Canadian Solar reports record quarterly revenue but downgrades 2021 shipment guidance

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Manufacturing underway at Canadian Solar’s facility in Vietnam. Image: Canadian Solar.

Canadian Solar reported record quarterly revenue in Q2 2021, buoyed by a return to profit from its manufacturing division, but reduced its total shipment guidance for the year amidst continued industry headwinds.

The ‘Solar Module Super League’ (SMSL) manufacturer today reported second quarter shipments of 3.7GW, towards the top end of its quarterly guidance, contributing towards surging revenue of US$1.43 billion, more than double revenue recorded in the corresponding period a year ago and up 31% sequentially.

Improvements in the company’s margin – at 12.9% for Q2, this was ahead of guidance – helped return its manufacturing division CSI Solar to profit, posting a profit of US$15 million after incurring a Q1 2021 loss of US$52.7 million.

But the swing was not enough to see CSI Solar return to the green for the half-year. Factoring in Q1 loss, CSI Solar reported a US$37.7 million loss in H1 2021, having reported a profit of US$162 million in H1 2020.

Yan Zhuang, president of CSI Solar, said that while polysilicon and freight costs remain high, CSI has raised module pricing, prioritised margins and maximised capacity utilisation, while also taking cost control measures, in order to optimise the division’s fiscal performance.

“While we anticipate and respond to short-term market fluctuations, our long-term growth strategy remains unchanged. That is, to grow market share through capacity expansion, improve pricing power through technology differentiation and optimised channel structure, and gain more control over our supply chain through upstream positioning,” Zhuang said.

As a result of the change in focus, CSI Solar has reduced its guidance for total module shipments from the 18 – 20GW range previously stated to between 16 – 17GW.

CSI Solar has also tweaked its capacity expansion plans for the rest of the year, more detail on which is to be covered shortly on PV Tech Premium.

Revenue from Canadian Solar’s global energy segment, which includes its utility-scale project development arm, has meanwhile increased its revenue, reporting quarterly revenue of US$280.6 million, up more than eight-fold year-on-year.

While the division made a net loss of US$3.9 million in the quarter, the company’s solar and energy storage pipelines have swelled to 22GW and 19GWh respectively. 6GW and 2.3GWh of those respective pipelines are contracted or under construction.

Ismael Guerrero, corporate VP and president of Canadian Solar Global Energy, said that the division had recently been able to offset the impact of higher equipment costs by negotiating higher-priced power purchase agreements, however the results illustrate a fall in both the gross and operating margins of the division, which slumped to 4.2% and -1.4% respectively.

Combined, total gross profit for Canadian Solar in Q2 2021 stood at US$184 million, with total income from operation standing at US$26.4 million.

Canadian Solar has provided Q3 2021 guidance for shipments to fall between 3.8 – 4GW, equating to revenues of US$1.2 – 1.4 billion. But the company also expects a stronger margin than previous quarters of between 14 – 16%.

The SMSL manufacturer is meanwhile reiterating its full year revenue guidance for 2021/22 of US$5.6 – 6 billion, also maintaining its project sales guidance of 1.8 – 2.3GW and battery storage shipment guidance of 810MWh – 860MWh.

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