Renesola Ltd (LON:SOLA) , the Chinese company that makes solar wafers, returned to profitability during the first quarter with a net profit of $11.8m. Revenue for Q1 2010 was $206.6m and the group shipped a record 242.4 megawatts, up 12.6% on the previous quarter. Shares in the company rose more than 10% to 243p on the news.
The company says it generated strong positive cash flow in Q1 2010 and reduced inventory carrying cost to US$54 per kilogram at the end of Q1 2010 with an average carrying cost of US$60 per kilogram during the quarter. Renesola says that it significantly improved margins in the first quarter due to lower raw material costs and improved manufacturing efficiencies. Further cost reductions are expected during the year.
CEO, Li Xianshou, said: "We had a strong first quarter of 2010, characterized by record solar product shipments and our return to profitability. We believe we are well positioned to capitalize on our cost-competitive leadership position and effective end-to-end manufacturing platform. In addition, we have recently witnessed strong market demand for wafer products resulting in higher wafer ASPs and we expect such momentum to continue throughout 2010."
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