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Earnings Update Q3 2104 – Renesola (SOL)

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Yesterday I wrote about why I think the solar companies’ performance was fair last quarter (Q3 2014). Now a series of posts will follow, giving the earnings update, the outlook and the major reason on which the particular company’s performance was dependent. Let’s start today with ReneSola (SOL). The company was a pure play polysilicon and wafer manufacturer. Today it is amongst the largest shippers of solar panels globally. Read more about ReneSola Solar Panels. Based in China, the company is also a big OEM supplier in the industry. The company declared its Q3 2014 results, which was not so good:

ReneSola Q3 2014 Earning Update

i) Revenue – The revenues for Q3 2014 amounted to $ 372.5 million, which was a 3.7% decline from $ 387.1 million in Q2 2014 and 11.6% decline from $ 419.3 million in Q3 2013.

ii) Shipment – The company shipped almost 664 MW of solar modules and wafers in the current quarter – 462.2 MW modules and  201.8 wafers in Q3 2014. The total shipments declined from 698 MW and 851 MW in the Q2 2014 and Q3 2013 respectively. The current shipment was below guidance of 480MW-500MW.

iii) Gross Margin – ReneSola had a gross margin of 15.3% in Q3 2014 which was near the low end of a 15%-17% guidance range, as against 14.7% in Q2 2014.

iv) Net Income/ Loss – The company reported a net loss of $ 11.7 million in the current quarter, as compared to $ 0.8 million net profit in the last quarter.

v) Cash Balance – The cash balance was $196.7 million as on the quarter ending Q3 2014.

vi) Debt – SOL had $748.8 million in debt and $111.6 million in convertible notes at the end of Q3 2014.

Outlook

For Q4 2014, the Company expects its total solar module shipments to be in the range of 460 MW to 480 MW, and its gross margin to be approximately 13%.

Source: ReneSola Press Release

The company has diversified into downstream project business and is geographically well diversified. However the results were satisfactory. The management says that declining ASP and currency fluctuation were the main reasons for the average performance. ReneSola’s biggest shipper countries are Japan and Europe, which being higher ASP regions were hit by currency fluctuation. China is the lowest ASP region, which is the other major shipping country for ReneSola.

The company has a positive PE and is trading at very low values (~ $ 1.62). The company’s one year performance was also not great, when compared to peers. However, given the fact that solar industry is poised to grow and especially China and Japan are to become the solar industry hubs in the near future, ReneSola should have little to fear. It has a strong potential and local government support, which will help it regain its previous strong position.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

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