Trina: Sequential declines seen, but YoY figures up; capacity expansion announced

Having shipped around 351 megawatts (MW) of modules in the fourth quarter of 2010, Trina experienced a decline of 8.7 percent in the first quarter of 2011. However, at 320 MW, shipments were up a significant 66.4 percent on the first quarter of last year. The uncertainty surrounding Italy’s solar incentives were cited as the main reason for the sequential decline.

In terms of second quarter photovoltaic shipments, Trina is optimistic, saying that it expects to hit between 430 and 450 MW. For the full year, the company predicts total module shipments to be between 1.75 and 1.80 gigawatts (GW).

It says that to meet expected demand for its modules, it hopes to increase its annualized in-house ingot and wafer production capacity from 750 MW to approximately 1.2 GW, and photovoltaic cell and module production capacity from around 1.6 GW to roughly 1.9 GW in the second half of 2011, based on actual manufacturing yield.

Meanwhile, at USD$550.9 million, the company’s net revenues experienced a sequential decline of 14.2 percent, but saw a year on year increase of 63.5 percent.

Net income suffered a major fall from the fourth quarter of last year, having gone from $145.3 million to $47.7 million. This, says the company was due to a net foreign currency exchange loss of $24.1 million. Net income was slightly up, though, from the $44.5 million seen in the first quarter of last year.

Gross profit, on the other hand, fell 25 percent from the fourth quarter of last year, to hit $151.3 million. This did, however, represent a YoY increase of 45.1 percent. Gross margin experienced both a sequential and YoY loss, meanwhile, having fallen from 30.9 percent and 31.4 percent in the first and fourth quarters of last year to 27.5 percent.

In terms of operating income, Trina achieved $84.5 million. This is down from the $145.1 million achieved in the fourth quarter of 2010, but up from the $76 million in the first quarter of last year. Operating margin took a significant dent, having decreased from 22.6 percent in both the first and fourth quarters of 2010.

"Amidst a challenging macro environment and winter season conditions, we maintained relatively strong shipment volumes in the first quarter," commented Jifan Gao, chairman and CEO of Trina Solar.

He continued: "Despite decreased sequential demand linked to Italy’s solar regulatory revisions, we realized notable market share gains in Germany, the rest of Europe and on a global basis. This included high-profile customer additions in Europe, North America and Asia (…)"

Looking ahead

In addition to its announced capacity expansions in the second quarter of the year, Trina expects its in-house wafer production to be in the mid 20s in percentage terms, while its overall gross margin should be in the low 20s in percentage terms.

Supply agreement

In other news, Trina Solar (Germany) GmbH has signed a 130 MW photovoltaic module agreement with Mohring Energie GmbH for an undisclosed financial sum.

Under the terms, Trina is expected to deliver the modules in the second and third quarters of this year. The modules will reportedly be utilized for several projects, including one of Europe’s largest photovoltaic plant installations in 2011. Initial shipments have already commenced.