Canadian Solar lifts 2017 shipments forecast, Q3 profit declines

Canadian Solar Inc (NASDAQ:CSIQ) today posted a lower third-quarter (Q3) net profit, but said that solar module shipments, revenue and gross margin have all exceeded its guidance.

The solar manufacturer enjoyed better-than-expected demand in China, and the pull-in effects in the US market ahead of a decision on import tariffs for solar photovoltaic (PV) modules and cells. Solar module shipments recognised in revenue reached 1,782 MW, with demand in Japan and India also helping. Canadian Solar is now raising its forecast for 2017 shipments to 6.7 GW-6.8 GW from 6.0 GW-6.5 GW previously.

There were also some headwinds in the quarter, CEO and chairman Shawn Qu said, such as an increase in the cost of raw materials, and the appreciation of the Chinese and Canadian currencies against the US dollar. “We responded by expanding on those manufacturing steps in which we have technology advantages, such as diamond wire-saw wafering and black silicon solar cell,” Qu said.

Higher-than-previously-expected average selling prices (ASP), better cost controls and manufacturing efficiencies helped maintain the gross margin in the period.

More details on Canadian Solar's Q3 performance and its forecast for the fourth quarter of 2017 and the full year are available in the table.

Of total revenues in the quarter, some USD 9.6 million came from the operation of solar power plants. These are recorded on Canadian Solar’s balance sheet as project assets, assets held-for-sale and solar power systems, net. At the end of September the firm had 1,419.5 MWp in operation, of which 900 MWp in the US. A further 1,598.9 MWp of utility-scale solar projects are in the late-stage of development, including under construction, mainly in Japan, China, Latin America, the US and Australia.

“We are continuously making progress in the monetization of our operating solar power plants. We are close to the finish line with transactions to sell certain project assets in the US and Australia,” said the company’s head.

On the PV manufacturing side, by the end of 2017 Canadian Solar expects to have the capacity to produce 1.2 GW of ingot, 5 GW of wafer, 5.45 GW of cells and 8.11 GW of modules. By December 2018 it intends to lift the ingot capacity to 2.5 GW, and boost the PV cell and module capacity to 6.95 GW and 10.31 GW.

“We believe that solar energy will be adopted by more and more people and the long-term aspect of the industry is bright given the compelling fundamentals,” said Qu. “Canadian Solar will continue to prioritize profitability rather than market share, focus on research and technology, and selectively invest into certain manufacturing processes to optimize our supply chain and cost structure.”

(USD 1 = EUR 0.86)

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