The company has additionally raised this years total PV module shipments expectations from between 750 megawatts (MW) to 800 MW to between 900 MW and 930 MW, thus representing an increase of 126 percent to 133 percent from last year. It also expects to expand its annualized cell and module production capacity to reach up to 950 MW by the end of this August. Following a positive second quarter financial result, Trina has also increased its annualized in-house production capacities of ingot and wafer, and its PV cells and modules to approximately 700 MW and 850 MW respectively as of June 30.
Furthermore, it said that in the second quarter of this year, its non-silicon manufacturing cost applicable to its in-house wafer production to module production was approximately USD$0.74 per watt, a sequential reduction of USD$0.02. By the year-end, it expects further reductions to reach approximately USD$0.70 through the continuation of technology and manufacturing process improvements, including supply chain and logistics management initiatives currently under testing or development.
As a result of strong demand for its module products in both European and non-European markets, the company says it should increase its shipment volume in the second half of the year, compared to the first half. Additionally, it expects to increase its percentage of global shipments to the U.S. in the second half of the year.
Q2 financial results
In terms of this years second quarter (Q2) financial results, Trina stated that net revenues were USD$370.8 million, which represents an increase of 10.1 percent sequentially and an increase of 147.2 percent year-over-year. It added that total shipments were 222.8 MW, compared to the company's previous guidance of 200 MW to 205 MW, versus 192.6 MW in Q1 and 63.9 MW in Q2 of last year. The sequential increase in total shipments was primarily due to increased brand recognition for its products in new and established PV markets, said Trina, including the U.S. and Australia, combined with increased demand to install new PV systems ahead of mid-year feed-in tariff adjustments in Germany.
Gross profit in Q2 was USD$118.9 million, compared to USD$104.2 million in Q1 and USD$41.2 million in Q2 of last year. Gross margin was 32.1 percent in Q2, compared to the company's previous guidance of high 20s in percentage terms, which was primarily due to lower average silicon purchase prices. The gross margin was 30.9 percent in Q1 and 27.4 percent in Q2 of last year. Operating expenses in Q2 were USD$35.7 million, an increase of 26.3 percent sequentially and 58.3 percent year-over-year.
Net income was USD$38.7 million in Q2, compared to a net income of USD$44.5 million in tQ1 and USD$18.6 million in Q2 of last year. The net foreign currency exchange loss included in net income was USD$29.2 million, compared to a net foreign currency exchange loss of USD$14.5 million and a net foreign currency exchange gain of USD$10.5 million in Q1 and Q2 of last year, respectively.
"We are very pleased to report another quarter of strong operating results," said Mr. Jifan Gao, chairman and CEO of Trina Solar. "We exceeded our previous guidance through both record shipment volumes, and despite significant Euro currency pressures, a sequential improvement in gross margin ( ) We see increasing evidence that strong demand for our PV products will extend well into 2011, and we are currently looking into how best to manage capacity expansion to capture increasing global market opportunities."
He continued: International collaboration remains a long-term priority for the company. We are pleased to announce our international partnerships with TUV Rheinland, Underwriters Laboratory Inc. ("UL") and China General Certification Centre ("CGC"), which will shorten the time to market for our newest certified products. More recently, we announced a Letter Agreement with Massachusetts Institute of Technology ("MIT") to participate in its Industrial Liaison Program, which promotes university-industry collaboration, innovation and technology sharing."
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