Canadian Solar posts lower Q3 profit and revenue but sees improvement

Ken Teegardin/CC BY-SA 2.0

November 13 (Renewables Now) - Canadian Solar Inc (NASDAQ:CSIQ) saw its attributable net profit decline to USD 58.3 million (EUR 52.9m) in the third quarter of 2019 as revenues dropped, but guided for improved results in the closing quarter of the year.

The solar module maker and power producer said on Tuesday that its top line fell to USD 759.9 million from USD 768 million in the third quarter of 2018 and from USD 1.04 billion in the prior quarter of 2019. The sequential decrease was mainly the result of a drop in revenue from the sale of solar power plants. Still, the figure was in line with its earlier projections for revenues of between USD 780 million and USD 810 million.

The company’s solar module shipments, meanwhile, exceeded its guidance of 2,200 MW-2,300 MW, coming at 2,387 MW. This total includes solar module shipments recognised in revenue of 2,156 MW, as compared to 2,376 MW in the second quarter and 1,521 MW in the year-ago period.

Canadian Solar has two main segments -- Module and System Solutions (MSS), which is involved in the production and sale of solar modules and other photovoltaic (PV) products and incorporates the engineering, procurement and construction (EPC) and operating and maintenance (O&M) business; and the Energy division, which focuses on the development and sale of solar projects.

More details about Canadian Solar’s financial performance are available in the table below.

Figures in USD, unless otherwise noted Q3 2019 Q3 2018 9mo 2019 9mo 2018
Net revenues 759.9m 768m 2.28bn 2.84bn
Gross profit 198.9m 200.4m 489m 503.8m
Gross margin (%) 26.2 N/A 21.4 N/A
Income from operations 80.1m 95.9m 147.5m 228.1m
Foreign exchange gain (loss) 2.8m 10.1m 6.7m (799,000)
Net profit (loss) attributable to Canadian Solar 58.3m 66.5m 103.8m 125.5m
Net earnings (loss) per diluted share 0.96 1.09 1.71 2.08

Excluding a USD-24.3-million countervailing duty (CVD) benefit, Canadian Solar’s third-quarter gross margin was 23%. The company’s net attributable profit on a non-GAAP basis, excluding this CVD true-up benefit, stood at USD 40.1 million, or USD 0.66 per diluted share. Apart from the foreign exchange gain in July-September, it booked a loss on the change in fair value of derivatives USD 2.2 million, compared to USD 12.5 million in the previous quarter and USD 8.9 million in the third quarter of 2018. 

"Q3 was another strong, highly profitable quarter for Canadian Solar. We have significant room for growth ahead of us and remain positive in our outlook given further improvements in our backlog and visibility," commented chairman and CEO Shawn Qu.

A the end of September, Canadian Solar had 795.8 MWp of utility-scale solar power plants in operation, mostly in China and the US, with an estimated total resale value of about USD 900 million. Its late-stage, utility-scale solar project pipeline amounted to 3.4 GWp, including 1.29 GWp in the US.

Looking ahead, Canadian Solar guided for solar module shipments of 2,300 MW-2,400 MW in the fourth quarter and revenues at between USD 850 million and USD 880 million. It noted that revenues are projected to grow sequentially even though in the near term they will be impacted by the potential shift of certain project sales from the fourth quarter of 2019 into the first quarter of 2020 due to revised sales schedules. The fourth-quarter gross margin is seen to range between 19% and 21%. 

Canadian Solar reiterated its outlook for solar module shipments of 8.4 GW-8.5 GW for the full year, with total revenues anticipated to stand at between USD 3.13 billion and USD 3.16 billion.

(USD 1.0 = EUR 0.908)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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