Canadian Solar raises full-year revenue and shipment target

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'Silicon Module Super League' (SMSL) member Canadian Solar has reported better-than-expected third-quarter revenue that pushes full-year guidance to US$3.28 billion to US$3.33 billion on the back of expected higher-than-guided module shipments in the range of 4.6GW to 4.9GW.

Based on shipment guidance that closes in on SMSL leader, Trina Solar, Canadian Solar has more than likely secured its ranking as the second largest PV manufacturer in the world for 2015, up from third in 2014.

Canadian Solar reports third quarter 2015 total solar module shipments of 1,198MW, of which 1,150MW were recognised in revenue, compared to 809MW recognised in revenue in the second quarter of 2015.

Solar module shipments recognised in revenue in the third quarter included 110.5MW used in its downstream PV projects business, compared to 90MW in the second quarter of 2015 and 173MW in the third quarter of 2014.

Sales to the Americas represented 52.6% of net revenue, down from 46.6% in the prior year period. Asia represented 41.3% of net revenue in the third quarter, down from 45.5% in the prior year period and sales to Europe and others represented 6.1% of net revenue, compared to 7.9% in the third quarter of 2014.

Canadian Solar reported net revenue of US$849.8 million, compared to US$636.7 million in the second quarter of 2015, while gross margin was 14.9%, compared to 15.2% in the second quarter of 2015. Gross profit was US$126.8 million, compared to US$96.5 million in the prior quarter and US$209.3 million in the third quarter of 2014.  

Income from operations in the third quarter was US$30.9 million, compared to US$32.5 million in the second quarter of 2015, and US$156.1 million in the third quarter of 2014. Operating margin was 3.6%, compared to 5.1% in the prior quarter and 17.1% in the third quarter of 2014.

Michael G. Potter, senior vice president and chief financial officer of Canadian Solar, said: “We were able to deliver a 33.5% increase in net revenue to $849.8 million in the third quarter, compared to the second quarter. Our strategic decision to build inventory levels in the second quarter helped us to seamlessly meet anticipated higher demand levels in the third quarter and has positioned us well entering the fourth quarter. Gross margin of 14.9% was above the high end of our guidance of 12% to 14%, as higher than expected average selling prices for our modules helped offset the lower gross margin from the partial Tranquillity project sale.”

Project pipeline update

Canadian Solar said that its late-stage, utility-scale PV project pipeline totalled approximately 2.5GWp at the end of the quarter, with an estimated resale value exceeding US$5.0 billion and a gross profit contribution of US$850 million. 

In addition to its late-stage pipeline Canadian Solar said its fleet of PV power plants in operation totalled approximately 257MWp, with 99MWp in China, 8 MWp in Canada, 40MWp in the UK, 15MWp in Japan and 17MWp, owned through subsidiary Recurrent Energy, in the US and Spain. 

Sales of electricity in the third quarter reached US$8.6 million, compared to US$7.1 million in the second quarter of 2015. The resale value of the fleet was said to be estimated at over US$500 million.

Guidance and manufacturing capacity plans

Canadian Solar said it expected total module shipments to be in the range of approximately 1,300MW to 1,350MW, including approximately 170MW of shipments to its utility-scale PV projects. 

Total module shipments recognized in revenue were expected to be in the range of approximately 4.15GW to 4.2GW. However, expected total module shipments would be in the range of 4.6GW to 4.9GW, up from previous guidance of 4.0GW to 4.3GW.

The company guided total revenue for the fourth quarter to be in the range of US$930 million to US$980 million, with gross margin expected to be between 13% and 15%.

This would result in total full-year revenue in the range of US$3.28 billion to US$3.33 billion, compared to prior guidance of US$2.8 billion to US$3.0 billion.

As reported earlier by PV Tech, the company also said it would make extensive production capacity increases to meet demand, which would include increasing in-house wafer production from 400MW to 1GW by mid-2016, while solar cell capacity would be expanded from 2.5GW currently to 3.4GW by the end of 2016, a 900MW increase. PV module production would be expanded from 4.33GW expected to be achieved by the end of 2015 to 5.63GW by the end of 2016, a 1GW increase. 

The capital expenditure budget for all of the capacity expansions planned included an estimated US$104.0 million to be spent in the second half of 2015 and a further US$297.0 million allocated to the expansions in 2016, according to the company. More indepth analysis on the major expansions is here.

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