The traumatic state of play elsewhere in the industry is indicated by comments from senior vice president and CFO, Michael Potter, who said the company had successfully run down its inventory by $26.7 million in the three months and planned a further reduction by the end of the year.
"Importantly, because we have managed our inventory and our balance sheet prudently, we are not under the pressure to sell inventory regardless of profitability that we believe some of our competitors are facing," said Potter, who went on to add that Canadian Solar has no plans to expand its manufacturing capacity.
The company shipped 384 MW worth of modules to the end of September, down from 412 MW in Q2, but up from the 355 MW shipped in Q3 2011. The volumes led the company to revise its annual shipment figure down to 1.5 to 1.6 GW from the previously stated 1.8 to 2 GW, with a further 380 to 420 MW expected to be sold by the end of 2012.
Gross profits fell to $7.3 million from a Q2 level of $43.2 million, which was affected by a $14 million adjustment to reflect the benefits associated with a purchase of warranty insurance. However, the profit level was hit by a $2.1 million countervailing charge imposed by the U.S. during the latest three months accounted for.
The company remains upbeat about future orders, having sold a $48.4 million plant to Stonepeak Infrastructure Partners in Q3, as well as finishing the Brockville 1 and William Rutley projects early in Q4 with payment and revenue from the sale to TransCanada Corporation expected in Q1 2013.
With six of another seven TransCanada projects totaling 56 MW sold and expected to be finished in Q2/Q3 next year, Canadian Solar expects $400 million in revenue for eight of the nine TransCanada projects next year and a further $800 million over the next 12 to 14 months after work is finished on 16 projects acquired from the former SkyPower Ltd.
The update also mentioned a turnkey EPC deal for three plants totaling 28.7 MW in Ontario further ahead, as well as 30 MW to 45 MW of Golden Sun projects in China by the end of 2012.
Overall, Canadian Solar continued to diversify markets with a rebound in the percentage of revenues raised from Asia and the rest of the world, up to 27.2% in Q3 from 14.9% in the previous quarter. Sales to Europe fell from 69.4% to 47.9% while sales to North America rose from 15.7% to 24.9%.
Shawn Qu, chairman and CEO of Canadian Solar, said, "Our results for the third quarter were broadly in line with our guidance, despite continued competitive pricing pressure and demand weakness. During the quarter, we continued to strengthen our position as one of the four largest suppliers of photovoltaic modules in the world."