Emeren(SOL) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $3.5 million, in line with guidance, driven by IPP assets in China and the U.S. [6][14] - Gross margin was 32.5%, higher than the full-year guidance range of 20% to 25% [14] - Adjusted EBITDA for the quarter was $0.6 million [6] - GAAP net loss in Q1 2022 was $1.7 million, with a net loss per ADS of $0.03 [15] - Cash balance was $223 million, slightly lower than the end of Q4 2021 [16] Business Line Data and Key Metrics Changes - The company sold a 24 megawatt solar project in the UK, recorded as investor income of $0.7 million [14] - Operating expenses in Q1 were $3.4 million, down from $8.7 million in Q4 2021 [15] Market Data and Key Metrics Changes - In Europe, PPA prices for solar increased by 27.5% year-over-year due to rising energy prices from the Ukraine conflict [10] - In the U.S., solar installations increased 11% year-over-year, but utility-scale installations slowed due to supply chain challenges [11][12] - In China, COVID lockdowns in April and May impacted economic activities and supply chains, affecting project targets [12] Company Strategy and Development Direction - The company aims to grow its mid to late-stage pipeline to 5 gigawatts by the end of 2024, with significant growth expected from Europe [13] - The company is benefiting from favorable policies in Europe aimed at accelerating renewable energy growth [8][9] - The company plans to focus on small to medium-sized utility-scale and community solar projects in the U.S. [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue ramp-up towards the end of the year, driven by a strong project pipeline [7] - The company anticipates challenges in the U.S. and China due to supply chain disruptions but remains optimistic about long-term trends in renewable energy [12] - Management expects to achieve a minimum of 30% growth in both top and bottom lines for 2023 [28] Other Important Information - The company has completed the repurchase of $20 million of ADS shares, with $30 million remaining [17] - The company is selectively pursuing projects in China based on profitability criteria [44] Q&A Session Summary Question: Guidance on revenue distribution between Q3 and Q4 - Management indicated that most sales will occur in Q4, with an estimated $20 million in Q3 and the remainder in Q4 [21] Question: Risks of project delays - Management expressed high confidence in closing deals based on current plans and milestones, despite potential pandemic-related delays [23] Question: Growth expectations for 2023 - Management expects strong growth from both the product pipeline and bottom line, targeting a minimum of 30% growth [28] Question: Demand in Poland post-Russian gas supply loss - Management confirmed strong demand in Poland, which constitutes about 30% of the pipeline [32] Question: Impact of tariff waivers on guidance - Management noted that while there may not be immediate changes to guidance, the certainty around tariffs will help with bids [41]