$45 million Solyndra settlement behind Trina Q3 loss, despite 1.7 GW record shipments

With soaring shipment volumes and strong project growth, Trina joins many major solar module manufacturers in registering a successful Q3. However the presence of a ghost of solar’s past and currency exchange losses has resulted in Trina registering a $20 million loss for the quarters.

Trina set aside $45 million in Q3, for the settlement of an antitrust lawsuit brought by failed U.S. thin film company Solyndra’s trustees. It also sustained a $13.1 million foreign currency exchange loss in the quarter, primarily as a result of RMB depreciation against the U.S. dollar. These two events have resulted in a temporary quarterly loss for Trina.

"We have entered into a settlement with Solyndra to avoid a burdensome and protracted litigation,” said Trina Solar CEO Jifan Gao. “The resolution to the litigation with Solyndra puts this matter behind us and allows us to focus our attention and resources on our business."

In 2012 the Solyndra trustee initiated legal proceedings against Trina, along with Suntech and Yingli. The antitrust lawsuit related to findings of dumping from Chinese manufacturers into the U.S. market, which the Solyndra trustees had argued had damaged the failed thin film manufacturers prospects in the market.

Despite this black spot, Trina recorded a strong Q3, with module shipments reaching 1.7 GW, a record for the company. Module shipments increased 38.3% Q/Q and 60.1% Y/Y. Of these shipments, 350 MW went to Trina’s in-house PV power plant projects.

Trina grid connected 251.9 MW of PV in Q3, including 38.9 MW of distributed generation projects. Margins on Trina’s project development business remain high, with its “build-to-own” projects bringing revenues of $10.2 million in Q3, on a gross margin of 66.9%. Distributed generation projects can be as large as 10 MW in China.

Trina registered revenues of $792.6 million in Q3, up 9.6% Q/Q and 16.7% Y/Y. The company’s gross margins were down slightly in Q3, to 17.4%, compared to 20% in Q2, 2015. Trina reports that this was due to a higher proportion of shipments going to China itself, or to PV markets such as India.

“We shipped a record 1.7 GW of modules, which enables us to achieve a significant milestone of over 15 GW of module shipments cumulatively since our inception,” said CEO Gao, in a statement. “We maintained strong growth momentum in China and the U.S., with record shipments to both markets and continued to execute our strategy to increase our presence in new and emerging markets, such as India and Thailand.” Gao added that emerging PV markets now represent Trina’s third largest shipment destination.

The Trina CEO also pointed to efficiency highlights in Q3. Its p-type multicrystalline R&D cell record of 21.3% was one such bright spot, as was its heterojunction process – with a 22% cell efficiency being achieved.

“In addition, we introduced a ‘Desert Double Glass’ module for hot and dry climates that will be ready for production by the end of the year,” said Gao.

Trina has upped its Q4 shipment forecast from 1.35 GW to 1.45 GW to 1.5 GW to 1.65 GW. It expects to connect between 280 GW and 320 MW in Q4.

On the back of the strong shipment volumes, Trina has raised its 2015 guidance to 5.5 GW to 5.6 GW, up from original guidance of 4.9 to 5.1 GW for 2015. This represents growth of 50.3% to 53% Y/Y.

Trina Solar closed Q3 with $486.1 million in cash and equivalents on borrowings of $1.173 billion, of which $1.0053 billion are short term borrowings.

At the end of Q3, Trina’s capacity stood at 2.3 GW ingot, 1.8 GW wafer, 3.4 GW cell and 4.7 GW module.