March 21 (Renewables Now) - Canadian Solar Inc (NASDAQ:CSIQ) today said its net profit for 2018 amounted to USD 237.1 million (EUR 208.5m), rising by 138% year-on-year, but guided for a lower result in 2019.
Revenues, solar photovoltaic (PV) module shipments and gross margin all exceeded the company’s expectations in the fourth quarter and in the full year 2018, said CEO Shawn Qu. The acceleration on the sale of a number of solar power assets helped boost revenues and earnings, but this will reduce project sales revenue and profit in 2019, the company head pointed out.
The table below contains details on Canadian Solar’s full-year performance and its forecast for 2019.
|Results in USD, unless specified||2018||2017||2019 forecast|
|Total solar module shipments (in GW)||6.6||6.8||7.4 to 7.8|
|Net revenue||3.74 billion||3.39 billion||3.5 billion to 3.8 billion|
|Net income attributable to Canadian Solar||237.1 million||99.6 million||lower than 2018|
|Net income per diluted share||3.88||1.69||N/A|
|Non-GAAP adjusted net income attributable to Canadian Solar||199.4 million||59.6 million||N/A|
The 2019 revenue forecast includes the impact of an expected drop in solar module prices and lower revenue from project sales. In addition, the appreciation of the Chinese yuan against the US dollar and the Euro over the past few months is seen to result in higher costs, reducing profit from module manufacturing.
Canadian Solar has two principal businesses -- modules and systems solutions (MSS) and energy. The former is focused on the design, development, manufacture and sale of solar products and the provision of services to solar projects. It brought net revenues of USD 2.41 billion last year.
The Energy business, where Canadian Solar develops and sells solar projects, operates solar farms and sells green electricity, recorded net revenues of USD 1.58 billion. At the end of February, the company had 986 MWp of utility-scale solar power plants in operation with an estimated total resale value of roughly USD 1.2 billion.
“Our focus remains on downstream Energy Business where we can leverage our expertise and competitive advantage to deliver a higher return on investment. This includes consistently winning new projects in sought-after markets, reliably developing projects on time and on budget and leveraging our powerful global network of banking and investor partners,” said Shawn Qu.
Canadian Solar’s late-stage, utility-scale solar power projects, including parks under construction, had a total capacity of 2.9 GWp at the end of February.
FOURTH QUARTER 2018
Net profit almost doubled quarter-on-quarter, reaching USD 111.6 million in October-December 2018. The company achieved a record quarterly gross margin of 30.1%, or 28.3% if the benefit of a US CVD reversal is excluded, thanks to its operational cost and inventory controls and declining raw material prices, said CFO Huifeng Chang.
In the fourth quarter, Canadian Solar completed the sale of 470 MWp of US solar projects, 247 MWp of solar parks in China, and its 20% stake in the 399-MWp Pirapora portfolio in Brazil.
“Our ability to successfully monetize our solar project assets, while profitably running our module business, has allowed us to strengthen our balance sheet, including an approximately 14% reduction in debt in the fourth quarter of 2018 compared to the third quarter and our repayment in February 2019 of the full USD 127.5 million outstanding balance of senior convertible notes,” the CFO added.
The table contains Canadian Solar’s fourth-quarter performance and its forecast for the first three months of 2019.
|Results in USD, unless specified||Q4 2018||Q3 2018||Q1 2019 forecast|
|Total solar module shipments (in GW)||1.95||1.59||1.3 to 1.4|
|Net revenue||901.0 million||768.0 million||450 million to 480 million|
|Gross margin (in %)||30.1||26.1||16 - 18|
|Net income attributable to Canadian Solar||111.6 million||66.5 million||low or negative|
|Net income per diluted share||1.81||1.09||N/A|
|Non-GAAP adjusted net income attributable to Canadian Solar||99.5 million||60.3 million||N/A|
Despite the quarter-on-quarter growth, revenue actually fell by 18.7% on the year due to a lower average module selling price and reduction in project revenue.
The net profit for January-March 2019 is expected to be low or negative, mainly due to typical lower production and sales volume during the Chinese New Year holiday, an IT upgrade, a lower module price, less sales of solar projects , and an expected foreign exchange loss due to the appreciation of the Chinese yuan.
(USD 1 = EUR 0.88)