ReneSola increasing OEM module business as sales and shipments increase

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Tier one Chinese PV manufacturer, ReneSola has reported another quarter of record shipments and revenue that exceeded guidance as its PV module and OEM business continued to increase.

The company reported third quarter, 2013 module shipments of 462.9MW, an increase of 6.6% from 434.1MW in the second quarter. Total solar wafer and module shipments were 851.0MW, an increase of 0.2% from 849.3MW in the previous quarter as wafer shipments decreased slightly.

ReneSola reported third quarter revenue of US$419.3 million, an increase of 11.1% from US$377.4 million in the prior quarter. Gross profit was US$34.1 million with a gross margin of 8.1%, up from a gross profit of US$27.4 million, with a gross margin of 7.3% in the previous quarter.

“During the third quarter, we continued to grow our module business while increasing the geographic diversity of our sales, resulting in another quarter of record shipments and revenue that exceeded guidance,” said Xianshou Li, ReneSola's chief executive officer. “We had strong results in our target markets overseas, particularly in the United States, which positively impacted our average selling price.

However, due to an impairment charge of US$194.7 million because of the closing of its original ‘Phase I’ polysilicon plant in Sichuan, the company generated an operating loss of US$180.3 million. These generated an operating margin of negative 43.0% compared to an operating loss of US$16.6 million with an operating margin of negative 4.4% in the second quarter of 2013.

Net cash inflow from operating activities was US$79.6 million in the quarter, compared to US$65.5 million in the second quarter. Net cash and cash equivalents plus restricted cash increased to US$438.5 million at the end of the third quarter.

The company had total debt of US$831.2 million at the end of the third quarter, compared to US$909.9 million in the prior quarter.

Outsourcing growing

ReneSola noted that it had been increasing its global footprint in respect to module shipments, primarily by adding OEM capacity in more regions such as Japan, where it would start an OEM deal in April next year with capacity of 80MW. However, outsourcing globally for the company has reached 950MW, with internal module capacity just ahead at 1.2GW.

“We also expanded our global OEM module capacity in the third quarter after first implementing our OEM strategy at the end of last year. Our OEM module capacity is currently 950 megawatts on top of our internal module capacity of 1.2 gigawatts. Our OEM strategy enables us to grow our top line revenue and market share in our target market, while minimizing capital expenditures. It also provides a number of distinct advantages, including the avoidance of price loss, volume limits and anti-dumping tariffs in markets like the EU. We've been actively building OEM partnerships around the world and currently have OEM capacity in Poland, South Africa, South Korea, Malaysia and Turkey. We expect to expand our OEM capacity to more markets, including Japan,” added Li.

Guidance inches higher

ReneSola said that it expected total module shipments in the fourth quarter of 2013 to be in the range of 490MW to 510MW, and expected overall gross margin to be in the range of 9% to 11%.

With respect to the full year, total solar wafer and module shipments are expected to be in the range of 3.0GW to 3.1GW, with solar module shipments expected to be in the range of 1.70GW to 1.75GW.

The company had previously guided full-year solar wafer and module shipments to between 2.8GW and 3.0GW, while module shipments were expected to be in the range of 1.6GW to 1.8GW.

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