Canadian Solar holds firm in Q1 with slight profit and revenue increase

Canadian Solar, the Chinese-Canadian Tier-1 solar company, posted shipments and revenue that were both above guidance in the first quarter (Q1) of 2017.

Total solar module shipments reached 1,480 MW, which despite being sequentially down on Q4 016 (from 1,612 MW) represented a better-than-expected performance, beating the guidance range of 1,150 MW to 1,200 MW.

Revenue for the quarter hit $677 million, up from $668.4 million in Q4 2016 and, again, surpassing guidance. The company generated $91.4 million in gross profit for Q1, which was an encouraging increase on 2016’s Q4 performance of $49 million, although year-on-year (YOY) that figure was below the $112.5 million registered in Q1 2016.

Gross margin held steady at 13.5% (against 13-9% in Q4 and 15-6% in Q1 of 2016) thanks to higher manufacturing efficiencies and tighter inventories across Canadian Solar’s various production facilities.

Company CFO and SVP Huifeng Chang said that Canadian Solar is now positioned to benefit from its fabs in “trade-friendly South East Asia” that will allow it to meet U.S. demand.

According to CEO Shawn Qu, the firm’s solid performance was driven by strong demand for its high performance modules in China, Brazil and the U.S., while the successful restoration of six cell production lines damaged by a tornado at the Canadian Solar Funing cell factory has also had a positive impact on the company’s bottom line.

Qu added: “We are well underway in the process to monetize our other operating solar power plants in the U.S., and will soon select the final winner. In Japan, we now have 65 MWp of solar power plants in commercial operation and made progress to launch the JREIT listing.”

Canadian Solar’s Q1 operating expenses were, at $93.7 million, 54.4% higher than in Q4 2016, and YOY up by 26.5%.

As of March 31 2017, Canadian Solar’s portfolio of solar power plants in operation stood at 1,156.5 MWp, with an estimated total resale value of $1.6 billion. Its late stage utility pipeline currently stands at more than 2 GW, of which around 400 MW each is in the U.S., China and Brazil.

Shipment guidance for Q2 is given at between 1,530 and 1,580 MW of modules, of which around 120 MW will be for Canadian Solar’s own downstream projects. According to the firm, there is “overwhelming demand” from China for modules, while European, Japanese and American demand is also described as “healthy”.