The company said that it may consider selling more plant assets in 2016, which could boost full-year revenue above current revised guidance.
Updated: ‘Silicon Module Super League’ (SMSL) member Canadian Solar has raised its full-year revenue guidance as it plans to sell a number of existing PV power plants on its balance sheet.
The company said revenue for 2016 was expected to be in the range of US$3 billion to US$3.2 billion up from US$2.9 billion to US3.1 billion. The PV power plants were expected to be sold in the second-half of 2016.
Canadian Solar noted hat its fleet of solar power plants in operation totalled 437.5MWp, with an estimated resale value of approximately US$950 million and gross margin contribution in excess of 20.0%.
However, Canadian Solar noted that it remained flexible in the ways to monetise its solar power plant portfolio, which previously included a planned yieldco IPO. The company said that it may consider selling more plant assets in 2016, which could boost full-year revenue above current revised guidance.
Canadian Solar noted that revenue in 2016 could reach between US$200 million to US$400 million higher, resulting in total revenue for the year reaching US$3.2 billion to US$3.6 billion.
Canadian Solar reported key first quarter 2016 financial metrics and shipments above guidance.
Total solar module shipments were 1,198MW, of which 1,172MW were recognized in revenue, compared to 1,398MW recognized in revenue in the fourth quarter of 2015. The company had guided first quarter shipment guidance in the range of 1,085MW to 1,135MW.
Canadian solar reported first quarter revenue of US$721.4 million, compared to US$1,120.3 million in the fourth quarter of 2015, and first quarter guidance in the range of US$645 million to US$695 million.
Net revenue from the total solutions business as a percentage of total net revenue was 6.3%, compared to 30.7% in the fourth quarter of 2015, due to project retentions on the balance sheet.
The company reported a first quarter gross margin of 15.6%, compared to 17.9% in the fourth quarter of 2015, and first quarter guidance in the range of 12.0% to 14.0%.
Gross profit in the first quarter was US$112.5 million, compared US$200.5 million in the fourth quarter of 2015 and US$153.0 million in the first quarter of 2015.
On a geographical basis, sales to the Americas represented 43.1% of net revenue, sales to Asia represented 44.4% and sales to Europe and others represented 12.5% of net revenue.
Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked: "Our results for the first quarter came in above guidance, driven by robust demand in our solar module business. The results do not include the benefit of any solar project sales in the quarter, however, in the future we will continue our balanced approach of project retention and project sales to maximize both flexibility and valuation, as well as to balance our cash flow. We now have approximately 438 MWp of solar power plants in operation, with a resale value estimated to be approximately $950 million. The company does plan to sell some of these assets in the second half of this year, at the same time as we bring additional solar power plants into operation. Our steady, longer-term approach has positioned Canadian Solar for sustained success and has set Canadian Solar apart from competitors.”
Project pipeline update
Canadian Solar said that its project pipeline totalled 13.5 GWp, including approximately 2.1GWp of projects in late-stage development, and 11.4GWp in early- to mid-stage development at the end of quarter.
Late-stage, utility-scale solar project pipeline included 849MWp are in the US, 600MWp are in Japan, 384MW in Brazil, 150MWp in China, 63MWp in Mexico, and 36MWp in the UK. The estimated resale value and gross profit contribution of the late-stage pipeline was said to exceeds US$4.5 billion and US$850 million, respectively. The value relates to when projects have been built and connected to the grid.
In the US the company has seven solar power plants totalling 771MWp that are connected to the grid, and Barren Ridge, Mustang and Tranquillity power plants are already delivering electricity and RECs. US project development subsidiary, Recurrent Energy was said to have secured power purchase agreements totalling 78MWp for 2017 and 2018 projects in California.
Canadian Solar said it had booked approximately US$1.6 billion of solar power plant assets under non-current assets. This includes plants already in operation, as well as plants under construction to be owned and operated.
Canadian Solar said it expected total module shipments in the second quarter of 2016 to be in the range of approximately 1,200MW to 1,250MW, including approximately 30MW of shipments to its utility-scale solar projects that may not be recognized in second quarter 2016 revenue.
Total revenue for the second quarter was expected to be in the range of US$710 million to US$760 million, with gross margin expected to be between 15% and 17%.
Total module shipments guidance remained as previously stated, which was to be in the range of approximately 5.4GW to 5.5GW, with approximately 5.0 GW recognized in revenue.
However, the company has made further major upward revisions to its capacity expansion plans, primarily in increasing its in-house module assembly capacity.
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