China’s vertically-integrates solar project developer, ReneSolar, has announced its financial results for the second quarter of 2016. The company expects a very flat revenue for the full year of 2016 because ASPs of polysilicon and wafers have been falling drastically in the third quarter. ReneSolar owns a pipeline of more than 900MW globally, however, and expects to be profitable.
The module shipments in 2Q16 were 282.4MW, down 19.5% from 1Q16 and down 12.3% from 2Q15. Wafer shipments of 423.3MW represented 20.6% QoQ growth and 50.3% YoY growth on the contrary. Improvement in wafer shipments reflects ReneSola’s wafer capacity expansion strategy.
However, prices of polysilicon and wafers have been decreased rapidly throughout the third quarter of 2016. ReneSola therefore projects flat revenue for this year.
Net revenues of 2Q16 were US$250 million, down by 4.1% from US$260.7 million and by 6.8% from US$268 million. The net revenues were below its guidance of US$280~290 million.
Gross profit of US$41.2 million represented a 7.5% decline QoQ and a 7.3% decline YoY. Gross margin decreased sequentially to 16.5% from 17.1%, yet remained relatively unchanged comparing to 2Q15.
ReneSola reported operating expenses of US$34.8 million, up by 12.4% QoQ and by 12.6% YoY. Nonetheless, operating income decreased sequentially from US$12.2 million to US$6.4 million and annually from US$10.5 million. The net income was US$5.5 million, slightly lower than US$5.7 million in 1Q16 and significantly higher than a net loss of US$2.3 million in 2Q15.
“Although total revenue was below guidance due to recognition timing of the four UK projects sold during the quarter, we believe we should benefit from that revenue as well as the potential sale of another six UK projects in the second half of the year,” commented Xianshou Li, ReneSola's Chief Executive Officer. “We are focused on project development with rapid monetization and expansion through technology improvements, as well as de-emphasis of OEM manufacturing. We have consistently been profitable for the past year, and will continue to improve our capital structure.”
Renesola focuses on developing, operating and selling solar projects. In the second quarter of 2016, the company sold four utility-scale solar projects, 5MW for each and totaled 20MW, in UK. Revenue from the sales of these projects will be recognized in the third quarter of 2016.
The company currently has 938.2MW of projects in various stages of development, 169.6MW in the U.S. and 250MW in UK. In addition, it is starting to identify opportunity in the domestic distributed generation market, and now has 35MW of such projects in its pipeline.