola was, however, able to improve its operating income sequentially by 8.9% to $11.4 million, which was also a 34% increase on Q2 2014. The company also achieved a net income of $8.6 million, up from a net loss of $2.3 million in the second quarter of the year and a net loss of $11.7 million in Q3 2014.

"We are making an intense effort to build a portfolio of high-quality projects in attractive jurisdictions," the CEO added. "Our early success in the U.K. is indicative of what we can achieve around the world." Li said that ReneSola is particularly focused on developing distributed generation solar projects in Europe, North America and Japan. "This should yield attractive returns in the coming year."

The sale of solar projects developed by ReneSola netted the company revenue of $64.6 million in the third quarter, drawn largely from offloading two projects representing 35 MW of generating capacity. Since the Q3 data was collated, ReneSola has sold a 16.5 MW utility scale solar farm in the U.K, and expects to sell a 0.9 MW solar project in Japan during the fourth quarter.

At the end of Q3, ReneSola had 515 MW of solar PV projects in various stages of development, the majority in the U.K. (158 MW) and Poland, where the company’s entire development pipeline amounts to 139 MW.

In terms of module shipments, the 405.5 MW shipped globally over the quarter represented a 25.9% increase on Q2, and wafer shipments of 341.6 MW were also strong, rising 21.3% sequentially and 69.4% year-over-year.

For Q4, ReneSola expects to post revenues in the range of $275 million to $295 million, and a gross margin of 17-18%. This reduced revenue outlook reflects "the redirection of OEM module production away from external sales and towards proprietary project development to pursue high profit", the company stated.

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