World’s first-tier solar PV manufacturer, Canadian Solar, has announced its financial results for the third quarter of 2016. Its module shipments and net revenues were behind its previous guidance, representing the sluggish market demand during the quarter.
The total module shipments in 3Q16 were 1,185MW, down from 1,290MW in 2Q15 and were lower that its 3Q guidance of 1,200~1,300MW. Net revenue was US$657.3 million, down 18.4% QoQ and 22.7% YoY and was slightly lower than the 3Q guidance of US$660~710 million. However, revenues contributed by Canadian Solar’s downstream solution business represented 10.4% of total net revenues in 3Q16, a rate up from 8.5% in 2Q16.
Geographically, 41.1% of the total net revenues were from the Americas, 42.7% from Asia, and 16.2% from Europe and others. Canadian Solar’s global business has distributed more evenly than 2Q16 and 3Q15.
Gross profit in 3Q16 was US$117.3 million, compared with US$138.5 million in 2Q16 and US$126.8 million in 3Q15. Gross margin in the quarter was 17.8%, up from 17.2% in 2Q16 and 14.9% in 3Q15, while the margin was higher than its 3Q guidance of 14~16%.
The sequential increase in gross margin was primarily due to lower module costs resulting from decreased purchase price of wafer and cell as well as improved manufacturing efficiency, stated the company.
Net income in 3Q16 was US$15.6 million, rapidly down from US$40.4 million in 2Q16 and US$30.4 million in 3Q15. The figure translated into earning per diluted share at US$0.27, lower than US$0.68 in the previous quarter and US$0.53 in the same quarter of 2015.
Capacity and PV project business
As of the end of the third quarter of 2016, Canadian Solar expected module capacity to reach 5.8GW by the end of 2016, and cell to 2.4GW. The expected cell capacity is lower than originally planned 3.1GW due to, first, the construction delay in the 850MW southeastern Asia manufacturing plant, and second, resumption in production in the company’s Funing cell factory which was damaged by a tornado in June, 2016.
"We remain confident in our long-term outlook and in our proven ability to navigate through disruptive, lower-visibility market environments,” commented Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar. “We will continue to invest in advanced technologies that will deliver even higher module efficiency. We expect to further benefit from our global brand and flexible capacity structure.”
As for the fourth quarter of 2016, Canadian Solar expects total module shipments to be 1.4~1.5GW, total revenue to be US$600~750MW, and gross margin to be 11~16%. For the full year of 2016, the company expects to reach 5.073~5.175GW of module shipments and US$2.78~2.94 billion of revenues.
The company also expects to complete a certain amount of utility-scale PV power plants during 2016. As of September 30, Canadian Solar had a utility-scale solar project pipeline of up to 2GW, including 940MW in the U.S., 597MW in Japan, 390MW in Brazil, 38MW in China, 63MW in Mexico, 15MW in UK, and 6MW in Africa.
Its utility-scale solar power plant portfolio reached 948MW by September 30 and had contributed US$24.1 million to its total revenues in 3Q16. The portfolio covered 483MW in the U.S., 218MW in China, 120MW in UK, 100MW in Canada, and 22MW in Japan.