Trina boosts sales, profit in third quarter

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Trina Solar continued an overall strong performance in the third quarter of the year, boosting sales and profit amidst increasing shipments.

Trina on Monday posted a 12.5% year-on-year increase in third-quarter revenue to $616.8 million and a 7% hike in net profit to $10.6 million.

The group’s total shipments in the period climbed to 1,063.8 MW, including 936.8 MW of external shipments and 127 MW to the company’s own downstream power projects, compared to total shipments of 774.6 MW a year ago.

Trina Chairman and CEO Jifan Gao said both the company’s module and downstream project businesses delivered "good results" in the third quarter of 2014, demonstrating consistent revenue and profit growth in its core businesses. "Despite foreign exchange fluctuations and weaker demand in Europe, we continue to meet or exceed our financial and performance targets,” Gao added.

The chief exec pointed out that gross margin in particular – which reached 16.7% compared to 15.4% in the second quarter of 2014 and 15.2% in last year’s third quarter, “significantly exceeded management guidance. In the third quarter, we strengthened the competitive advantages of our module business with our efforts to reduce module manufacturing costs and our emphasis on technology breakthroughs generating positive results. We continue to leverage the synergies between our module and downstream business units and expect the resulting positive momentum to continue through the rest of this year and into next year."

Gao said the profitability of Trina’s core business grew in the third quarter, with operating income increased 127% from the previous quarter to $35.6 million, largely driven by growing demand from Japan and China. He added that the group’s strategy to expand and diversify its geographic markets continued to deliver good results: Sales in new and emerging markets represented almost 15% of total shipments, demonstrating its success in expanding into more countries and regions.

Project development

In China, Trina announced in September the acquisition of a 90% stake in Yunnan Metallurgical New Energy, based in China’s Yunnan province, to support development of solar projects in that region. Yunnan Metallurgical currently has a 300 MW project under development in the region. Once operational, it is expected to be the largest single utility-scale solar power plant in Yunnan and one of the largest in China. In Jiangsu province, Trina completed the construction of a 120 MW utility-scale solar plant in the third quarter and expects the plant to connect to the grid by the end of the year or in early 2015. It also signed an agreement with the Yumen municipal government in Gansu province to develop 100 MW of solar projects, including distributed generation installations.

On the international front, Trina sold a 10.6 MW power plant in the U.K. during the quarter that was connected to the grid March. It also expects to sell a 13.8 MW U.K. project in the fourth quarter of 2014 or early in the first quarter of 2015. In addition, the company expects to complete a 49.9 MW utility-scale power project in the U.K. by the end of 2014 and connect it to the grid early next year.

In Jordan, Trina signed an agreement with Shamsuna Power Company to design, construct, operate and maintain the 10 MW Shamsuna Solar Project in Aqaba.

Looking forward, the company expects to ship between 1,045 MW and 1,095 MW of PV modules, of which 40 MW to 60 MW will go to its own downstream projects. Trina expects a fourth-quarter gross margin of between 14.5% and 15.5%.

The company lowered its 2014 guidance of total PV module shipments to between 3.61 GW and 3.66 GW, of which 340 MW to 360 MW will go to its own downstream projects, from the original guidance of between 3.6 GW and 3.8 GW, including 400 MW to 500 MW for downstream projects. Trina expects to complete between 330 MW and 360 MW of downstream projects by the end of 2014, compared to its original guidance of 400 MW to 500 MW projects. The company said it lowered its guidance following cancellation of a 130 MW solar farm project in Inner Mongolia after conducting an analysis on the project’s return.