Canadian Solar Reports Second Quarter 2021 Results

PVTIME Canadian Solar Inc. (“Canadian Solar” or the “Company”) (NASDAQ: CSIQ) announced financial results for the quarter ended June 30, 2021.


  • Solar module shipments of 3.7 GW in the second quarter of 2021, top end of 3.5 GW to 3.7 GW guidance.
  • Revenue increased 105% year-over-year (“yoy”) to a record $1.43 billion, in line with guidance of $1.4 billion to $1.5 billion.
  • Gross margin of 12.9%, ahead of guidance range of 9.5% to 10.5%.
  • Net income attributable to Canadian Solar of $11 million, or $0.18 per diluted share.
  • 1.5 GWh of battery storage projects under construction and 19 GWh of total storage development pipeline.
  • Published the ESG Sustainability Report with updated disclosures aligned with global standards on July 29, 2021.
  • Carve-out IPO of CSI Solar subsidiary remains on track.

Total module shipments in the second quarter of 2021 were 3.66 GW, a 26% yoy increase and 17% quarter-over-quarter (“qoq”) increase. Of the total, 167 MW was shipped to the Company’s own utility-scale solar power projects.

Net revenue in the second quarter of 2021 grew by 105% yoy and 31% qoq to $1,430 million. The sequential improvement was driven by an increase in module shipments and average selling price (“ASP”), growth in beyond-module sales and a higher revenue contribution from battery storage shipments, partially offset by lower project sales.

Gross profit in the second quarter of 2021 was $185 million, down 5% qoq but up 26% yoy. Gross margin in the second quarter of 2021 was 12.9%, above guidance of 9.5% to 10.5% driven by higher module ASP, manufacturing efficiency improvements and a greater contribution from battery storage shipments and beyond-module sales. Sequentially, the second quarter gross margin was below first quarter 2021 gross margin of 17.9% mainly driven by lower project sales margin due to a geographic mix shift.

Total operating expenses in the second quarter of 2021 were $158 million compared to $151 million in the first quarter of 2021. The sequential increase was mainly driven by higher shipping and handling expenses and a decrease in other operating income, partially offset by a customer claim reversal.

Non-cash depreciation and amortization charges in the second quarter of 2021 were $66 million, compared to $62 million in the first quarter of 2021, and $48 million in the second quarter of 2020. The sequential increase was driven by CSI Solar’s capacity expansion as reflected in higher property, plant and equipment.

Net foreign exchange loss in the second quarter of 2021 was $3 million, compared to a net loss of $7 million in the first quarter of 2021 and a net loss of $5 million in the second quarter of 2020.

Income tax benefit in the second quarter of 2021 was $2 million, compared to $14 million of income tax expense in the first quarter of 2021 and $9 million of income tax expense in the second quarter of 2020. The benefit reflected lower effective tax rate and lower impact from high tax jurisdictions.

Net income attributable to Canadian Solar in the second quarter of 2021 was $11 million, or $0.18 per diluted share, compared to net income of $23 million, or $0.36 per diluted share in the first quarter of 2021. The decline in net income was driven by lower gross profit and higher operating expenses, partially offset by the income tax benefit.

Net cash used by operating activities in the second quarter of 2021 was $61 million, compared to $83 million in the first quarter of 2021. The operating cash outflow was mainly driven by an increase in accounts receivable and a continued increase in inventory, as a result of capacity expansion as well as a tactical hedge against input cost and ASP inflation. This was partially offset by higher accounts and notes payables.

Total debt in the second quarter of 2021 was $2.23 billion, compared to $2.28 billion in the first quarter of 2021. The decrease in total debt was mainly driven by a reduction of project financing upon project sales, partially offset by new borrowing and existing facility drawdowns. Non-recourse debt used to finance solar power projects decreased to $454 million in the second quarter of 2021 from $522 million in the first quarter of 2021 as a result of project sales.

Dr. Shawn Qu, Chairman and CEO, commented, “I am pleased that we have turned the corner in the second quarter, delivering strong revenue growth and better-than-expected profitability. While market conditions remain challenging, we continue to focus on initiatives to strengthen our long-term positioning such as growing our pipeline of valuable solar and battery storage projects, and differentiating our technology and product offering through value-add system solutions. Notably, we have made significant progress in growing, executing and monetizing our battery storage projects and will update the market in due course.

“At the same time, we are also fully incorporating environmental, social and governance factors in all our major business decisions, and recently published our latest ESG Sustainability Report. As an example, we are establishing our first manufacturing facility of 10 GW ingot capacity in Qinghai Province, which will help us meaningfully reduce the carbon footprint of our products as nearly 90% of Qinghai’s installed power capacity is clean energy.

“Separately, the carve-out IPO of CSI Solar remains on track, with the listing application materials having been submitted.  We are now addressing comments from the Shanghai Stock Exchange in accordance with usual review procedures.”

Yan Zhuang, President of Canadian Solar’s CSI Solar subsidiary, said, “Although polysilicon and transportation costs remained elevated, we continue to raise module pricing, prioritize margins while maximizing capacity utilization, and continue to improve on our product and manufacturing efficiency as we take further cost control measures. During the second quarter, we also delivered our first batch of large-scale battery storage shipments. While we anticipate and respond to short-term market fluctuations, our long-term growth strategy remains unchanged. That is, to grow market share through capacity expansion, improve pricing power through technology differentiation and optimized channel structure, and gain more control over our supply chain through upstream positioning.”

Ismael Guerrero, Corporate VP and President of Canadian Solar’s Global Energy subsidiary, said, “We have seen a meaningful increase in demand for our solar and battery storage projects driven by both existing and new low cost of capital market players. This demonstrates that the capital pool for clean energy infrastructure assets is both broadening and deepening, yet the supply of these assets remains scarce. We are positioned to benefit from these trends with a global solar project pipeline of 22 GW of which nearly 6 GW is contracted and/or under construction. We also have a global battery storage project pipeline of 19 GWh of which 2.3 GWh is contracted and/or under construction. Recently, we started signing higher priced PPAs (power purchase agreements), which are helping to offset the impact of higher equipment costs. Meanwhile, we continue to execute on our strategy to grow our base of recurring income through expanding our market share in services such as operations and maintenance and long-term ownership of project investment vehicles.”

Dr. Huifeng Chang, Senior VP and CFO, added, “We posted our highest quarterly revenue of $1.43 billion in the second quarter and made significant progress to capitalize on growth in the battery storage market. We ended the second quarter with $1.3 billion in cash, and have raised approximately $110 million to date from our at-the-market equity offering program, which is well on track. We also took the opportunity to lengthen the overall maturity profile of our debt during the quarter to further improve our financial position.”