The SMSL reported total solar module shipments of 1,870MW, compared to 1,745MW in the second quarter of 2017. Image: Canadian Solar
‘Silicon Module Super League’ (SMSL) member Canadian Solar reported stronger than expected third quarter financial results while revenue of US$1.77 billion to US$1.81 billion for the final quarter of the year.
Canadian Solar took advantage of strong PV module demand in China, Japan and India as well as benefiting from completing its own 281MWp Tranquility 8 utility-scale project in California in the quarter.
Interestingly, the SMSL noted that shipments to “third-party customers in the US were moderate in the third quarter,” given the need to complete the Tranquility 8 project ahead of potential new import duties, due to the US ITC Section 201 trade case.
The SMSL reported total solar module shipments of 1,870MW, compared to 1,745MW in the second quarter of 2017. The company easily surpassed previous third quarter guidance of module shipment being in the range of 1,650MW to 1,700MW.
Solar module shipments recognized in revenue totalled 1,782MW, compared to 1,638MW recognized in revenue in the second quarter of 2017.
Module shipments recognized in revenue in the third quarter included 12.6MW used in its total solutions business, compared to 29.2MW in the second quarter of 2017, indicating the strong demand from third party customers in the quarter.
The SMSL reported net revenue in the third quarter of US$912.2 million, up 31.8% from US$692.4 million in the second quarter of 2017.
Gross profit in the quarter US$159.8 million, compared to US$167.8 million in the second quarter of 2017, while gross margin was 17.5%, compared to 24.2% in the second quarter of 2017.
The company noted that its gross profit in the second quarter included the benefits of two US AD/CVD reversals of US$42.6 million and US$15.0 million. Excluding the reversal benefits, gross margin in the second quarter of 2017, would have been 15.9%.
Dr. Huifeng Chang, Senior Vice President and Chief Financial Officer of Canadian Solar, said, "Our higher-than-expected solar module shipments in the third quarter were driven by strong demand for solar modules from China, the U.S., Japan and India. Our higher gross margin was the result of increased average selling price compared to our previous expectation, better cost controls and manufacturing efficiencies.”
Canadian Solar reported third quarter inventories of US$301.5 million, compared to US$283.2 million as of June 30, 2017. Inventory turnover was 37 days in the third quarter of 2017, compared to 52 days in the second quarter of 2017.
The Company had US$1.15 billion of cash, cash equivalents and restricted cash as of September 30, 2017, compared to US$961.6 million as of June 30, 2017.
PV power plants
Canadian Solar said its portfolio of solar power plants in operation, totalled 1,419.5MWp as of September 30, 2017.
Late-stage utility-scale solar project pipeline was said to be approximately 1,598.9MWp, which included 344.5MWp in Japan, 416MWp in China, 326.4MWp in Brazil, 238MWp in the U.S., 117MWp in Australia, 68MWp in Mexico, 41MW in Chile, 22MWp in the Philippines, 18MWp in Africa and 8MWp in the UK.
The company reported that revenue from the sale of electricity generated by its PV power plants totalled US$9.6 million, compared to US$9.8 million in the second quarter of 2017.
Canadian Solar said it expected total solar module shipments to be in the range of 1,650MW to 1,750MW, including approximately 60MW of shipments to its utility-scale solar power projects.
Total revenue for the fourth quarter of 2017 was said to include revenue from both solar module sales and from its energy business was expected to be in the range of US$1.77 billion to US$1.81 billion.
Gross margin for the fourth quarter of 2017 is expected to be between 10.5% and 12.5%.
Canadian Solar guided full year 2017 module shipments to be in the range of approximately 6.7GW to 6.8GW, compared to previously guided shipments reaching between 6.0GW to 6.5GW.
Full year revenue is expected to be in the range of US$4.05 billion to US$4.09 billion.