Canadian Solar sees turnover and profits retreat

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Chinese-Canadian PV module manufacturer Canadian Solar achieved revenue of US$760 million in the third quarter, down 1% from US$768 million in the same period of 2018 for a company which reports its figures in U.S. dollars

The business’ operating results declined year-on-year, from $95.9 million to $80.1 million and net profit fell 19%, from $68.4 million in the July-to-September period of last year to $55.2 million, announced acting CEO Yan Zhuang. Yan is filling in for Shawn Qu while the latter is on another medical leave of absence. Qu supplied the analysis for the previous quarter but was absent for the reporting of disappointing first-quarter returns this year after reportedly being involved in an accident in May.

“We achieved GAAP [generally accepted accounting principles] net income of $58 million – or $0.96 per diluted share – for the third quarter, even with lower than expected revenue which was primarily due to the delayed closing of solar power plant sales in Japan,” said Canadian Solar chief financial officer Huifeng Chang, commenting on the latest figures.

Trade measure benefit gives uplift

Third-quarter gross margin came in at 26.2%, a slight increase on the 26.1% recorded in the same period of last year. However, “gross margin was 23%, excluding a $24.3 million countervailing duty true-up benefit,” the module maker clarified.

Quarterly shipments beat expectations of 2.2-2.3 GW at 2,387 MW and were much higher than the 1.59 GW sold a year earlier.

Operating expenses rose year-on-year from $105 million to $119 million, while Canadian Solar’s cash position improved from $981 million at the end of June to $1,049 million at the end of September.

The company added, at the end of the third quarter its PV project pipeline, including assets under construction, stood at around 3.4 GW. Of that, 1.28 GW is planned for the U.S. and there are sizable projects planned in Brazil (with 832 MW of generation capacity), Mexico (370 MW) and Japan (344 MW). The developer said it had 796 MW of project capacity in operation at the end of September.

Expansion plans

At the end of the latest quarter, the manufacturer had annual module production capacity of 11.15 GW with 1.85 GW of ingot capacity, 5 GW of wafer production lines and 8.7 GW of cell output capability. By the end of next year, module capacity is expected to reach 15.1 GW, ingot capacity will rise to 2.3 GW and cell output 9.6 GW with the wafer figure to remain unchanged.

Canadian Solar said it expects revenue of $3.13-3.16 billion this year, on the back of 8.4-8.5 GW of shipments. Shipments of 2.3-2.4 GW are expected in the current three-month reporting period and turnover is expected to reach $850-880 million.

“While our near-term revenue is expected to be impacted by the potential shift of certain project sales into 1Q 2020 from 4Q 2019, due to revised sales schedules, we expect sequential growth in solar module shipments based on our backlog and demand forecasts,” said acting CEO Yan.