Canadian Solar Inc (NASDAQ:CSIQ) enjoyed solid financial performance in the third quarter of 2022, more than doubling its consolidated net profit and exceeding its forecast for gross margin.
"We achieved a 123% increase in net income on a year-over-year basis, despite the headwinds from ongoing COVID-19 shutdowns and macroeconomic challenges,” said CEO Shawn Qu.
Canadian Solar is a photovoltaic (PV) module manufacturer and solar project developer that operates through two business segments, namely CSI Solar (solar module production and total system solutions) and Global Energy (global project development activities). The former is in the process of being carved out into CSI Solar Co Ltd in order to be listed. The company’s head explained that the carve-out initial public offering (IPO) is on track and is awaiting registration with the China Securities Regulatory Commission.
Canadian Solar closed the July-September quarter with a consolidated net profit of USD 78 million (EUR 74.8m), up from USD 35 million a year back regardless of the increase in total operating costs to USD 274 million from USD 176 million.
At USD 363 million, gross profit gained 59% in annual terms, pushing the gross margin up to a level of 18.8%, which exceeded the guidance of 15.0%-16.5%.
"We achieved significant growth in both profit and volume during the third quarter, driven by strong demand, ongoing reductions in manufacturing cost, and currency benefits from a strong U.S. Dollar relative to the Renminbi,” said Yan Zhuang, President of Canadian Solar's CSI Solar subsidiary.
Total module shipments recognised as revenues in the three months jumped 62% on the year to 6 GW, including 196 MW shipped to the company's own utility-scale solar power projects. The growth, coupled with the higher average selling prices, led to a 57% year-on-year increase in net revenues, to USD 1.93 billion. Meanwhile, the top line result contracted 16% in sequential terms due to the lower revenue from project sales and battery storage solutions and a small decline in module average selling price.
| Amounts in USD million |
Q3 2022 |
Q3 2021 |
9mo 2022 |
9mo 2021 |
| Net profit attributable to Canadian Solar Inc |
78.5 |
35.2 |
162.1 |
69.3 |
| Income (loss) from operations |
88.7 |
53.1 |
220.3 |
123 |
| -- of which CSI Solar |
97 |
30.3 |
191.3 |
(7.4) |
| -- of which Global Energy |
27 |
30.7 |
81.7 |
111.9 |
| Net revenues |
1,932.5 |
1,229.5 |
5,497
|
3,748.5 |
| -- of which CSI Solar |
1,831.5
|
1,089.5 |
4,749.1 |
2,856.8 |
| -- of which Global Energy |
100.9 |
140 |
747.9
|
891.7 |
5,497
1,831.5
747.9
At the end of September, the company had 40 GWh of battery storage projects in the pipeline, while its solar project development pipeline totalled 25 GWp.
Looking ahead, Canadian Solar guided for total revenues of between USD 1.8 billion and USD 1.9 billion in the fourth quarter, with gross margin seen in the range of 16% to 18%. Total module shipments recognised as revenues by CSI Solar are expected to be within the 6 GW-6.3 GW range, with around 290 MW expected to be used for the company’s own projects.
For the full year, the company forecasts CSI Solar's total battery storage shipments to be 1.8 GWh-1.9 GWh, of which 300 MWh for own projects. Global Energy project sales are projected to stand at 2.2 GW-2.3 GW.
In 2023, Canadian Solar anticipates total module shipments of between 30 GW and 35 GW.
(USD 1.0 = EUR 0.959)
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Canadian Solar supplied solar modules to Delhi International Airport in India.
