First Solar posts strong Q2, sells O&M unit to NovaSource

Another stalwart of the solar industry was able to take the necessary precautions in order to maintain a sense of normalcy during the pandemic, leading to a quarter of increased sales, net cash, and a positive outlook to finish off the year.

First Solar's manufacturing facility in Lake Township, Ohio

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First Solar

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From pv magazine USA

Solar earnings season is in full swing and, just as SunPower did yesterday, First Solar has now given a full look at how the company dealt with the Covid-19 pandemic. And again, like SunPower, First Solar was able to take the crisis head-on and survive for a successful second quarter.

Much of this success was due to the measures the company took to mitigate manufacturing disruptions, which were significantly bolstered by First Solar’s Vietnamese facility. Vietnam has been relatively lucky and successful throughout the pandemic.

Financial highlights from the U.S. solar manufacturer’s first quarter:

  • Net sales of $642 million, up from $532 million in the first quarter
  • Net income per share of $0.35, down from $0.85 per share in the first quarter
  • Net cash of $1.2 billion, up 0.1 billion since the first quarter
  • About 0.8 GW of bookings since prior earnings call, including 0.5 GW of systems bookings, down from 1.1 GW and 0.7 GW in the first quarter
  • Fleet-wide capacity utilization of more than 100% in May, June and July
  • Updated 2020 guidance – more on that later

In reality, the biggest issue that First Solar felt related to the pandemic was the consolidation of shipping routes, which led to some capacity constraints, but not enough to cause any significant disruption.

New guidance

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After withdrawing the initial 2020 guidance in February, First Solar was able to provide an updated outlook, which shows how effectively the company weathered Covid-19.

  • Full-year production projection of 5.9 GW remains unchanged
  • Series 6 manufacturing capacity plans are unchanged
  • Anticipated gross margin improvements in the second half and no expectations to draw on the company’s revolving credit facility

Just before the company’s second-quarter earnings call, First Solar said that it had sold its operations and maintenance (O&M) business for an undisclosed amount to Toronto-based mid-market private equity firm, Clairvest Group, with the business now falling under NovaSource Power Services.

If this news sounds familiar, that’s probably because SunPower did the exact same thing in May.

NovaSource is already an O&M provider in commercial, industrial and utility-scale solar markets. The transaction is part of Clairvest’s continued campaign to build a solar O&M business through a “buy and build” strategy. First Solar noted that Clairvest’s offer was unsolicited.

 

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