Despite sequential drops Trina posts solid first quarter results

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Although Chinese solar giant Trina Solar didn’t hit the dizzying heights it achieved during the fourth quarter of 2015, when the company recorded an all-time high of module shipments, it still had a good opening to 2016, posting revenues and shipments that significantly surpassed the same period last year. It also saw its gross margin slightly reduced both sequentially and year on year, as a result of a drop in selling prices that outpaced the company’s ability to cut its own costs as well a reduction in downstream revenue.

Overall, Trina recorded revenues of $816.9 million during Q1, which is a hefty 23.8% reduction of the $961,881 million it achieved in Q4 2015, but an encouraging jump of 39.2% from the same period in 2015, when it recorded a net revenue of $558,089 million. The revenue was driven by shipments of 1,423.3 MW of modules, which is a 19.9% sequential decrease, but a 38.7% increase year on year. Interestingly, 52.9 MW worth of the module shipments were made to its own downstream projects, which is a reduced number both from Q1 and Q4 2015. Trina Solar has said that the fall in the sequential numbers is primarily a result of “seasonality.”

“This quarter was a good start to the year,” said Trina Solar Chairman and CEO, Jifan Gao. “We posted strong year-over-year growth in major financial and operational metrics, particularly with revenue and net income up 46.4% and 91.3% respectively. Total module shipments during the quarter increased 38.7% year-over-year to 1.42 GW, which was largely driven by demand from our key markets in the U.S., China, and India. Our shipments in Europe were up two-fold sequentially as a result of our strategic shift in Europe.”

Trina posted positive profits of $139.7 million, which, despite a 23.8% decrease from Q4 2015, was a large increase of 39.2% year on year. However, the company’s gross margin was reduced to 17.1% for the quarter, down from 19.1% in Q4 2015 and 18.0% in Q1 2015. The company highlighted lower average selling prices and a drop in downstream revenue for the decrease.

Capacity expansions

To keep ahead of the curve and maintain its position as the largest PV manufacturer in the world, Trina Solar expanded its overseas manufacturing capacity. Two particular projects that were highlighted were in the Netherlands and in Thailand.

“This capacity expansion strategy ensures we retain and grow our competitive position in the PV industry as we focus on improving our profitability,” continued Gao. “In the first quarter, we acquired a cell factory in the Netherlands and also brought our facility in Thailand online as schedules, using our ‘Honey’ state-of-the-art high-efficiency assembly line method.”

Looking forward, Trina expects to make PV module shipments of between 1.50 GW and 1.60 GW during the second quarter of 2016. Although the company now has total grid-connected operating projects close to 1 GW, it only expects 40 MW to 50 MW of the PV modules to be shipped to its own downstream projects during the quarter. Overall, Trina maintains earlier projections that it expects to complete a total of 6.30 GW to 6.55 GW module shipments in 2016.

“We are proud of these achievements attained so far in 2016,” added Gao. “However, we have no plans to rest. We remain focused on improving our products and business along with developing exciting new technologies, as we continue to strategically position Trina Solar for sustainable long term growth.”