Driven by a ramp up in Chinese demand, Trina Solar has been having a good 12 months, which has seen unprecedented growth in its PV operations, as well as a number of technological and expansion breakthroughs. The Chinese firm has now posted its unedited second quarter financial results, which display impressive growth across the board and a very healthy profit margin.
The first figure to show off the companys thriving operations is its Q2 shipments of 1,658 MW of which 1,619 MW are to external customers up from 1,423 MW in the first quarter of the year, and 1,232 MW in the same period last year. The growth was driven by a rise in demand in China, as companies scrambled to get orders in before the change to the countrys solar subsidy policy on 30 June. It follows a sequential decline in Q1 of this year, but that was put down to market seasonality by the company.
We had another solid quarter with major financial and operational metrics improving across the board, commented Trina Solar Chairman and CEO Jifan Gao. Module shipments during the quarter increased on a sequential and year-over-year basis to 1.66 GW. Module shipments were driven mainly by continued demand from China ahead of the expected subsidy policy adjustment.
Alongside the increase in Trinas sales, it is no surprise that the company experienced an increase in revenues, even if the module prices did fall during the quarter. It posted quarterly revenues of $961.6 million, which was a 17.7% sequential increase from $816.9 million in Q1 2016 and a huge 33% increase from $722.9 million in Q2 2015. These figures then translated into a net income of $40.3 million for the company, up from $26.6 million in the first quarter, but down slightly from $40.9 million during the same period the year before.
Overall, Trina posted a second quarter gross profit of $176.3 million and a gross margin of 18.3%. This was an improvement on the Q1 gross margin of 17.1%, but was down on the 20% it posted in Q2 2015. The sequential increase was partially put down to an increase of the companys shipments to the U.S. coming from its facilities in Thailand, thus avoiding the antidumping trade duties. The increase in operating at the facilities in Thailand is helping Trina become competitive in the U.S., while another encouraging aspect of its business is its downstream operations.
Our downstream business performed well in Chinas rapidly growing market as we connected 292.8 MW of utility projects and 28.0 MW of DG projects during the quarter, continued Gao. We also made progress overseas with the sale of 11.2 MW of projects in the U.K. and Italy during the quarter.
Breaking technological ground
The company was also keen to show off the efficiency records that it broke during the quarter. Part of this is to translate the high-efficiency into industrially produced cells, which is coming closer to reality.
" Following the achievement of a 21.1% average efficiency for industrially-produced mono-crystalline cells using passivated emitter rear cell (PERC) technology, our R&D team achieved an average efficiency of 20.2% for industrially-produced P-type multi-crystalline silicon cells with PERC technology, explained Gao. We also achieved an average efficiency of 18.7% for our multi-crystalline silicon P-type double print cells that were produced for commercial shipment.
With all the pieces of the puzzle seemingly in place, the outlook for Trina is looking good. In the report, the company said that it expects to ship between 1.55 GW and 1.65 GW of PV modules in the third quarter, finishing the year on shipments between 6.30 GW and 6.55 GW.
Going forward, we will continue to focus on developing our brand name, products and technology, while identifying opportunities to develop our downstream business, concluded Gao. We believe that our strategy gives us a competitive edge in the industry and provides a solid foundation for our sustainable and long term development.