Tier-one PV manufacturer ReneSola has reported a significant decline in shipments and sales in the second quarter of 2015, due to a major shift in its business model downstream.
ReneSola reported second quarter revenue of US$268.4 million, a 23.1% decline from the previous quarter and at the low-end of guidance of US$250 million to US$300 million.
Gross margin was 16.5%, up from 10.5% in the first quarter of 2015 and at the low-end of guidance of gross margin of 16% to 18%. Gross profit was US$44.4 million, compared to US$36.7 million in the previous quarter.
Total solar module shipments were 322MW, a 35.1% decline from the previous quarter. The company had not guided shipments for the quarter or provided shipment guidance for the full year. Module shipments were 818.5MW for the first six months of 2015.
PV Tech had estimated PV module shipments in 2015 would be in the range of 2.0GW to 2.2GW, in line with in-house manufacturing capacity, with upside due to OEM agreements, before the company announced last quarter it was exiting all OEM business by year-end.
Only partially filling the revenue void from reduced module shipments ahead of meaningful revenue from its nascent PV project business, ReneSola increased wafer shipments and sales in the quarter.
The company reported wafer shipments of 281.7MW, up from 195.1MW in the prior quarter, noting the increase was only due to “temporary business opportunities”.
PV project business update
The company also noted for the first time that it expected to complete and have operational around 300MW of solar projects by 2016.
ReneSola said it had a total of approximately 77.4MW in existing projects, including 51.1MW in the UK, down from 96.1MW in existing projects, including four utility-scale projects totalling 71MW in the UK and four utility-scale projects totalling 25.1MW said at the time to be in Eastern Europe.
The decrease was primarily due to certain UK projects being sold in the quarter.
Second quarter existing projects include 1.2MW in Japan, 9.7MW in Bulgaria and 15.4MW in Romania, totalling the same figure from the previous quarter of Eastern European projects of 25.1MW.
ReneSola also noted that it had a late-stage project pipeline with over 200MW in development across the UK, US and Japan.
Xianshou Li, ReneSola's chief executive said: “We are proud of the continuous success that we have been demonstrating in executing our solar downstream strategies. The second quarter of 2015 represented an important turning point for ReneSola as we began to reap the benefits of our downstream efforts by beginning to sell solar projects from the 70MW portfolio that we developed and constructed in the UK. While we are scaling back our module business, we have been rapidly building our new solar portfolio comprised of selective high-quality projects mainly from attractive markets including the US, the UK, and Japan. This includes our recently announced US joint venture that will initially complete approximately 150MW based on a high-quality portfolio of projects in the US”
The company guided third quarter revenue to be in the range of US$330 million to US$340 million, and gross margin to be in the range of 15% to 16%.
However, in its second quarter earnings call, ReneSola noted that it expected PV module shipments would increase to around 400MW in the third quarter, primarily driven by strong demand in China and selective order acceptance to maintain margins but keep manufacturing plants optimised.
Based on current data and guidance, ReneSola’s PV module shipments are on track to reach above 1.6GW in 2015, compared to 1.97GW in 2014.