UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

  

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of June 2023
Commission File Number: 001-33911

 

 

EMEREN GROUP LTD

(Translation of registrant’s name into English)

 

 

100 First Stamford Place, Suite 302

Stamford CT 06902

U.S.A

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  x          Form 40-F  ¨

 

 

Exhibit Index

 

 

Exhibit		Description
99.1		Press Release

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: June 1, 2023

  

	Emeren GROUP LTD
	By:	/s/ Ke Chen
	Name:	Ke Chen
	Title:	Chief Financial Officer

 

 

Exhibit 99.1

 

 

 

May 31, 2023

 

Fellow Shareholders,

 

We closed Q1 with revenue of $12.9 million, gross margin of 12.4% and EBITDA of $1.8 million. Our Q1 revenue reflected solid contribution from our IPP and EPC business, driven partially by our recent acquisitions. However, delays in receipt of final approvals and more conservative judgement in change of control in our RTB project sales business resulted in no revenue recognition during Q1 2023. Following the quarter end, in May, we completed the sale of 58 MW solar farm projects in Poland, located in Voivodship Pomorskie and this will be recognized in our Q2 results.

 

Looking forward, under a more conservative judgement in change of control, we expect to recognize revenue for RTB project sales starting from Q2 and more in the second half due to the timing of expected final approvals of pending project sales. As such, we expect our Q2 revenue to be approximately $38 million - $40 million and gross margin to be 32% to 35%.

 

Our second half results will be driven by the expected closures of over 300 MW of project sales in Europe and U.S. For the full year, we continue to expect revenue to be in the range of $154 million - $174 million. We expect gross margin to be approximately 30% and net income to be between $22 million to $26 million.

 

Notwithstanding these near-term delays, our project development business remains very strong fundamentally. We continue to see strong demand for solar projects globally. We entered 2023 with 3 GWs of high quality mid-to-late stage pipeline and we continue to anticipate to monetize approximately 500 MW of projects in 2023 and we are targeting to grow this pipeline to 4 GW by the end of 2023. Beyond 2023, we are targeting to monetize a minimum 500 MW – 600 MW a year.

 

In China, we continue to make progress in our realignment strategy to the rest of the world as “Develop – Build – Own or Sell”, compared to the original strategy of “Develop – Build – Own as IPP”. In conjunction, we are refocusing our efforts to five coastal provinces that have the most favorable power prices supported by a strong economy and regulatory environment. We anticipate selling all our solar assets outside of these five provinces and some in these five focused markets, which will help strengthen our balance sheet.

 

Further, during the quarter, we continued the development of our storage pipeline and have started the monetization process of some storage projects in Europe.

 

In conclusion, we continue to be excited about our revenue growth this year and beyond driven by our strong project pipeline. We continue to be well positioned in the world's fastest growing solar markets that are benefiting from increasing demand for clean energy, higher PPA prices, and supportive government policies. The future of solar energy is extremely promising, and we are positioned to fully capitalize on the accelerating adoption of solar technology across the globe. With our exceptional expertise in developing and operating solar projects, extensive network of industry partnerships, and strong financial position, we are making great strides towards our goal of becoming a top global solar company. We are thrilled about the bright future of solar energy and are excited to be at the forefront of this incredible transformation towards a more sustainable future.

 

With that overview, we will now review the details of our first quarter operating and financial performance.

 

 

 

 

Q1 2023 Financial Highlights:

 

●	Revenue of $12.9 million nearly tripled y/y and decreased by $12.8 million q/q
●	Gross margin of 12.4%
●	EBITDA was $1.8 million, down 13% q/q and higher than negative $0.05 million in Q1 2022
●	Net loss was $0.2 million, down by 89% q/q and down by 88% y/y

 

in $ million		Q1'23				Q4'22				Q/Q Change				Q1'22				Y/Y Change
Revenue			12.9				25.7				-50	%			3.5				266	%
Gross profit			1.6				6.0				-73	%			1.1				40	%
Operating loss			(3.0	)			(1.2	)			149	%			(2.2	)			35	%
EBITDA			1.8				2.1				-13	%			(0.05	)			3846	%
Net loss  attributed to Emeren Group Ltd			(0.2	)			(1.7	)			-89	%			(1.7	)			-88	%

 

Revenue by segment:

 

Segment ($ in thousands)		Q1’23 Revenue				% of Total Revenue
Project Development			-				-
IPP			4,882				38	%
EPC			7,895				61	%
Others			99				1	%
Total			12,876				100	%

“Others” refers to operations and maintenance.

 

Revenue by region:

 

Region ($ in thousands)		Q1’23 Revenue				% of Total Revenue
Europe			9,443				73	%
North America			203				2	%
China			3,230				25	%
Total			12,876				100	%

 

Mid-to-Late Stage Solar Project Pipeline

 

During the first quarter, we continued to increase our mid-to-late stage pipeline to 3.3 GW. For 2023, we are targeting 4 GWs by the end of the year with a significant portion of the growth coming from Europe.

 

The following table details our Mid-to-Late Stage Project Pipeline by Region (as of March 31, 2023):

 

Mid-to-late Stage Project Pipeline (MW)
Europe			2,272
U.S.			863
China			142
Total			3,277

 

 

 

 

Mid-to-Late Stage Project Pipeline by Country (as of March 31, 2023):

 

Country		Total MW				Expected Sale/IPP				Business Model
Poland			759				2023-2025			RTB/COD Sale and IPP
Hungary			102				2023			RTB/COD Sale
U.K.			174				2024-2026			RTB Sale and IPP
Spain			140				2023-2025			RTB Sale and IPP
Germany			117				2024-2026			RTB Sale
France			158				2023-2026			RTB Sale
Italy			822				2023-2026			RTB Sale and IPP
U.S.			863				2023-2026			NTP Sale and IPP
China			142				2023-2024			COD Sale and IPP

 

Storage Pipeline

 

We also have a storage pipeline of 6.2 GWh in the U.S., Europe, and China at different development stages as of March 31, 2023. Specifically in China, we added 40 MWh commercial scale storage pipeline in the first quarter.

 

Storage Pipeline (MWh)
U.S.			4,381
Europe			1,737
China			40
Total			6,158

 

Growing IPP Asset Portfolio in Attractive PPA Regions

 

In line with our strategic expansion strategy, we are actively involved in developing independent power producer (IPP) projects. Furthermore, we are actively seeking M&A opportunities throughout Europe to capitalize on the advantageous market conditions, such as the increased prices of solar power purchase agreements (PPAs) and the favorable regulatory landscape. We currently own and operate 258 MW of IPP projects, of which ~60 MW is in Europe, ~24 MW in U.S. and ~174 MW in China. In Q1 2023, we added a 5.5 MW IPP assets in China.

 

Operating Assets		Capacity (MW)
Europe		60
U.S.		24
China DG		174
Total		258

 

Q1 2023 Financial Results:

 

All figures refer to the first quarter of 2023, unless stated otherwise.

 

Revenue

 

The revenue of $12.9 million nearly tripled compared to the previous year and decreased by $12.8 million compared to the previous quarter. The sequential decrease in revenue was primarily due to the zero NTP revenue in Q1, as well as lower revenue from EPC and IPP resulting from seasonal factors.

 

 

 

 

Gross Profit and Gross Margin

 

Gross profit was $1.6 million and gross margin was 12.4%, down from $6.0 million in Q4 2022 and up from $1.1 million in Q1 2022. The lower sequential gross margin was mainly due to more low-margin EPC service recognized in Q1.

 

Operating Expense

 

Operating expenses were $4.6 million, down from $7.2 million in Q4 2022 and up from $3.4 million in Q1 2022. The sequentially lower operating expenses were mainly attributable to lower G&A expenses, primarily due to a one-time expense incurred in Q4 2022 related to the acquisition costs of Emeren Italy, changing auditor and other one-time costs related to rebranding.

 

Net loss attributable to Emeren Group Ltd’s common shareholders

 

Net loss attributed to Emeren Group Ltd common shareholders was $0.2 million, compared to $1.7 million in Q4 2022 and $1.7 million in Q1 2022. Net loss attributable to Emeren Group Ltd common shareholders per ADS was $0.00, compared to $0.03 in Q4 2022 and $0.03 in Q1 2022.

 

Cash Flow

 

Cash used in operating activities was $23.7 million which was mainly for the continuous development of Poland and Hungary COD projects; cash used in investing activities was $1.9 million, and cash used in financing activities was $16.2 million.

 

Financial Position

 

Cash and cash equivalents at the end of Q1 2023 were $66.7 million compared to $107.1 million at the end of 2022. The decrease was primarily due to a higher cash used in operating activities as well as finance activities of $16.2 million for shares buyback and finance lease loan payment.

 

Net asset value (NAV) is approximately $5.85 per ADS.

 

Our debt-to-asset ratio at the end of Q1 2023 was 11.29% compared to 11.11% at end of 2022.

 

Shares Buyback

 

We purchased $13.2 million of our common shares during the quarter and plan to continue to execute on the share buyback program, which has $17 million remaining.

 

Conclusion

 

We believe broad social and governmental support for renewable energy will create a robust environment supporting the growth of solar projects, which in turn should drive exciting growth for us in the quarters ahead. Our strategy is sound, and our track record of execution is strong. We have never been more excited about the future.

 

We would like to thank our employees for their hard work and dedication. We also want to thank our customers, partners and shareholders for your continued support and confidence in Emeren Group Ltd.

 

Sincerely,

 

Yumin Liu		Ke Chen
Chief Executive Officer		Chief Financial Officer

 

 

 

 

First Quarter 2023 Earnings Results Conference Call

 

We will host a conference call today to discuss our first quarter 2023 business and financial results. The call is scheduled to begin at 5:00 p.m. U.S. Eastern Time on Wednesday, May 31, 2023.

 

Please register in advance to join the conference call using the link provided below and dial in 10 minutes before the call is scheduled to begin. Conference call access information will be provided upon registration.

 

Participant Online Registration:  

https://register.vevent.com/register/BId591b19e06ce430c8013887637b005f4

 

Audio-only Webcast:

https://edge.media-server.com/mmc/p/upr9x999

 

Additionally, an archived webcast of the conference call will be available on the Investor Relations section of Emeren Group Ltd's website at https://ir.emeren.com/.

 

Safe Harbor Statement

 

This press release contains statements that constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Whenever you read a statement that is not simply a statement of historical fact (such as when the Company describes what it "believes," "plans," "expects" or "anticipates" will occur, what "will" or "could" happen, and other similar statements), you must remember that the Company's expectations may not be correct, even though it believes that they are reasonable. Furthermore, the forward-looking statements are mainly related to the Company's continuing operations and you may not be able to compare such information with the Company's past performance or results. The Company does not guarantee that the forward-looking statements will happen as described or that they will happen at all. Further information regarding risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements is included in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's annual report on Form 20-F. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation, beyond that required by law, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, even though the Company's situation may change in the future. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

 

For investor and media inquiries, please contact:

Emeren Group Ltd

Adam Krop

IR.USA@emeren.com

IR@emeren.com

 

Holly Ross

Holly.ross@emeren.com

 

The Blueshirt Group

Gary Dvorchak

+1 (323) 240-5796

gary@blueshirtgroup.com

 

 

 

 

Appendix 1: Unaudited Consolidated Statement of Operations

 

		Three Months Ended
		Mar 31, 2023				Dec 31, 2022				Mar 31, 2022
		(in thousands, except per ADS data and ADS)
Net revenues		$	12,876			$	25,667			$	3,514
Cost of revenues			(11,283	)			(19,677	)			(2,373	)
Gross profit			1,593				5,990				1,141
Operating expenses
Sales and marketing			(92	)			(418	)			(3	)
General and administrative			(4,396	)			(6,623	)			(3,107	)
Other operating expenses			(108	)			(155	)			(250	)
Total operating expenses			(4,596	)			(7,196	)			(3,360	)
Loss from operations			(3,003	)			(1,206	)			(2,219	)
Other (expenses)/income:
Interest expenses, net			(133	)			(808	)			(351	)
Investment income			77				46				714
Foreign exchange gains /(loss)			2,708				1,217				(85	)
Total other income, net			2,652				455				278
Loss before income tax			(351	)			(751	)			(1,941	)
Income tax expense			(264	)			(1,290	)			(107	)
Net loss			(615	)			(2,041	)			(2,048	)
Less: Net loss attributed to non-controlling interests			(421	)			(329	)			(363	)
Net loss attributed to Emeren Group Ltd		$	(194	)		$	(1,712	)		$	(1,685	)
Loss attributed to Emeren Group Ltd per ADS
Basic		$	(0.00	)		$	(0.03	)		$	(0.03	)
Diluted		$	(0.00	)		$	(0.03	)		$	(0.03	)
Weighted average number of ADS used in computing loss per ADS*
Basic			57,409,673				60,274,841				66,918,272
Diluted			57,409,673				60,274,841				66,918,272

 

*Each American depositary shares (ADS) represents 10 common shares                        

 

 

 

 

Appendix 2: Unaudited Consolidated Balance Sheet

 

		Mar 31, 2023				Dec 31, 2022
		(in thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	66,729			$	107,105
Restricted cash			8				183
Accounts receivable trade, net			20,048				21,670
Accounts receivable unbilled			51,903				43,882
Advances to suppliers			625				1,017
Value added tax receivable			7,142				5,929
Prepaid expenses and other current assets, net			17,535				14,973
Project assets current			36,711				25,969
Investments in U.S. Treasury Bills			9,992				-
Total current assets			210,693				220,728
Property, plant and equipment, net			172,682				170,477
Project assets non-current			31,723				26,590
Goodwill			1,023				1,023
Long-term investments in U.S. Treasury Bills			-				10,047
Operating lease right-of-use assets			22,350				22,688
Finance lease right-of-use assets			21,504				21,669
Other non-current assets			21,751				20,628
Total assets		$	481,726			$	493,850
Current liabilities:
Short-term borrowings			1,487				1,008
Accounts payable			5,911				7,118
Advances from customers			2,885				3,641
Amounts due to related parties			2,171				1,475
Other current liabilities			20,120				17,449
Income tax payable			914				862
Salaries payable			550				540
Operating lease liabilities current			1,227				1,212
Failed sale-lease back and finance lease liabilities current			8,401				9,993
Total current liabilities			43,666				43,298
Long-term borrowings			22,024				22,518
Deferred tax liabilities, non-current			3,559				3,573
Operating lease liabilities non-current			20,500				20,855
Failed sale-lease back and finance lease liabilities non-current			15,341				14,963
Total liabilities		$	105,090			$	105,207
Shareholders' equity
Common shares			806,283				806,283
Additional paid-in capital			13,941				13,500
Treasury stock			(33,200	)			(20,000	)
Accumulated deficit			(437,571	)			(437,377	)
Accumulated other comprehensive loss			(13,764	)			(15,114	)
Total equity attributed to Emeren Group Ltd		$	335,689			$	347,292
Noncontrolling interest			40,947				41,351
Total  shareholders' equity			376,636				388,643
Total liabilities and shareholders' equity		$	481,726			$	493,850

 

 

 

 

Appendix 3: Unaudited Consolidated Statement of Cash Flow

 

		Three Months Ended
		Mar 31, 2023				Dec 31, 2022				Mar 31, 2022
		(in thousands)
Net cash used in operating activities		$	(23,728	)		$	(7,787	)		$	(14,671	)
Net cash used in investing activities			(1,866	)			(613	)			(13,251	)
Net cash used in financing activities			(16,150	)			(5,179	)			(4,382	)
Effect of exchange rate changes			1,193				(2,125	)			830
Net decrease in cash and cash equivalents and restricted cash			(40,551	)			(15,704	)			(31,474	)
Cash and cash equivalents and restricted cash, beginning of the period			107,288				122,992				254,382
Cash and cash equivalents and restricted cash, end of the period		$	66,737			$	107,288			$	222,908