ReneSola, the Chinese vertically integrated solar company, has seen its losses mount for the second quarter in a row as the firm takes further necessary steps towards solar downstream projects and away from solar power production.
Net loss for the first quarter (Q1) was $23.2 million, which follows a Q4 2016 net loss of $25.5 million. In contrast, ReneSolar began 2016 with a net profit of $5.7 million.
These losses can be attributed to vastly reduced revenue of $156.6 million, which was 32.5% below Q4 2016 and 39.9% down on Q1 2016. Lower module average selling prices (ASPs) and contracted shipments served to drag revenues down – module shipments for the quarter were just 266.8 MW (externally), while 44.3 MW were steered towards ReneSola’s downstream projects.
This pivot is taking its toll on the company, at least in the short term. Borrowings increased over the quarter by a further $54.3 million, while project sales for ReneSola-owned solar parks came to just $2.2 million. However, there are further sales in the pipeline, and the company did commission 10 MW of solar PV capacity in the U.K. in Q1.
ReneSola’s global downstream pipeline now stands at more than 1.4 GW, of which more than 600 MW are shovel-ready, hinting at an upturn in cashflow in the forthcoming quarters. Indeed, Q2 guidance published by the company suggests revenue in the range of $180 million to $200 million, while over the full year ReneSola expects to hit close to $1 billion in revenue.
“First quarter results were generally in-line with our expectation, as we continued to gain traction from our downstream project efforts and LED distribution business, while affected by challenging market conditions of our solar power product business,” said ReneSola CEO Xianshou Li. “We continue to execute our strategy to shift our business focus from manufacturing to downstream project development, and I am excited about the progress we are making. For the second quarter of 2017, we expect downstream project sales to increase when compared to the first quarter of 2017 due to continued growth in our project pipeline and our solid execution in project monetization.”