Japan accounts for 24.5% of Canadian Solar’s Q1 total shipments

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Updated: Canadian Solar has reported that the hot Japanese market accounted for 24.5% of shipments in the first quarter of 2013, a 75.9% increase from the previous quarter.

The company reported net revenue of US$263.6 million, compared to US$294.8 million in the fourth quarter of 2012, a 10.6% decrease, primarily due to seasonal factors. However, revenue derived from its total solutions business, which covers PV projects represented 19.2% of total revenue (23MW), compared to 12.8% in the fourth quarter of 2012.

Overall shipments reached 340MW, compared to 404MW in the fourth quarter of 2012 and in line with updated shipment guidance made in early May.

On a regional basis, Europe accounted for 24.7% of net revenue, down from 40.6% in the fourth quarter of 2012.

North America represented 17.9% of net revenue, down from 20.0% in the previous quarter, while sales to Asia represented 57.4% of net revenue, up from 39.4% in the fourth quarter of 2012.

Canadian Solar reported a gross profit of US$25.6 million, compared to US$14.9 million in the fourth quarter of 2012 and US$25.1 million in the first quarter of 2012.  Gross margin in the first quarter of 2013 was 9.7%, compared to 5.0% in the fourth quarter of 2012 and 7.7% in the first quarter of 2012.

The company reported an operating margin of 6.8% in the first quarter of 2013, compared to negative 31.0% in the fourth quarter of 2012 and negative 4.1% in the first quarter of 2012. 

Significantly improved financial performance meant that Canadian Solar reported a net loss of only US$4.4 million, compared to net loss of $105.0 million in the fourth quarter of 2012.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar said: “We are pleased with our first quarter results and our progress in the execution of our strategy. Our shipments of 340MW exceeded our initial guidance of 290MW to 310MW, while gross margin came in at the high end of our guidance. During the quarter, we also continued the successful transformation of our business model from a leading module supplier into a leading solar power solutions company with a solid and growing utility-scale project pipeline in Canada, the US, China and Japan, as well as a profitable and growing residential solar system kits business in Japan.”

The company guided second quarter module shipments to be in the range of approximately 380MW to 420MW.  Gross margin for the quarter was expected to be between 9% and 11%.

For the full year 2013, Canadian Solar expects module shipments to be in the range of approximately 1.6GW to 1.8GW.

Update 1

Project pipeline

Management said in a conference call to discuss first quarter 2013 financial results that its PV project pipeline at the end of the quarter stood at a total of 780MW (DC). Buyers had been secured for all of the projects in Canada, which were reported to total 400MW.

Two projects in Canada were completed and connected to the grid in the first quarter and were currently going through acceptance tests before being sold. A third plant in the country would be completed in the next few weeks. None of the three projects expected revenue gain were guided in Canadian Solar’s second quarter guidance, according to management.

The project pipeline in the US stood at 250MW at the end of the first quarter, while project pipeline in Japan stood at 125MW.


Dr. Qu noted in the call that he expected the company to return to full-year profitability in 2013 and expected to be one of the first major companies to do so. 

EU anti dumping duty avoidance 

Following the registration of Chinese PV product shipments into the EU since the beginning of March, 2013, Canadian Solar said that it was supply modules into the EU from its module assembly plant in Canada.
Management also noted that only a limited amount of modules from its Canadian plant were actually shipped to the EU in the first quarter. The company guided that it would only ship between 30MW to 40MW to the EU from its plant in Canada in the second quarter or around 10% of expected shipments, which were primarily allocated to key customers only.

Solar cells used in modules destined for the EU from Canada were sourced in Taiwan with a US$0.05/W higher cost impact. Module costs in Canada compared to China were said to be more than US$0.20/W higher, although this would decline to around US$0.15/W by year end.

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