Canadian Solar raises 2022 revenue guidance as module shipments jump

Canadian Solar has raised its 2022 revenue guidance as it progresses with efforts to ramp up its PV manufacturing capacity, following a hike in module shipments in the second quarter.

The company shipped 5,060MW of solar modules during Q2 2022, representing a 37% increase year-on-year, with the top five markets ranked by shipments being China, the US, Spain, Brazil and Germany.

Revenues for the quarter were above prior guidance, increasing 62% year-on-year to US$2.31 billion and driven by higher shipment volumes and average selling prices, solar project sales and growth in the company’s battery storage solutions business.

CSI Solar, the company’s manufacturing division, benefited from higher-than-expected volumes and pricing, according to Yan Zhuang, president at CSI Solar. “Demand from our end markets has been incredibly strong despite the increase in pricing,” he said during a conference call with investors.

Driven by higher module pricing, Canadian Solar has raised its 2022 revenue forecast to US$7.5 – 8 billion, up on previous guidance of US$7 – 7.5 billion.

The company’s Q2 gross margin of 16% was also above its guidance for the quarter and is expected to be 15 – 16% in Q3.

This, said CEO Shawn Qu during the conference call, reflects the positive contribution from the increased level of group integration, including the company’s new ingot, wafer and cell capacities.  

Qu said in a statement that management expects profitability to remain healthy through the second half of the year, driven by continued manufacturing processing cost reductions and lower logistics costs partially offset by higher polysilicon prices.

Canadian Solar earlier this year amended its planned manufacturing capacity targets for the end of 2022, as the company expects to close the year with 20.4GW of ingot capacity, 20GW of wafer capacity, 19.8GW of cell manufacturing output and 32GW of module capacity.

By the end of 2023, the firm aims to have 50GW of module manufacturing capacity.

Qu said the rationale for the company’s capacity expansion plan is a result of a significant acceleration in global demand, driven by catalysts such as clean energy economics, energy security and decarbonisation. “We are particularly excited to see the passing of the Inflation Reduction Act, or IRA, in US. We believe it will drive a significant acceleration in demand for clean energy,” he added.

Canadian Solar earlier this month announced plans to build a polysilicon production facility with an annual capacity of 50,000MT in the Chinese province of Qinghai. Construction work is due to begin later this year, with production slated to commence in 2024.

The company said the facility will help it gain further control over sourcing, technology and its supply chain, as well as reducing the carbon footprint of its supply chain. According to Qu, renewables account for 90% of electricity in Qinghai province.

Conference call transcript from Seeking Alpha.