US-based solar power developer Emeren published its financial results for the first quarter of the year, posting total revenues of US$12.9 million, a gross margin of 12.4% and earnings before interest, taxation, degradation and amortisation of US$1.8 million.
The company’s net revenue more than tripled from the figure of US$3.5 million in the first quarter of 2022, but almost halved from revenues of US$25.7 million in the fourth quarter of last year. The company’s reserves of cash and cash equivalents have also fallen consistently, from US$222.9 million in the first quarter of last year to $66.7 million in the first quarter of this year.
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In a letter written to shareholders, CEO Yumin Liu and CFO Ke Chen explained that “delays in receipt of final approvals and more conservative judgement in change of control in our RTB (ready-to-build) project sales” had contributed to the lower quarter-on-quarter revenues.
In May this year, the company reassessed when it had secured “change of control,” that is to say ownership, of a number of projects, including the Branston solar farm in the UK, cutting its operating income by US$9.1 million.
Despite this fall in net revenue, the company’s leaders remain optimistic about the group’s long-term plans. Emeren has already announced plans to build a total solar pipeline capacity of 4GW by the end of this year, ahead of plans to sell up to 600MW of capacity per year from 2024 and onwards. On a conference call announcing the results, Liu noted that the company plans to build 3GW of this capacity in Europe, reaffirming Emeren’s commitment to European power.
“In the remaining months of the year, we expect to have a minimum of 15 or 16 portfolio sales in [Spain, France and Italy]; in almost every single market, we have projects,” said Liu. “We are selling those projects, mostly, as RTB in these countries; China is the only country [in which] we sell deals at the close of business.”
Liu also spoke about the impacts of the fluctuating price of power in Europe on the company, and its projects on the continent. According to Ember, the wholesale electricity price in Europe has fallen from a maximum price of US$205.29 (€191.66) per MWh in January to US$144.51 (€134.92) per MWh in April, figures which are considerably lower than the peak of US$582.08 (€543.48) per MWh reported in August 2022.
“We do not see any – literally any – projects [becoming] uneconomical,” said Liu, pointing to the fact that the average European energy price remains higher than in 2020. “We still see high-bid, high-demand and high-quality projects. Money flowing into the solar market, as I see it, is stronger than the people standing on the side-lines.”