Profit and revenue swell for Canadian Solar during Q2

Canadian Solar today published encouraging second quarter financials that present a continuation of profit, revenue and sales growth.

Building upon a strong Q1, the Chinese-Canadian solar company has revealed that its revenue for Q2 rose 2% sequentially to $692 million. Although this figure represented a 14% contraction from Q2 2016, gross profit was higher – at $168 million – for Q2 than in Q1 ($91 million) and Q2 2016 ($138 million).

This strong performance was fueled by increased module shipments of 1.6 GW, which represents both a sequential and year-on-year increase for Q2, and the benefits of a $43 million and $15 million anti-dumping/countervailing duty reversal. Average selling prices (ASPs) for modules were also higher in Q2.

Canadian Solar also saw its operating expenses reduce sequentially by 10% to $84 million, including selling expenses rise to $39 million as a result of higher shipping and handling costs and increase volumes of modules shipped.

The company’s growing downstream segment yielded a larger income in Q2, with revenue from operations reaching $84 million, up from a loss from operation of $2.3 million in Q1. This pushed operating margin to 12% for the quarter, against -0.3% and 4.9% in Q1 2017 and Q2 2016 respectively.

By the end of Q2, Canadian Solar’s portfolio of operational solar plants reached 1.26 GW with a total resale value of $1.8 billion. Many of these projects are in the United States and Canada, and during the quarter, Canadian subsidiary Recurrent Energy offloaded its 200 MW-AC Great Valley Solar project to Sempra Renewables.

Canadian Solar CEO and chairman Shawn Qu remarked that the company remains on track to monetize its operating solar power plants in the U.S., Japan, the U.K., Brazil and China, revealing that discussions are at an advanced stage for the sale of 703 MW of its U.S. solar power plant assets.

Company CFO Huifeng Chang added: “The higher module shipments were driven by strong demand for solar modules in China, India, Japan and the U.S., with the gross margin improvement dues to higher than excepted average selling price and better cost controls.”

Canadian Solar’s utility-scale solar pipeline comprises 1.4 GW of late-stage installations, while its ingot, wafer, cell and module manufacturing capabilities are each set to increase by the end of the year, with wafer capacity of 4 GW by December 31 (projected) double the 2 GW current capacity.

Shipment outlook for the year projects 6 GW to 6.5 GW of solar module shipments in 2017, the company affirmed.