Canadian Solar Reports First Quarter 2014 Results

Pubblicato su 19 mag 2014
CSI(Canadian Solar) 
May 16, 2014 - Canadian Solar today announced its financial results for the first quarter ended March 31, 2014. 

First Quarter 2014 Highlights

- Solar module shipments were 500MW, compared to 621MW in the fourth quarter of 2013 and to first quarter guidance in the range of 470MW to 490MW.
- Net revenue was $466.3 million, compared to $519.5 million in the fourth quarter of 2013 and to first quarter guidance in the range of $415 million to $430 million.
- Net revenue from the total solutions business as a percentage of total net revenue was 27.4% compared to 23.4% in the fourth quarter of 2013.
- Gross margin was 14.7%, compared to 19.5% in the fourth quarter of 2013 and to first quarter guidance in the range of 14% to 16%.
- Diluted earnings per share were $0.07, compared to $0.39 in the fourth quarter of 2013.
- Cash, cash equivalents and restricted cash balances at the end of the quarter totaled $781.0 million, compared to $679.4 million at the end of the fourth quarter of 2013.
- Net cash used in operating activities was $153.7 million, compared to net cash provided by operating activities of $73.2 million in the fourth quarter of 2013.
- During the quarter, the Company closed the sale of one solar power plant in Ontario, Canada to BluEarth valued at over C$53 million.

First Quarter 2014 Results

Net revenue for the first quarter of 2014 was $466.3 million, down 10.2% from $519.5 million in the fourth quarter of 2013 and up 76.9% from $263.6 million in the first quarter of 2013. Total solar module shipments in the first quarter of 2014 were 500MW, compared to 621MW in the fourth quarter of 2013 and 340MW in the first quarter of 2013. Solar module shipments in the first quarter of 2014 included 49MW used in the Company's total solutions business, compared to 41MW in the fourth quarter of 2013 and 23MW in the first quarter of 2013.

By geography, in the first quarter of 2014, sales to Asia and other markets represented 50.4% of net revenue, sales to the Americas represented 43.6% of net revenue, and sales to Europe represented 6.0% of net revenue, compared to, 62.4%, 32.1% and 5.5%, respectively, in the fourth quarter of 2013 and 57.4%, 17.9% and 24.7%, respectively, in the first quarter of 2013.

                                Q1 2014           Q4 2013           Q1 2013
                                US$M      %      US$M      %      US$M      %
Asia and others       234.7     50.4    323.8    62.4    151.5     57.4
Americas                 203.4     43.6    167.0    32.1      47.1     17.9
Europe                       28.2       6.0      28.7      5.5      65.0     24.7
Total                         466.3   100.0     519.5  100.0   263.6   100.0

Gross profit in the first quarter of 2014 was $68.6 million, compared to $101.3 million in the fourth quarter of 2013 and $25.6 million in the first quarter of 2013. The sequential decrease in gross profit was primarily due to lower module shipments in the first quarter of 2014. The year-over-year increase in gross profit was primarily due to higher module shipments, as well as the increase in revenue contribution from the Company's higher margin total solutions business. Gross margin in the first quarter of 2014 was 14.7%, compared to 19.5% in the fourth quarter of 2013 and 9.7% in the first quarter of 2013. 

Total operating expenses were $42.0 million in the first quarter of 2014, down 24.9% from $56.0 million in the fourth quarter of 2013 and up from $7.5 million in the first quarter of 2013. 

Selling expenses were $24.7 million in the first quarter of 2014, down 13.0% from $28.5 million in the fourth quarter of 2013 and up 31.8% from $18.8 million in the first quarter of 2013. The sequentialdecrease in selling expenses was primarily due to lower bonus and labor costs and the seasonal decline in module shipments. The year-over-year increase in selling expenses was primarily due to higher shipping costs, as well as higher labor costs, partially offset by lower marketing expenses.

General and administrative expenses were $14.7 million in the first quarter of 2014, down 39.3% from $24.3 million in the fourth quarter of 2013 and up from negative $13.7 million in the first quarter of 2013. The sequential decrease in general and administrative expenses was primarily due to the asset impairment charge of $3.7 million related to the mono-crystalline furnaces in the Luoyang plant and $1.2 million of bad debt allowance taken in the fourth quarter of 2013. The year-over-year increase in general and administrative expenses was primarily due to reversal of the provision for an arbitration decision against the Company totaling approximately $30.0 million in the first quarter of 2013.

Research and development expenses were $2.5 million in the first quarter of 2014, compared to $3.2 million in the fourth quarter of 2013 and $2.4 million in the first quarter of 2013.

Operating margin was 5.7% in the first quarter of 2014, compared to 8.7% in the fourth quarter of 2013 and 6.8% in the first quarter of 2013. 

Interest expense in the first quarter of 2014 was $12.0 million, compared to $9.9 million in the fourth quarter of 2013 and $14.6 million in the first quarter of 2013. The sequential increase in interest expense was primarily due to higher bank charges, as well as the interest on the convertible senior notes issued in the first quarter of 2014. 

Interest income in the first quarter of 2014 was $2.8 million, compared to $2.8 million in the fourth quarter of 2013 and $3.3 million in the first quarter of 2013. 

The Company recorded a loss on change in fair value of derivatives of $7.4 million in the first quarter of 2014, compared to a gain of $8.9 million in the fourth quarter of 2013 and a gain of $1.7 million in the first quarter of 2013. Net foreign exchange gain in the first quarter of 2014 was $0.9 million compared to a net foreign exchange loss of $18.5 million in the fourth quarter of 2013 and a net foreign exchange loss of $14.8 million in the first quarter of 2013.

Income tax expense in the first quarter of 2014 was $7.3 million, compared to income tax expense of $3.7 million in the fourth quarter of 2013 and income tax benefit of $3.4 million in the first quarter of 2013.

Net income attributable to Canadian Solar in the first quarter of 2014 was $3.8 million, or $0.07 per diluted share, compared to net income of $20.9 million, or $0.39 per diluted share, in the fourth quarter of 2013, and net loss of $4.4 million, or $0.10 per diluted share, in the first quarter of 2013.

Financial Condition

As of March 31, 2014, the Company had $781.0 million of cash, cash equivalents and restricted cash, compared to $679.4 million as of December 31, 2013.

On February 18, 2014, the Company closed a concurrent offering of 3,194,700 common shares and $150 million in principal amount of 4.25% convertible senior notes due 2019, receiving net proceedsof approximately $255.7 million after deducting discounts and commissions but before offering expenses.

Accounts receivable, net of allowance for doubtful accounts, at the end of the first quarter of 2014 were $343.7 million, compared to $280.7 million at the end of the fourth quarter of 2013. Accounts receivable turnover was 71 days in the first quarter of 2014, compared to 59 days in the fourth quarter of 2013.

Inventories at the end of the first quarter of 2014 were $376.4 million, compared to $231.2 million at the end of the fourth quarter of 2013. Inventory turnover was 74 days in the first quarter of 2014, compared to 53 days in the fourth quarter of 2013.

Accounts and notes payable at the end of the first quarter of 2014 were $665.0 million, compared to $639.4 million at the end of the fourth quarter of 2013.

Short-term borrowings at the end of the first quarter of 2014 were $801.4 million, compared to $778.5 million at the end of the fourth quarter of 2013. Long-term debt at the end of the first quarter of 2014 was $163.5 million, compared to $151.4 million at the end of the fourth quarter of 2013. Senior convertible notes totaled $150 million at the end of the first quarter of 2014, compared to nil at the end of the fourth quarter of 2013. Short-term borrowings and long-term debt directly related to utility-scale solar power projects totaled $218.3 million at the end of the first quarter of 2014.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked: "Both shipments and revenue for the first quarter exceeded our guidance, in this seasonally slow quarter. Demand remained strong in our key target markets, such as Canada, Japan, and the U.S., and we benefited from a slightly higher average selling price for our modules. We also made progress on our total solutions business, which contributed 27.4% ofour total net revenue in the first quarter of 2014, up from 23.4% in the fourth quarter of 2013. In addition, during the quarter we successfully completed a concurrent equity and convertible bond offering which positions us well to accelerate the development of our solar power project business and contribute to our profitable growth in the quarters ahead."

Michael G. Potter, Senior Vice President and Chief Financial Officer of Canadian Solar, commented: "We continue to execute according to plan, as we secure, develop and ultimately sell our utility-scale solar projects and continue to profitably operate our solar module business. Gross margin was 14.7%, and was impacted approximately 1% by the effects of a small fire in our cell factory. We hope to recover that from insurance later this year. We were able to reduce operating expenses by 24.9% in the first quarter to match the seasonally lower shipment level. Our inventory balance increased by $145.3 million at the end of the first quarter compared to the fourth quarter, in order to support expected demand growth from our module business and our total solutions business, including construction delayed by the severe winter conditions in North America in the first quarter. We ended the first quarter with $781.0 million in cash, cash equivalents and restricted cash, up from $679.4 million at the end of the fourth quarter. This continues to give us a considerable advantage as we pursue higher margin solar module and utility-scale project opportunities in our target markets."

Utility Scale Project Pipeline Update

At the end of March 2014, the Company had a pipeline of late stage utility-scale solar projects totaling approximately 1.2 GW DC. These projects include owned and joint-venture projects as well as projects where the Company provides engineering, procurement and construction (EPC) services.

In Canada, during the first quarter of 2014, the Company closed the sale of the Little Creek project in Ontario, Canada to BluEarth for over C$53.0 million. During the quarter the Company also completed the sale of two projects, Westbrook and Oro, to a fund managed by BlackRock and simultaneously entered into EPC contracts to complete the construction of these projects. In addition, the Demorestville project, a project previously sold to a fund managed by BlackRock, commenced commercial operation in the first quarter of 2014. Another project, William Rutley, is in commercial operation pending completion of the sale to an investor. The Company's late stage solar project pipeline in Ontario, Canada, including those in construction, now stands at approximately 453MW DC, representing a revenue opportunity of approximately C$1.7 billion once the projects are built and connected to the grid.

The following table summarizes the status of the Company's solar projects in Ontario, Canada at the end of March 2014: 


In the United States, during the first quarter of 2014, the Company completed construction of two solar power plants totaling approximately 13MW DC. At the end of the quarter, the Company's late stage, utility-scalesolar power project pipeline in the United States totaled approximately 151MW DC.

In Japan, in the first quarter of 2014, the Company was able to increase its utility-scale solar power project pipeline to 343MW DC. In addition, the Company has short-listed buyers and partners for the first bundle of projects totaling 11MW. The Company expects to start construction of the first project in the near future. The Company continues to work on expanding its project pipeline in Japan, and expects it to total approximately 600MW by the end of 2014. Meanwhile, we have noticed that construction permitting for some projects in Japan takes longer time than we had hoped for. 

The following table summarizes the status of the Company's solar projects in Japan at the end of March 2014:


In China, as of the end of the first quarter of 2014, the Company has identified a pipeline of late stage utility-scale solar power project pipeline totaling 290MW, and is continuing with the permitting process.

Business Outlook

The Company's business outlook is based on management's current views and estimates with respect to operating and market conditions, its current order book, global and local financing environment as well as uncertainty relating to customer final demand and solar project construction schedule. Management's views and estimates are subject to change without notice.

For the second quarter of 2014, the Company expects module shipments to be in the range of approximately 600MW to 630MW. Total revenue for the second quarter of 2014 is expected to be in the range of $560 million to $590 million, with gross margin expected to be between 17% and 19%.

For full year 2014, the Company reaffirmsits guidance for annual module shipments to be in the range of 2.5GW to 2.7GW, including 400MW to 500MW of project recognition. In addition, the Company expects to build and/or hold up to 250MW of project assets during 2014. The Company also reaffirms guidance for net revenue in 2014 to be in the range of approximately $2.7 billion to $2.9 billion.

The Company's Canadian and U.S. project revenue recognition is expected to be back-end loaded in 2014 due to permitting and construction scheduling as well as US GAAP accounting rules which, for most Canadian projects, only allow revenue recognition after the commercial operation date (COD) and the transfer of ownership to end customers. The estimated COD of all of the Company's late-stage projects in Canada, the U.S., Japan and China is subject to change without notice as a result of delays in permitting and construction, among other risk factors. The acceptance tests and closing process will start after COD. The length of acceptance tests may be affected by the solar radiation level and other weather conditions, therefore, the close of project sales transaction may not always occur in the same quarter of COD.

The Company has recently commissioned another module workshop in its flagship factory in Changshu, Jiangsu Province, China. This brings our total annual module production capacity to 3 GW. Meanwhile, the Company will start construction of a new solar cell production site in Funing, Jiangsu Province, China and expects to bring 60MW of new cell capacity on line by the end of 2014. If fully built, the new site can host up to 1.2GW of solar cell production capacity. While this new site provides room for continuous growth, the Company will make further investment decisions only if it determines that the market demands exist and will remain healthy for the long term.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked: "We are experiencing strong demand for our products in all key geographies and expect reasonably strong global market demand growth in 2014. We expect Japan, Canada, China, and the U.S., among others, to remain healthy markets for us through 2014. We continue to believe that in 2014, and for several years to follow, China will be the biggest market in the world, with at least 11GW to 12GW of solar module installations this year with the possibility of achieving the total announced target of 14GW. We are also excited with our prospects in the U.S. market, and having recently ramped up our module production capacity in our Canadian plant, we will start shipping significant volumes from Canada to the U.S. On the project business front, we also expect to continue our steady progress. With the severe Ontario winter and subsequent snow melt flooding events behind us, we recently ramped up construction activities, and expect to make significant progress in all of our project sites from the spring to the fall."

"It is also worth mentioning that although the permitting of some Japanese projects takes longer than expected, we are making progress in our project business in this country. We have recently short-listed both buyers and local EPC contractors for the first bundle of projects totaling 11MW. We will soon be able to announce the construction commencement of the first 1MW project. Though that sounds like a humble start, it allows us to establish the market benchmark of project transaction value and EPC cost for our future projects in Japan. It also signals our transaction from one of the largest brand module suppliers to a provider of both solar project and module solutions."


Profili di ENF per aziende sudette in questo articolo

CSI(Canadian Solar) (Materiali): https://it.enfsolar.com/csi-canadian-solar
CSI(Canadian Solar) (Pannelli Fotovoltaici): https://it.enfsolar.com/csi-canadian-solar
CSI(Canadian Solar) (Componenti): https://it.enfsolar.com/csi-canadian-solar
CSI(Canadian Solar) (Installatori di Pannelli Solari): https://it.enfsolar.com/csi-canadian-solar
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