Canadian Solar posts record third-quarter results


Canadian Solar reported record third-quarter results on Wednesday, nearly doubling year-on-year revenue in the period to $914.4 million and almost quadrupling net profit to $104.2 million.

The company’s solar module shipments rose from 478 MW a year ago to 770 MW. Module shipments included 173 MW used in Canadian Solar’s total solutions business, compared to 70 MW in the second quarter of 2014 and 60 MW in the third quarter of 2013.

Canadian Solar Chairman and CEO Shawn Qu said the company was “on-track to deliver the best year in the history of Canadian Solar in terms of revenue and profitability and megawatt shipment." Qu said the group expected global solar demand to continue its growth momentum next year. The chief exec added that the group’s strong cash and balance sheet position, its captive pipeline of late stage utility-scale projects totaling approximately 1.4 GW-DC and its global module sale coverage allowed it to operate with greater visibility and to more efficiently allocate capital and resources to the markets and projects capable of delivering the best returns.

The Americas accounted for the lion’s share of the company’s sales, making up 71.7% of net revenue, while sales to Asia and other markets represented 20.9% and sales to Europe 7.4%. Last year the Americas accounted for 46.9%, Asia and other markets for 43.6% and Europe for 9.5%.

In the United States, the company's late stage, utility-scale solar power project pipeline totaled some 84.1 MW-DC at the end of the third quarter compared to 105.8 MW-DC at the end of the year’s second quarter. From July to September, Canadian Solar completed construction of 21.7 MW-DC of solar projects in the U.S.

In Japan, the group said it was working to increase its utility-scale solar project pipeline to at least 540 MW-DC in the fourth quarter. It currently has one project connected to the grid in Kagoshima Prefecture – the 1.2 MW Shibushichocho plant, which has a 20-year feed-in tariff contract with Kyushu Electric Power of JPY 40 ($0.37) per kilowatt hour. Canadian Solar is also currently building three solar power plants totaling 28.4 MW-DC and has an additional 68 MW-DC that are ready to build and are expected to start construction in the fourth quarter and through 2015.

In China, the company has started construction on several projects totaling approximately 100 MW-DC in the fourth quarter. The group added that it is pursuing several strategic partnerships in China that may lead to significant pipeline growth next year.

In Brazil, Canadian Solar recently won the right to develop three solar power plants totaling 114 MW-DC in the state of Minas Gerais, which it expects to connect to the grid in 2016. The state-run Agencia Nacional de Energia Eletrica will buy the generated electricity under a 20-year power purchase agreement at BRL 216.12 ($84.44) per megawatt hour.

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The company has also identified more than 200 MW of near term opportunities in Europe, Asia, Latin America and Africa, including 40 MW-DC in the United Kingdom.

Pointing to a recent agreement between a Canadian Solar subsidiary and Sichuan Development Investment Management to establish a fund aimed at financing the development and construction of solar projects in China, Qu said the company expected to develop similar partnerships as it seeks to increase its market share in China. "In addition, the expansion of our project pipeline in Japan to 497 MW and our recent 114 MW win in Brazil, give us added confidence in our ability to both replenish and expand our global project pipeline," Qu added.

Capacity expansion plans

In order to meet expected strong growth in module demand, Canadian Solar said it planned to add 500 MW of solar module capacity at its Changshu and Luoyang plants in China, which it expects to come online throughout the first quarter and second quarter of 2015, bringing its total module capacity to 3.5 GW. The group is also building its first 80 MW of high efficiency multi-crystalline cell line in Funing, Jiangsu province expects to further expand the facility to 400 MW by the second quarter of 2015, bringing its total cell capacity to 1.9 GW.

Business outlook

Canadian Solar expects fourth-quarter module shipments of between 810 and 860 MW, revenue ranging from $925 to $975 million, with gross margin expected to be between 17% and 19%. For full year, the company has increased its annual module shipment guidance to the range of 2.73 to 2.78 GW compared to a previous range of 2.5 to 2.7 GW. It has also increased its revenue guidance to approximately $2.93 to $2.98 billion compared to a previous range of $2.7 billion to $2.9 billion.

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