Margin pressure would seem to be the only negative force of a weak PV market on Canadian Solar’s financial performance. In the second quarter of 2011, the PV module manufacturer reported increased revenue and shipments that have continued to rise over 2010. Solar module shipments were 287MW, up from 244MW in the first quarter 2011 and 181MW in the second quarter of 2010. Net revenue was US$481.8 million, up 8.7% from US$443.4 million in the first quarter of 2011 and up US46.6% from US$328.7 million in the second quarter of 2010. However, gross margin was 13.2% in the second quarter of 2011, compared to 14.7% in the first quarter of 2011 and 13.6% in the second quarter of 2010.
The solid performance of Canadian Solar has continued from the first quarter, when it was one of the few PV companies that bucked the trend of declining shipments, revenue and margins. The company’s second-quarter results highlight that as a Tier 1 module supplier, it has built its own market momentum from 2010 and into the first half of 2011.
Indeed, Canadian Solar is guiding recognized shipments in the third quarter to be in the range of approximately 350MW to 360MW, perpetuating its sequential growth.
The only factor in its financial performance that is trending with other Tier 1 competitors is gross margin declines, though these are declining relatively slowly, compared to some of its competitors' faster rate of decline.
Canadian Solar guided third-quarter 2011 gross margin to be in the range of 9-12%.
Shawn Qu, chairman/CEO, remarked: “This was a solid quarter for Canadian Solar. We achieved impressive shipment growth due to our strategy of building desired capacity, our track record of quality, performance and service, and our increased brand recognition worldwide. We are confident we can continue to gain market share, based on continued strength in Germany, Italy, and the U.S., along with a rebound in Japan and the benefit of new regions, including India. We have also seen the market in Canada picking up in the past month.
“We accomplished a great deal in the second quarter, highlighted by impressive customer wins and two major strategic capacity joint ventures. Our joint-venture agreements to build a new state-of-the-art 600MW wafer and a new 600MW cell plant in Suzhou, will help push Canadian Solar to the forefront of our industry, with a differentiated product offering, industry leading cost structure and 2GW of virtually-integrated scale to continue our profitable growth in the quarters ahead.”
Canadian Solar noted that its internal cell and module capacities are expected to reach 1,300MW and 2,000MW, respectively, during the third quarter of 2011, with utilization levels at around 90%.
Usage of internally produced cells is expected to be higher in the third quarter of 2011 than in the second quarter of 2011, as the company ramps its new 500MW cell plant in Suzhou.
Canadian Solar reiterated that it was still on track to expand capacity for modules to 2GW by September. The new module capacity includes 200MW of capacity in Guelph, Canada.
For the full-year 2011, Canadian Solar still expects shipments of approximately 1.2GW to 1.3GW.
(A recent interview with Shawn Qu in the PV-Tech Chip Shots blog can be found here.)