PVTIME - Canadian Solar Inc. ("Canadian Solar" or the "Company") (NASDAQ: CSIQ) today announced financial results for the quarter ended March 31, 2020.
First Quarter 2020 Highlights
- Total module
shipments increased 41% year-over-year to 2.2 GW, in line with first
quarter 2020 guidance of 2.15 GW to 2.25 GW. - Net revenue
increased 70% year-over-year to $826 million, exceeding first quarter 2020
guidance of $780 million to $810 million. - Gross profit
increased 108% year-over-year to $223 million. Gross margin increased 480
basis points year-over-year to 27.0%, in line with first quarter 2020
guidance of 26% to 28%. - Net income
attributable to Canadian Solar was $110.6 million, or $1.84 per diluted
share, compared to a net loss of $17.2 million or $0.29 per diluted share
in the first quarter of 2019. - As of March
31, 2020, the Company's portfolio of utility-scale solar power plants in
operation was 956 MWp with an estimated total resale value of
approximately $830 million to Canadian Solar.
First Quarter 2020 Results
Net revenue in the first quarter of 2020 was $826 million, compared to $920
million in the fourth quarter of 2019, and $485 million in the first quarter of
2019. The year-over-year revenue growth was due to higher module shipments and
project sales, partially offset by a decline in average module selling price
("ASP").
Total module shipments in the first quarter of 2020 were 2,214 MW,
compared to 2,474 MW in the fourth quarter of 2019, and 1,575 MW in the first
quarter of 2019. Of the totals, 253 MW were shipped to the Company's
utility-scale solar power projects in the first quarter of 2020, compared to
295 MW in the fourth quarter of 2019, and 52 MW in the first quarter of 2019.
Gross profit in the first quarter of 2020 was $223 million, compared to $230
million in the fourth quarter of 2019, and $107 million in the first quarter of
2019. Gross margin in the first quarter of 2020 was 27.0%, compared to 25.0% in
the fourth quarter of 2019, and 22.2% in the first quarter of 2019. The gross
margin improvement was primarily due to an increased contribution of higher
margin project sales.
Income from operations in the first quarter of 2020 was $113 million,
compared to $111 million in the fourth quarter of 2019, and $7 million in the
first quarter of 2019. Operating margin was 13.7% in the first quarter of
2020, compared to 12.1% in the fourth quarter of 2019, and 1.4% in the first
quarter of 2019.
Non-cash depreciation and amortization charges in the first quarter of
2020 were $45 million, which is unchanged from the fourth quarter of 2019,
and higher than $38 million in the first quarter of 2019.
The Company uses derivative instruments to hedge its foreign exchange
positions. In the first quarter of 2020, the Company recorded a foreign
exchange loss of $34 million, which was largely offset by a $33 million gain on
the change in fair value of derivatives used in the Company's foreign
exchange hedging program. The resulting net loss in the first quarter of 2020
was $1 million, compared to a net loss of $3 million in the fourth quarter of
2019, and a net loss of $14 million in the first quarter of 2019.
The investment income loss of $14 million in the first quarter of 2020 was
primarily attributable to an impairment provision charge with respect to our
remaining 49% equity interest in the Roserock Project in the U.S.
Income tax benefit in the first quarter of 2020 was $29 million, compared
to a tax expense of $25 million in the fourth quarter of 2019, and a tax
benefit of $8 million in the first quarter of 2019. The tax benefit in the
first quarter of 2020 was primarily due to a one-time net operating loss
carryback provision.
Net income attributable to Canadian Solar in the first quarter of 2020 was
$110.6 million, or $1.84 per diluted share, compared to net income of $67.7
million, or $1.12 per diluted share, in the fourth quarter of 2019, and a net
loss of $17.2 million, or $0.29 per diluted share, in the first quarter of
2019.
Dr. Shawn Qu, Chairman and Chief Executive
Officer, commented: "We achieved a 70% increase in net revenue and 108%
increase in gross profit year-over-year in the first quarter of 2020. While
COVID-19's impact on the demand for our products and services was limited in
the first quarter, we remain cautious given the market uncertainty and expected
softness in the second half of 2020. As with past periods of volatility,
we focus on supporting our employees, customers and partners;
restricting discretionary spending; and investing into long-term growth
opportunities. The industry's long-term fundamentals remain strong, with
numerous catalysts for revenue and profitability growth. We are particularly
excited by the market outlook for our Energy business, as lower equipment ASPs
help to improve the profitability of our contracted projects. In addition,
the low interest rate environment makes our solar projects even more
sought-after as countercyclical investment assets. We will continue to sell and
recycle capital to grow our project pipeline, while also growing stable,
recurring revenues by retaining partial ownership of selected projects. Our
focus remains on improving our return on capital and equity, as we manage the
near-term challenges and enhance the Company's position for sustainable
long-term growth."
Yan Zhuang, previously Acting CEO and newly appointed President and Chief
Operating Officer, commented, "We delivered another strong quarter,
achieving net income of $110.6 million, or $1.84 per diluted share, in the
first quarter of 2020. In our Energy business, we completed solar power plant
sales in Japan and Italy and reinforced our market leadership by reinvesting in
our project pipeline. In our Module and System Solutions ("MSS")
business, we expanded our long-term partnerships with a new 1.2 GW multi-year
module supply agreement with Lightsource BP. We continue to make significant
progress in creating bankable and competitive solar plus energy storage
solutions, leveraging our unique position as one of the world's largest solar
energy solutions providers. Taken together, our global brand, established sales
and partnership networks, financial strength and proven ability to successfully
adapt to market changes through technological and business model innovation,
give Canadian Solar a powerful competitive advantage."
Dr. Huifeng Chang, Senior Vice President and Chief Financial Officer, added, "During the first quarter of 2020, we continued to strengthen our balance sheet and improve our liquidity position, which gives our partners and customers added confidence during the current market uncertainty. We reduced total debt and maintained unrestricted cash at a healthy level. Our inventory level increased in the first quarter primarily due to our strategic decision to increase module inventory in the U.S. to qualify for the investment tax credit and applicable tax credit percentage. Additionally, in light of the current macroeconomic weakness, we suspended our share repurchase program to maximize liquidity. We will continue to monitor the macroeconomic situation and take contingency measures to preserve cash and minimize risk."
For more information please visit: http://investors.canadiansolar.com/news-releases/news-release-details/canadian-solar-reports-first-quarter-2020-results
