First Solar, the world’s leader in CdTe thin-film solar panel solutions, has announced its financial results for the second quarter of 2016. The overall financial results were better than expected even operational margin was low, and the company aims to develop larger scale projects for optimizing operational costs.
First Solar realized production on a per-watt basis to 785MW in 2Q16, up 39% YoY. The production increase was resulted from full capacity utilization and significant efficiency improvement. The company successfully brought up its fleet average conversion efficiency from 15.4% during 2Q15 to 16.2% during 2Q16.
Net sales were up by 4.3% YoY to US$934 million, and US$86 million higher than the prior quarter. Higher module sales, sale of the Kingbird project, and revenue recognition across multiple projects contributed to the increase. The full year’s EPS is expected to reach US$4.2~4.5, and the operational margin is expected to reach 5~7%.
Nonetheless, First Solar reported EPS of US$0.13 for 2Q16, compared to US$1.66 in 1Q16. Although the company reported income of US$934 million, the net income was only US$13.4 million, rapidly down 85.7% from 2Q15, and operating margin was below 1%. This was from recognition of US$86 million charges for restructurings during the quarter, including production capacity transformation in First Solar’s Malaysia plant, restructuring of its EPC division and its Skytron business.
“Our operational execution in 2016 continues to be strong and resulted in another quarter of solid financial results,” said Mark Widmar, CEO of First Solar. “Our lead line module efficiency exited the quarter at over 16.6%, and we further lowered our module cost per watt. We sold our Kingbird project in Q2, and our steady execution across our portfolio of systems projects resulted in significant cost reductions.
First Solar expects to reach US$3.8 to 4.0 billion of GAAP net sales in the full year 2016, with a gross margin target of 18.5~19%. Annual shipments target is 2.9~3.0GW.
Series 5 production to be started
First Solar announced to end production of the TetraSun crystalline silicon products in its Malaysian plant and transform the capacity to Series 5 productions. The Series 5 capacity is scheduled to be fully converted by the end of 2017, but will produce only 1GW of Series 5 that year.
Widmar revealed that First Solar is planning to add new lines to produce Series 6, a larger format, but there is no timing of when they add the capacity.
New, large-scale projects booked
Along with the announcement of its financial results, First Solar released that it has booked 121MWdc of community solar projects in the U.S., including a total of approximately 41MWdc of projects that are currently under construction by EPC company M+W Energy. All the booked projects will utilize First Solar’s CdTe thin film solution.
“This scale of community solar implementation is extraordinary, and suggests the enormous potential for this market segment,” said Georges Antoun, First Solar’s Chief Commercial Officer. “Small one-off installations cannot match the economies of scale realized by utility-scale portfolios that minimize development costs, transaction costs and building costs, while bringing end consumers the freedom to choose solar energy.”
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