Emeren Group Ltd Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Graham Price - Raymond James & Associates, Inc. - Analyst : Hi, good afternoon, and thanks for taking the questions. First one, just on the early-stage pipeline, looks like Spain was revised down by about 1.3 gigawatts versus Q1. Just wondering what the reason was for that.

Question: Graham Price - Raymond James & Associates, Inc. - Analyst : Got it. Understood. Then for my follow-up, I guess, kind of a two-parter on the DSA sales. First one, just looking at the second half forecast of $20 million, I was wondering what the quarterly cadence is there. And then, looking at the contracted versus negotiated, it looks like you've got 2 gigawatts in kind of each bucket, but it looks like contracted is for $60 million versus negotiated $100 million. So was wondering if those -- that are still in negotiation are a bit more involved or later-stage projects. Just wondering why the difference in size there.

Question: Graham Price - Raymond James & Associates, Inc. - Analyst : Got it. Okay. Perfect. That's exactly what I was looking for. Thank you very much. I'll jump back in the queue.

Question: Philip Shen - Roth Capital Partners LLC - Analyst : Hey, all. Thanks for the questions -- for taking the questions. Your implied Q4 revenue ramp is pretty high, about $84 million. And so, wanted to understand how confident you feel in that implied Q4, given you reiterated your full-year revenue number. And so, what's the confidence level? How much conservatism is baked in? And what are the risks that you miss the target? Thanks.

Question: Philip Shen - Roth Capital Partners LLC - Analyst : Great. And deal in Europe that has high revenue, can you share the megawatts, maybe what country it's in?

Question: Philip Shen - Roth Capital Partners LLC - Analyst : Okay. Great. Thanks, Yumin. Shifting over to your $2 million of write-offs of canceled projects, I think you guys had a similar amount on the last quarter, Q1, and wanted to see if we should expect $2 million for this coming Q3, maybe even Q4. How much more is there? And what are the root causes of these canceled projects? Is it like you were saying earlier in terms of Spain, the government is changing some of the situation? Or is it -- like is it more concentrated in US, or Europe, my guess is? So just give us some more color on what to expect ahead for the canceled and write-off projects. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 20, 2024 / 9:00PM, SOL.N - Q2 2024 Emeren Group Ltd Earnings Call

Question: Philip Shen - Roth Capital Partners LLC - Analyst : Got it. Great. Thank you. And then, one last thing. You guys talked about having $100 million of cash by the end of '24 in the past and being positive operating cash flow for the remaining of for the year or at least certain quarters of this year. What's your -- I don't see -- we don't see it in this material for this quarter. Can you share if you think $100 million is reasonable still by year-end '24? Or if not, what's the burn that you expect? And how much cash do you think you could have by year-end? Thanks.

Question: Philip Shen - Roth Capital Partners LLC - Analyst : Great. Appreciate that, Ke. Okay, I'll pass it on.

Question: Amit Dayal - H.C. Wainwright & Co. LLC - Analyst : Thank you. Good afternoon, everyone. So Yumin, with respect to the guidance for the remainder of the year, you're saying you could potentially do $28 million in net income on roughly, let's say, $100 million to -- $110 million to $120 million in sales. I'm just trying to get a sense of what's driving this significant level of profitability for the revenues that you are expecting to recognize in the second half?

Question: Amit Dayal - H.C. Wainwright & Co. LLC - Analyst : Understood. And my question is more on margins. So you feel that the price you will receive for these assets will support these levels of margin expectations that you have for the second half?

Question: Amit Dayal - H.C. Wainwright & Co. LLC - Analyst : Understood. Thank you for that. And related to that again, is any of this dependent on interest rates going lower, any of these deals in the second half? Are folks maybe waiting to pencil these deals once they have clarity on where interest rates will head in the next few months?

Question: Amit Dayal - H.C. Wainwright & Co. LLC - Analyst : Okay. Thank you. Just last one for me with respect to these DSA revenues. Looks like you're getting good traction on that front. Are these DSA revenues, 30% gross margins or higher or lower? Can you give us a sense of what kind of gross margin we should expect from DSA revenues?

Question: Amit Dayal - H.C. Wainwright & Co. LLC - Analyst : Okay. Understood. That's all I have. I will take my other question offline. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 20, 2024 / 9:00PM, SOL.N - Q2 2024 Emeren Group Ltd Earnings Call

Question: Donovan Schafer - Northland Capital Markets - Analyst : Hey, guys. My first question is just for the 1.7 gigawatts of the DSA contracts for BESS in Italy that you have. Is that a subset within the 2 gigawatts of contracted DSA that you have? So does the implication that 85%, 90% of the 2 gigawatts you have signed contracted for DSA, that 85% of that is BESS in Italy? Or are these like different buckets?

Question: Donovan Schafer - Northland Capital Markets - Analyst : Okay, got it. Helpful. Thank you. And then, for, let's see, the write-off, can you clarify just what it was that triggered the write-off? Was it specifically an interconnection delay? Or what was the specific bottleneck or parameter or event that triggered the write-off?

Question: Donovan Schafer - Northland Capital Markets - Analyst : Okay. Got it. And then, if I can squeeze one more in. In the past, you've talked about monetizing 400 megawatts to 500 megawatts this year. Is that -- and I noticed in the letter to shareholders, it says that the priority -- let's see, is -- let's see, you said that your priorities include advancing early stage projects, securing additional DSA partnerships in Europe and US, and maximizing value of development pipeline. So it's not -- does that include monetizing advanced stage? It just seems like advanced-stage projects -- you've got a lot of megawatts in the advanced-stage category. Do you plan on monetizing those? Is that part of -- do you still see 400 megawatts to 500 megawatts monetization of advanced stage?

Question: Donovan Schafer - Northland Capital Markets - Analyst : And is it a priority?

Question: Donovan Schafer - Northland Capital Markets - Analyst : Okay. That's helpful. All right, I'll take the rest of my questions offline. Thanks, guys.

Question: Graham Price - Raymond James & Associates, Inc. - Analyst : Hey, guys. Thanks. I was the first questioner, so you already got to mine. Thanks, though.