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ReneSola's Q2 op profit flat q/q, but net profit falls by 92%


ReneSola's Q2 op profit flat q/q, but net profit falls by 92%

September 6 (Solar) – Chinese solar projects developer ReneSola Ltd (NYSE:SOL) today reported an operating profit of USD 5.9 million (EUR 5.1m) for the second quarter (Q2) of 2018, similar to that in the first quarter, but its net profit fell by 92%.

The bottom line result plunged to just USD 421,000 from USD 5.44 million a quarter earlier, due to an increase in interest expense and a significant foreign exchange loss of USD 3 million.

The company’s revenue arrived at USD 27.8 million, down by 38% quarter-on-quarter, but very close to the upper end of its Q2 forecast for revenues of USD 20 million – 30 million. ReneSola’s gross margin rose to 30% from 19% in the first quarter as a result of a greater share of electricity sales due to the seasonality of solar irradiation.

In the April-June quarter, the company installed 13.1 MW of rooftop projects in China and 14 MW in Poland. The capacity in Poland and 10.4 MW of solar assets in Turkey are currently for sale. The company’s portfolio of operating assets, meanwhile, included 206.8 MW of Chinese distributed generation (DG) systems, 15.4 MW of solar assets in Romania and 4.3 MW in the UK.

ReneSola has a solar project pipeline of 1.51 GW, of which 670.2 MW is late-stage projects.

The company’s third-quarter (Q3) and full-year (FY) forecasts are in the table.

Forecast periods Q3 FY 2018
Revenue (in USD million) 15-20 130-140
Gross margin (in %) 35-40 20-25
Projects to be monetises (in MW) 13 250-300

It was announced at the end of July that Brookfield Asset Management Inc (TSE:BAM.A) is exclusively negotiating the potential acquisition of ReneSola’s DG assets in China. CEO Xianshou Li said that this deal would provide substantial capital for ReneSola to recycle back into the growth of its business.

(USD 1 = EUR 0.86)

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