ReneSola Ltd, a fully integrated solar project developer and operator, has announced its unaudited financial results for the third quarter (Q3), ending September 2018.
The gross profit was $8.6 million, compared to $8.2 million in Q2 2018 and $8.4 million in Q1 2018. The gross profit for Q3 2018 is $2.2 million more than the $6.4 million gross profit declared by the firm in Q3 2017. Gross margin was 46 percent compared to 30 percent in Q2 2018, mainly due to the seasonality of solar irradiation and better margins in the project development business.
The generated revenue was $18.8 million, compared to $27.8 million in Q2 2018 and $33.6 million in Q3 2017. According to the company, revenue from the project development business was $5.5 million, due to sale of 13.9 MW of community solar projects in Minnesota, United States and 6.7 MW of projects in France. Revenue from the engineering procurement and construction (EPC) business was $3.3 million as a result of EPC services provided for 3.7 MW of distributed generation projects in China.
Revenue from the sale of electricity was $10 million. The company generated 66.1 million kWh of electricity from its operating distributed generation projects in China.
Operating expenses were $2.9 million, up from $2.3 million in Q2 2018 and $2.5 million in Q3 2017. Sales and marketing expenses were $0.1 million, slightly down from $0.2 million in Q2 2018. General and administrative expenses were $2.6 million, slightly down from $2.7 million in Q2 2018. Operating income was $5.7 million, down from $5.9 million in Q2 2018 and up from $3.8 million in Q3 2017. Operating margin was 30.4 percent, compared to 21.2 percent in Q2 2018.
Total non-operating expenses of $2.1 million included interest expenses of $2.6 million, interest income of $0.1 million and foreign exchange gains of $0.4 million, mainly driven by the appreciation of the Polish zloty against the Euro. Income before income tax and noncontrolling interests was $3.6 million, compared to $0.4 million in Q2 2018 and $4.0 million in Q3 2017. Net income was $3.6 million, compared to $0.4 million in Q2 2018 and $4.0 million in Q3 2017.
The company had cash equivalents of $8.1 million as of September 30, 2018, compared to $24.8 million as of June 30, 2018. The decline was mainly due to capital expenditures associated with the construction activity for our projects in Poland and Hungary.
Long-term borrowings were $73.3 million as of September 30, 2018, compared to $72.7 million as of June 30, 2018. The increase was mainly due to the project loan for Hungarian projects. Long-term failed sale-lease back and capital lease liabilities, associated with the financial leasing payables for rooftop projects in China, were $79.9 million as of September 30, 2018, compared to $85.0 million as of June 30, 2018.
As of September-end 2018, the company had a pipeline of 236 MW of solar photovoltaic (PV) in India. These are self-consumption or open access projects with commercial and industrial off-takers. The projects are spread in the states of Andhra Pradesh, Gujarat, Rajasthan and Maharashtra.
Recently, Renesola signed an exclusivity agreement with an affiliate of Brookfield Asset Management. Under the agreement, ReneSola agreed to negotiate exclusively with Brookfield Asset Management to sell its distributed generation operating solar assets in China.
Image credit: Renesola