Solar Co. Exceeds Revenue Estimates in Q2

Source: Streetwise Reports   08/19/2022

Shares of Canadian Solar Inc. traded 15% higher yesterday to a new 52-week high after the company reported Q2/22 financial results that highlighted a 62% YoY increase in revenue and raised the ranges of its FY/22 revenue estimates by $500 million.

Global solar technology and renewable energy firm Canadian Solar Inc. (CSIQ:NASDAQ), yesterday announced financial results for the second quarter of 2022 ended June 30, 2022. The company advised that during the quarter, it was successful in meeting or exceeding its previous forecast for the number of solar modules shipped, total revenues, and gross margin.

The firm stated that in Q2/22, it had solar module shipments of 5.06 GW (gigawatts), which was above its estimates for 4.9-5.1 GW. The company noted that this represents a 37% increase over shipments made in Q2/21 and added that of the 5.06 GW total, 126 MW (megawatts) were shipped to its own utility-scale solar power projects.

In addition, the company reported that in Q2/22, total revenue increased by 85% sequentially and 61% year-over-year to $2.31 billion, compared to $1.25 billion in Q1/22 and $1.43 billion in Q2/21, respectively.

The company explained that the revenue gains were the result of “higher project sales, higher solar shipment volumes and average selling price, and significant growth in the firm’s battery storage solutions business.”

Canadian Solar’s Chairman and CEO, Dr. Shawn Qu, stated, “We achieved strong results in the second quarter of 2022, with solar module shipments, revenue, and gross margin all at or exceeding the high end of prior guidance. Sequentially, we grew our module shipments by nearly 40% and battery storage solutions revenues by 2.8 times while significantly expanding our profitability and completing a large volume of project sales.”

“Our capacity growth strategy is also well on track, which we expanded per our recent announcement to invest in our own polysilicon capacity in a region rich in renewable energy resources. This will allow us to gain further control over sourcing, technology, and supply chain,” CEO Qu added.

Yan Zhuang, President of Canadian Solar’s CSI Solar subsidiary, commented, “CSI Solar delivered strong results in the second quarter, significantly growing volume and increasing pricing while taking cost control measures in a difficult environment as polysilicon prices continue to go up…Reflecting a positive trend, our battery storage shipments in H1/22 have already exceeded 1 GWh, a record level for us.”

Canadian Solar’s Global Energy subsidiary’s Corporate VP and President Ismael Guerrero stated, “We delivered significant growth in the second quarter by monetizing approximately 880 MWp of project sales across Australia, the U.S., the U.K, and Japan…We are particularly encouraged by the passing of the IRA in the U.S. as our subsidiary, Recurrent Energy, has one of the largest and best quality project pipelines, with a total of 8 GWp of solar and 16.5 GWh of battery storage.”

The company reported that gross profit rose by 105% y-o-y to $371 million, which resulted in a gross margin of 16.0%, which exceeded previous estimates. Canadian Solar said that the increase was attributed mostly to higher volumes, higher module pricing, and decreased manufacturing costs.

The company advised for Q2/22 it recorded a net income of $74 million, or $1.07 per diluted share, versus a net income of $11 million, or $0.18 per diluted share in Q2/21.

The company offered some forward guidance and stated that for Q3/22, it expects total revenues of $2.0-2.1 million with a gross margin of 15.0-16.5%. The firm indicated that total module shipments recognizable as revenues by CSI Solar are estimated to be between 6.0 GW to 6.2 GW.

Canadian Solar advised that it is raising its FY/22 guidance to $7.5-8.0 billion, up from its prior estimates of $7.0-7.5 billion. The firm stated that its FY/22 volume targets for its CSI Solar and Global Energy business units remain unchanged from prior estimates for total module shipments of 20-22 GW and battery storage shipments of 1.8-1.9 GWh at CSI Solar and total project sales of 2.1-2.6 GW at Global Energy.

CEO Qu remarked, “We are off to a strong first half for 2022 and expect continued solar module volume growth through the remainder of the year as we ramp up capacity towards 2023 volume growth targets.”

The company mentioned that earlier this month, via a wholly owned subsidiary of CSI Solar, it entered into an agreement to invest in a polysilicon manufacturing facility in Haidong City, China. Production at the facility is expected to commence in mid-2024. When built, the plant will have the capacity to produce about 50,000 tons of high-purity polysilicon. The company noted that further opportunities exist to establish additional manufacturing facilities in the city for making ingots, wafers, cells, modules, and auxiliary materials.

Canadian Solar is a global renewable energy and solar technology company based in Ontario, Canada. The company designs, manufactures, and sells solar ingots, cells, wafers, and solar modules, provides solar energy and battery storage solutions, and develops utility-scale solar power and battery storage projects. The company listed that it has successfully delivered about 76 GW of solar photovoltaic modules to clients and has developed and constructed greater than 6.8 GWp in more than 20 countries.

Canadian Solar has a market cap of around $2.52 billion with approximately 64.27 million shares outstanding and a short interest of about 6.05%. CSIQ shares opened 7% higher yesterday at $42.02 (+$2.79, +7.11%) over the previous day’s $45.63 closing price and reached a new 52-week high price this morning of $47.69. The stock traded today between $41.69 and $47.69 per share and closed for trading at $45.19 (+$5.95 +15.19%) yesterday, Thursday, August 18, 2022. 

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