Canadian Solar stockpiles cash and inventory


Module shipments, net revenue and net cash may all be falling quarter-on-quarter, according to today's update from Canadian Solar, but chairman and CEO Shawn Qu insisted the company is in robust health as it hoards cash ahead of an anticipated rise in demand this year.

Cash balances at the Chinese solar manufacturer and developer rose from $679.4 million at the end of last year to a bumper $781 million, thanks in large part to a $255.7 million fundraising in February.

And the destination for those funds will come as little surprise with Qu repeatedly having stressed the importance of driving forward the company's downstream Total Solutions business.

The cash injection will be useful to ‘accelerate development of our solar power project business," said Qu in today's update.

Year-on-year comparatives with a dreadful start to 2013, combined with Canadian Solar's Ryanair-esque approach to managing expectations, ensured the company was able to put a positive spin on negative figures Qu put down to a ‘seasonally slow quarter.'

Shipments fall

Shipments fell to 500 MW in the January-to-March period, from 621 MW in the final quarter of last year, but still came in ahead of the company's 470-490 MW expectations, as the update pointed out.

Similarly, net revenue for the period was ahead of predictions but still fell, from $519.5 million to $466.3 million, for a net cash loss of $153.7 million for the quarter, compared to income of $73.2 million in Q4.

Qu was quick to emphasise shipments for the Total Solutions business rose from 23.4% of revenue to 27.4%.

The problem for the board is that shareholders have shown little desire to swallow the positive spin coming out of the company's head office of late and it remains to be seen what stock market reaction will greet the news gross profits fell to $68.6 million in the first quarter, from $101.3 million at the end of last year.

Qu insists the cash balances accrued and rising level of inventory will bring a windfall when the orders start to flow again, however. Watch this space.

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