GUELPH, ON, Nov. 19, 2020 /PRNewswire/ -- Canadian Solar
Inc. ("Canadian Solar" or the "Company") (NASDAQ: CSIQ) today
announced financial results for the quarter ended September 30, 2020.
Highlights
- Solar module shipments of 3.2 GW, exceeding guidance of 2.9 GW
to 3.1 GW.
- 31% sequential growth in revenue to $914
million, above guidance of $840
million to $890 million.
- Gross margin of 19.5%, well above guidance of 14% to 16%.
- Net income attributable to Canadian Solar of $8.8 million, or $0.15 per diluted share, after the adverse impact
of a $12.6 million withholding tax
expense in China related to a
special dividend distribution from the Module and System Solutions
("MSS") subsidiary to the Company.
- Completed a $260 million capital
raising in preparation for the Company's MSS business' carve-out
IPO and completed a $230 million
convertible bond issuance.
- Reiterates 2021 module shipment guidance of 18 GW to 20
GW.
- Manufacturing capacities expected to nearly double by 2021
year-end to support accelerating growth, with significant capacity
contribution starting from the second quarter of 2021.
- Secured over 860 MWp in new power purchase agreements ("PPA")
in Brazil, post Q3, in a private
auction with a large local utility company and through a corporate
PPA agreement with one of the largest financial institutions in
Latin America.
Dr. Shawn Qu, Chairman
and CEO, commented, "I am pleased to report another strong set
of results for the third quarter. We continued to focus on
executing our strategy, overcoming market challenges and delivering
long-term returns. During the third quarter, we took a major step
forward with the successful pre-IPO equity raising of CSI Solar
Co., Ltd. ("CSI Solar"), Canadian Solar's MSS subsidiary, which
received overwhelming support and participation from strategic
partners as we secured the capital required to expand our capacity
with the latest technology. We are well on track to achieve our
target of submitting the official IPO application by the second
quarter of next year.
"Another highlight from last month was the signing of our first
large scale energy storage system supply and service agreement,
strongly positioning Canadian Solar in the solar plus energy
storage market. We expect energy storage will increasingly
contribute to Company revenue and profit starting in 2021, setting
the stage to become an important earnings driver going forward. Our
integrated business model gives us the competitive advantage to
deliver bankable, end-to-end solar plus energy storage solutions,
which will unlock further growth opportunities.
"We have also made progress in identifying opportunities in
localized large-scale project investment vehicles to hold
grid-connected solar, energy storage and other clean energy
projects developed by our Energy business, leveraging the
successful publicly traded investment fund in Japan, which we have sponsored since 2017. We
are targeting to launch similar vehicles in Latin America and Europe within the next 12 to 24 months."
Yan Zhuang, President of CSI
Solar Co., Ltd. ("CSI Solar"), Canadian Solar's MSS subsidiary,
said, "As solar energy enters a new era of higher growth driven by
grid parity and accelerating supply side consolidation, we see a
window of opportunity to grow global market share by leveraging our
leadership position across premium and distributed generation
markets, investing in state-of-the-art and highly cost-competitive
capacity, and increasing the level of vertical integration of our
manufacturing process to better control manufacturing costs and
capture value. This is reflected in our updated capacity expansion
plan, which we are already implementing.
"At the same time, we face near-term challenges driven by a
confluence of factors, namely, the temporary shortage of raw
material supply driving approximately 50% to 100% price increases
of critical inputs, such as polysilicon, solar glass and EVA; the
sharp increase in shipping costs; and the depreciation of the U.S.
Dollar. While we benefit from the sharp recovery of global solar
demand since July, this also caused input material shortages. As a
result, we are expecting pressure on our short-term profitability.
We are taking active measures to mitigate these micro and macro
factors. Over the longer term, however, we believe these changes
will ultimately favor Canadian Solar as a market leader with a
differentiated technological offering, strong brand and market
leadership position."
Ismael Guerrero, Corporate VP
and President of Canadian Solar's Energy business, said, "While
the widespread impact of COVID-19 created project uncertainties,
our teams worked relentlessly to support customers, maintain
project timelines wherever possible and overcome major challenges,
such as substantially securing tax equity for our U.S. projects. We
started construction on the Maplewood and Pflugerville projects in the
U.S., as well as on the Tastiota
project in Mexico. In terms of
project sales, we closed various sales across the U.S.,
Canada, Japan and China. We also continue to expand our
high-quality project pipeline. A few days ago, we secured 862 MWp
in new PPAs in Brazil and we were
awarded 22 MWp in the latest solar auction in Japan, solidifying our leadership position in
two key markets. We remain committed to growing our pipeline and
will continue to focus on optimizing the use of cash through
capital partnerships and partial ownership of select solar and
storage projects."
Dr. Huifeng Chang, Senior VP
and CFO, added, "We delivered revenue growth and modest
underlying profitability during the third quarter. Given strong
operating cash generation, the recent convertible bond issuance and
MSS pre-IPO equity raising, we have strengthened our capital
reserves. This puts us in a financially strong position to manage
any unexpected market changes. Our total cash position at the end
of September was $1.6 billion, well
above our usual average, although we have since deployed some of
this cash in support of long-term growth opportunities. As always,
we remain disciplined in our capital allocation decisions and will
continue to monitor and adjust to market conditions."
Third Quarter 2020 Results
Total module shipments in the third quarter of 2020 grew by 33%
year-over-year ("yoy") and 9% quarter-over-quarter ("qoq") to 3,169
MW driven by strong global demand growth. Of the total, 278 MW
was shipped to the Company's own utility-scale solar power
projects.
Net revenue in the third quarter of 2020 grew by 20% yoy and 31%
qoq to $914 million. Growth was
driven by higher module shipments and project sales, partly offset
by a lower module average selling price ("ASP").
Gross profit in the third quarter of 2020 was $178 million, up 21% sequentially. Gross margin
in the third quarter of 2020 was 19.5%, compared to guidance of 14%
to 16%, and 21.2% in the second quarter of 2020. The gross margin
decline was mainly driven by the previously anticipated module ASP
pressure and increased manufacturing input costs, but the magnitude
of the fluctuations was smaller than expected.
Total operating expenses in the third quarter of 2020 were
$119 million, up from $102 million in the second quarter of 2020. The
increase was primarily driven by higher research and development
spending and increased shipping and handling expenses.
Income from operations in the third quarter of 2020 was
$59 million, up 30% sequentially.
Non-cash depreciation and amortization charges in the third
quarter of 2020 were $56 million, compared to $48 million in the second quarter of 2020, and
$37 million in the third quarter of
2019.
The net foreign exchange loss in the third quarter of 2020 was
$13 million, compared to a net loss
of $4.5 million in the second quarter
of 2020 and a $0.6 million net gain
in the third quarter of 2019. The higher foreign exchange loss was
mainly due to the depreciation of the U.S. Dollar relative to the
Chinese Renminbi.
Income tax expense in the third quarter of 2020 was $21 million, compared to an income tax expense of
$9 million in the second quarter of
2020 and an income tax expense of $10
million in the third quarter of 2019. The increase in the
tax expense was mainly driven by a $12.6
million withholding tax expense in China related to a $126
million special dividend distribution from CSI Solar to the
parent Company in the third quarter.
Net income attributable to Canadian Solar in the third quarter
of 2020 was $8.8 million, or
$0.15 per diluted share, compared to
net income of $20.6 million, or
$0.34 per diluted share in the second
quarter of 2020.
Net cash provided by operating activities in the third quarter
of 2020 was a positive $47 million,
compared to $114 million used in the
second quarter of 2020.
Module and System Solutions (MSS) Business Segment
The table below sets forth Canadian Solar's capacity expansion
targets for 2021 year-end. All new capacity will produce Canadian
Solar's next generation high-power, high-efficiency modules in the
HiKu and BiHiKu product portfolios.
Manufacturing Capacity, GW (period-end)
|
FY20
|
1H21
|
FY21
|
Ingot
|
2.1
|
5.1
|
10.0
|
Wafer
|
6.3
|
11.3
|
11.3
|
Cell
|
9.6
|
18.2
|
18.2
|
Module
|
16.1
|
23.2
|
25.7
|
Note: The Company's capacity expansion plans are subject to
change without notice based on market conditions and capital
allocation plans.
Operating Results
The following table presents unaudited select results of
operations data of the Company's MSS business segment for the
periods indicated.
MSS Business
Segment Financial Results*
(In Thousands of
U.S. Dollars, Except Percentages and Unless Otherwise
Stated)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30, 2020
|
June 30,
2020
|
September
30, 2019
|
|
September
30, 2020
|
September
30, 2019
|
Net
revenues
|
772,718
|
706,155
|
674,921
|
|
2,168,674
|
1,816,938
|
Cost of
revenues
|
629,388
|
557,263
|
493,505
|
|
1,727,582
|
1,382,545
|
Gross
profit
|
143,330
|
148,892
|
181,416
|
|
441,092
|
434,393
|
Operating
expenses
|
102,117
|
85,670
|
94,730
|
|
275,159
|
268,529
|
Income from
operations
|
41,213
|
63,222
|
86,686
|
|
165,933
|
165,864
|
Gross
margin
|
18.5%
|
21.1%
|
26.9%
|
|
20.3%
|
23.9%
|
Operating
margin
|
5.3%
|
9.0%
|
12.8%
|
|
7.7%
|
9.1%
|
*Includes effects of both sales to
third party customers and to the Company's
Energy Business Segment. Please
refer to the attached financial tables for intercompany transaction
elimination information. Income from operations reflects
management's allocation and estimate as some services are shared by
the Company's two business segments.
The table below provides the geographic distribution of the net
revenue of the MSS business:
MSS Net Revenues
Geographic Distribution* (In Millions of U.S. Dollars, Except
Percentages)
|
|
Q3
2020
|
% of Net
Revenues
|
|
Q2
2020
|
% of Net
Revenues
|
|
Q3
2019
|
% of Net
Revenues
|
Asia
|
308
|
44
|
|
261
|
39
|
|
209
|
32
|
Americas
|
246
|
36
|
|
215
|
32
|
|
244
|
37
|
Europe and
others
|
141
|
20
|
|
193
|
29
|
|
204
|
31
|
Total
|
695
|
100
|
|
669
|
100
|
|
657
|
100
|
*Excludes sales from the MSS business to the Energy
business.
Canadian Solar shipped 3.2 GW of modules to more than 70
countries in the third quarter of 2020. The top five markets
of the MSS business ranked by revenues were the U.S., Vietnam, Brazil, China
and Japan.
Energy Business Segment
Energy Business Strategy
Canadian Solar has one of the world's largest utility-scale
solar project development platforms, with a track record of
originating, developing, financing, building and bringing into
commercial operation over 5.6 GWp of solar power plants across six
continents. As a first mover, the Company has acquired extensive
experience and built a leadership position in solar project
development, with an aggregate pipeline of 16 GWp.
Traditionally, the operating model for the Company's Energy
business has been to sell projects when they reach either their
notice to proceed date ("NTP") or commercial operation date
("COD"), depending on the optimal exit point for each project based
on its specific risk and return profile. In certain cases, the
Company has retained a minority ownership interest in order to
capture additional operational value throughout the partial
ownership holding period, while still recycling most of the capital
back into developing new solar projects. There are two key benefits
to this approach:
- It permits Canadian Solar to capture higher margins while
recycling a large portion of capital. Meanwhile, it will allow the
Company to build a base of stable and long-term cash flows from
power sales, operations and maintenance ("O&M"), asset
management and other services; and create new growth opportunities,
including energy storage systems integration and optimization.
- Over time, the addition of more predictable and stable revenues
and cash flows from power sales, O&M, asset management and
other services will help smooth typical lumpiness associated with
the development and sale of solar power projects.
Management targets to achieve the following project sales and
accumulated project ownership retained over the next 5 years:
Energy Business
Targets
|
2020
|
2021
|
2022
|
2023
|
2024
|
Annual Project Sales,
GWp
|
1.1-1.3
|
1.8-2.3
|
2.4-2.9
|
3.2-3.7
|
3.6-4.1
|
Cumulative Projects
Retained (including inventory to be sold), MWp
|
~40
|
~200
|
~400
|
~760
|
~960
|
Note: There are
increased uncertainties regarding the closing dates of project
sales in 2020 due to COVID-19 disruptions. Forecasts for annual
project sales include both projects sold at NTP and COD, which have
a significant impact on revenue but more limited impact on profits.
Final timing and recognition of project sales may be impacted by
various external factors. These targets are subject to change
without notice.
|
To help fund this business strategy, the Company is in the
process of establishing capital partnerships with investors seeking
long-term, stable cash flows through investments in clean,
profitable and countercyclical solar energy infrastructure
investments. These capital partnerships involve launching both
public and private investment vehicles in select markets with large
energy demand, attractive power prices, high irradiation, and
stable capital markets. The next anticipated launch in Brazil, expected in the form of a Brazilian
Participation Fund for Infrastructure projects ("FIP-IE"), is
currently planned for assets that
will be built in 2021 (specific timing subject to
market conditions), followed by project investment vehicles in
certain European countries. Through these capital partnerships, the
Company expects to optimize the monetization of project assets and
build sustainable long-term value for Canadian Solar's
shareholders.
Total Project Pipeline
As of September 30, 2020, the
Company's total project pipeline was 16.3 GWp, including, 1.3 GWp
under construction, 3.8 GWp of backlog, and 11.2 GWp of earlier
stage pipeline. The backlog includes projects that have passed
their Risk Cliff Date and are expected to be built in the next one
to four years. A project's Risk Cliff Date depends on the country
where the project is located and is defined as the date on which
the project passes the last of the high-risk development stages.
This is usually after projects receive all the required
environmental and regulatory approvals, interconnection agreements,
feed-in tariff ("FIT") arrangements and power purchase agreements
("PPAs"). All projects in the current backlog have secured a PPA or
FIT or are reasonably assured of securing one.
The Company's pipeline includes early- to mid-stage project
opportunities currently under development but that are yet to be
de-risked.
The following table presents the Company's full pipeline as of
September 30, 2020. Please note that
the 862 MWp and 22 MWp of new PPAs and FITs secured in Brazil and Japan respectively are not reflected on this
table as backlog, given that they occurred after September 30.
|
Total Project
Pipeline (as of September 30, 2020) – MWp
|
Region
|
In
Construction
|
Backlog
|
Pipeline
|
Total
|
North
America
|
514
|
1,022
|
3,763
|
5,299
|
Latin
America
|
731*
|
1,539*
|
3,765
|
6,035
|
Europe, the Middle
East and Africa ("EMEA")
|
-
|
382*
|
2,628
|
3,010
|
Japan
|
70
|
220
|
-
|
290
|
Asia Pacific
excluding Japan
|
6
|
533
|
1,043
|
1,582
|
China
|
-
|
80
|
-
|
80
|
Total
|
1,321
|
3,776
|
11,199
|
16,296
|
Note: Gross MWp
size of projects includes 508 MWp and 63 MWp of
projects in construction and backlog, respectively, in Latin
America,
and 123 MWp in
backlog in EMEA, that are not owned by Canadian Solar or have been
sold to third parties.
|
|
|
|
|
|
|
The Company has a sizable amount of premium, high FIT projects
in Japan. The table below sets
forth the expected COD schedule of the Company's project backlog in
development and construction in Japan, as of September 30, 2020:
Expected COD Schedule – MWp
|
2020
|
|
2021
|
|
2022 and
Thereafter
|
|
Total
|
|
13
|
|
66
|
|
211
|
|
290
|
The Company is one of the first movers in developing and
supplying utility-scale energy storage projects. We believe there
are significant near-term growth opportunities in energy storage,
especially in solar plus storage projects, given the rapid
technological developments, declining battery storage costs, higher
capacity needs and accelerating retirements of fossil fuel power
plants. The Company is uniquely positioned to deliver energy
storage solutions to its customers, especially in solar plus
storage solutions, given its proprietary integrated technologies
and expertise, and its unique positioning as both a top-tier module
manufacturer and global project developer.
The table below sets forth the Company's storage project backlog
and pipeline as of September 30,
2020.
|
In
Operation
|
Backlog
|
Pipeline
|
Total
|
Storage
(MWh)
|
3
|
1,201
|
4,842
|
6,046
|
Solar Power Plants in Operation
As of September 30, 2020, the
Company's power plants in operation totaled 537 MWp, with a
combined estimated net resale value of approximately
$562 million to Canadian Solar. The estimated resale value is
based on selling prices that Canadian Solar is currently
negotiating or transaction prices of similar assets in the relevant
markets.
Latin
America
|
Japan
|
Asia
Pacific
ex.
Japan
|
China
|
Total
|
100
|
82
|
96
|
259
|
537
|
Note: Gross MWp size of projects, includes 26 MWp in
Asia Pacific ex. Japan already sold to third parties.
Operating Results
The following table presents unaudited select results of
operations data of the Company's Energy business segment for the
periods indicated.
|
Energy Business
Segment Financial Results
(In
Thousands of U.S. Dollars, Except Percentages and Unless Otherwise
Stated)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2020
|
June 30,
2020
|
September
30, 2019
|
|
September
30, 2020
|
September 30,
2019
|
Net
revenues
|
219,008
|
26,661
|
97,550
|
|
483,756
|
504,075
|
Cost of
revenues
|
164,409
|
15,083
|
77,589
|
|
327,831
|
453,292
|
Gross
profit
|
54,599
|
11,578
|
19,961
|
|
155,925
|
50,783
|
Operating
expenses
|
17,253
|
16,074
|
24,077
|
|
55,717
|
73,012
|
Income (loss) from
operations
|
37,346
|
(4,496)
|
(4,116)
|
|
100,208
|
(22,229)
|
Gross
margin
|
24.9%
|
43.4%
|
20.5%
|
|
32.2%
|
10.1%
|
Operating
margin
|
17.1%
|
-16.9%
|
-4.2%
|
|
20.7%
|
-4.4%
|
|
|
|
|
|
|
|
|
|
Business Outlook
The Company's business outlook is based on management's current
views and estimates given factors such as existing market
conditions, order book, production capacity, input material prices,
foreign exchange fluctuations, anticipated timing of project sales,
and the global economic environment. This outlook is subject to
uncertainty with respect to, among other things, customer demand,
project construction and sale schedules, product sales prices and
costs, and the global impact of the ongoing COVID-19 pandemic.
Management's views and estimates are subject to change without
notice.
For the fourth quarter of 2020, the Company expects total module
shipments to be in the range of 2.9 GW to 3.0 GW, including
approximately 350 MW of module shipments to the Company's own
projects that may not be immediately recognized as revenues. Total
revenues are expected to be in the range of $980 million to $1,015
million. Gross margin is expected to be between 8% and 10%,
below the Company's normal gross margins, reflecting the negative
near-term impact of raw materials shortages, which have pushed up
certain costs up by approximately 50% to 100%, including
polysilicon, solar glass and EVA, combined with higher shipping
costs and unfavorable currency movements.
The Company reiterates and
narrows its full year 2020 module shipment guidance of to 11.2 GW to 11.3 GW, and also reiterates full year 2021 shipment
guidance of 18 GW to 20 GW.
Dr. Shawn Qu, Chairman and
CEO, commented, "Our updated module shipment guidance
reflects the impact of the shortage of certain raw material supply
and subsequent price increase, which is affecting our immediate
term production plans and resulting in higher costs. That said, we
have plans to mitigate the profit margin pressure. We expect large
capacity additions for solar glass over the next few months, and
therefore a lessening margin impact over the coming quarters.
Likewise, some of the higher cost burden will be shared with our
customers.
"Our new capacity expansions, which increase the level of
vertical integration of our manufacturing process, will start to
contribute to earnings from Q2 of
next year and help to capture profit in the upper- and mid-stream
ingot, wafer and cell processes. We also expect our energy storage
solution business to become a significant growth and profit driver
starting in 2021. The new localized project investment vehicles,
once launched, will help to fuel the next leg of growth of our
Energy business in those regions. Given the increasing
market-driven nature of the solar industry, we expect demand and
supply imbalances to be corrected faster than in the past, as we
transition into a healthier market. With grid parity, we are very
positive on the long-term growth opportunities of the industry and
remain strongly positioned to gain market share, capture new
sources of growth and deliver long-term returns for
shareholders."
Recent Developments
On November 12, Canadian Solar
announced that two of its projects in Japan were awarded feed-in-tariffs under the
6th FIT Auction. The projects total 22 MWp, and once
constructed, they will enter into 20-year power purchase agreements
with Tokyo Electric Power Company at the rate of ¥11.99
($0.114) per kWh.
On October 19, Canadian Solar
announced it closed a supply contract and long-term service
agreement to deliver and integrate a 75 MW / 300 MWh lithium-ion
battery storage solution into the 100 MWac Mustang solar plant in
California with Goldman Sachs
Renewable Power LLC.
On October 6, Canadian Solar
announced the financial close of its 126 MWp Tastiota Solar Project
in Mexico. The financing package
consisted of a $67 million senior
loan, $15 million letter of credit
facility and a $12 million VAT
facility covering the construction and operation phase of the
project. The non-recourse financing package, arranged by Canadian
Solar was provided by Sumitomo Mitsui Banking Corporation
(SMBC).
On September 30, Canadian Solar
announced it agreed to a RMB1.78
billion (approximately $260
million) capital raising for its Module and System Solution
subsidiary, CSI Solar. This capital raising was an important step
for CSI Solar to qualify for the planned carve-out IPO in
China and brings in leading
institutional investors and strategic partners.
On September 21, Canadian Solar
announced it completed the sale of the 32 MWp Suffield Solar
Project in Canada to BluEarth
Renewables.
On September 16, Canadian Solar
announced the closing of its offering of $230 million in aggregate principal amount of
2.50% convertible senior notes due 2025, which includes the
exercise in full by the initial purchasers of their option to
purchase an additional $30 million in
aggregate principal amount of the notes. The Company received
aggregate net proceeds of approximately $223
million from the offering, after deducting discounts,
commissions and offering expenses.
On August 27, Canadian Solar
announced its wholly-owned subsidiary Recurrent Energy executed a
$75 million development loan
transaction with Nomura Corporate Funding Americas to fund the
project development activities in the U.S. and Canada.
On August 18, Canadian Solar
announced its wholly-owned subsidiary Recurrent Energy commenced
construction on the 144 MWac Pflugerville Solar Project in
Texas, U.S.
On August 17, Canadian Solar
announced it commenced construction on a 5 MWp commercial and
industrial rooftop solar project, one of the largest of its kind in
Malaysia.
Conference Call Information
The Company will hold a conference call at 8:00 a.m. U.S. Eastern Standard Time on
Thursday, November 19, 2020
(9:00 p.m., Thursday, November 19, 2020 in Hong Kong) to discuss the Company's third
quarter 2020 results and business outlook. The dial-in phone number
for the live audio call is 1-866-519-4004 (toll-free from the
U.S.), +852-3018-6771 (local dial-in from Hong Kong) or +1 845-675-0437 (from
international locations). The passcode for the call is
8846757. A live webcast of the conference call will also be
available on the Investor Relations section of Canadian Solar's
website at www.canadiansolar.com.
A replay of the call will be available two hours after the
conclusion of the call until 9:00
a.m. U.S. Eastern Standard Time on Friday, November 27, 2020 (10:00 p.m., November 27,
2020 in Hong Kong) and can
be accessed by dialing +1-855-452-5696 (toll-free from the U.S.),
+852-3051-2780 (local dial-in from Hong
Kong) or +1-646-254-3697 (from international locations),
with passcode 8846757. A webcast replay will also be
available on the investor relations section of Canadian Solar's at
www.canadiansolar.com.
About Canadian Solar Inc.
Canadian Solar was founded in 2001 in Canada and is one of the world's largest solar
power companies. It is a leading manufacturer of solar photovoltaic
modules and provider of solar energy solutions and has a
geographically diversified pipeline of utility-scale solar power
projects in various stages of development. Over the past 19 years,
Canadian Solar has successfully delivered over 49 GW of
premium-quality, solar photovoltaic modules to customers in over
150 countries. Canadian Solar is one of the most bankable companies
in the solar industry, having been publicly listed on NASDAQ since
2006. For additional information about the Company, follow Canadian
Solar on LinkedIn or visit www.canadiansolar.com.
Safe Harbor/Forward-Looking Statements
Certain statements in this press release regarding the Company's
expected future shipment volumes, gross margins are forward-looking
statements that involve a number of risks and uncertainties that
could cause actual results to differ materially. These statements
are made under the "Safe Harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by such terms as "believes,"
"expects," "anticipates," "intends," "estimates," the negative of
these terms, or other comparable terminology. Factors that could
cause actual results to differ include general business and
economic conditions and the state of the solar industry;
volatility, uncertainty, delays and disruptions related to the
COVID-19 pandemic; governmental support for the deployment of solar
power; future available supplies of high-purity silicon; demand for
end-use products by consumers and inventory levels of such products
in the supply chain; changes in demand from significant customers;
changes in demand from major markets such as Japan, the U.S., India, China
and Brazil; changes in customer
order patterns; changes in product mix; capacity utilization; level
of competition; pricing pressure and declines in average selling
prices; delays in new product introduction; delays in utility-scale
project approval process; delays in utility-scale project
construction; delays in the completion of project sales; continued
success in technological innovations and delivery of products with
the features customers demand; shortage in supply of materials or
capacity requirements; availability of financing; exchange rate
fluctuations; litigation and other risks as described in the
Company's SEC filings, including its annual report on Form 20-F
filed on April 28, 2020. Although the
Company believes that the expectations reflected in the
forward-looking statements are reasonable, it cannot guarantee
future results, level of activity, performance, or achievements.
Investors should not place undue reliance on these forward-looking
statements. All information provided in this press release is as of
today's date, unless otherwise stated, and Canadian Solar
undertakes no duty to update such information, except as required
under applicable law.
FINANCIAL TABLES FOLLOW
The following tables provide unaudited select financial data
for the Company's Module and System Solutions ("MSS") and Energy
businesses:
|
|
|
Select Financial
Data - Module and System Solutions, and
Energy
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2020
(In Thousands of U.S. Dollars, Except Percentages)
|
|
|
|
MSS
|
|
Energy
|
|
Elimination
|
|
Total
|
|
Net
revenues
|
|
|
772,718
|
|
219,008
|
|
(77,366)
|
|
914,360
|
|
Cost of
revenues
|
|
|
629,388
|
|
164,409
|
|
(57,854)
|
|
735,943
|
|
Gross
profit
|
|
|
143,330
|
|
54,599
|
|
(19,512)
|
|
178,417
|
|
Gross
margin
|
|
|
18.5%
|
|
24.9%
|
|
—
|
|
19.5%
|
|
Income from
operations
|
|
|
41,213
|
|
37,346
|
|
(19,512)
|
|
59,047
|
|
|
|
|
Select Financial
Data - Module and System Solutions, and
Energy
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2020
(In Thousands of U.S. Dollars, Except Percentages)
|
|
|
|
MSS
|
|
Energy
|
|
Elimination
|
|
Total
|
|
Net
revenues
|
|
|
2,168,674
|
|
483,756
|
|
(216,589)
|
|
2,435,841
|
|
Cost of
revenues
|
|
|
1,727,582
|
|
327,831
|
|
(168,398)
|
|
1,887,015
|
|
Gross
profit
|
|
|
441,092
|
|
155,925
|
|
(48,191)
|
|
548,826
|
|
Gross
margin
|
|
|
20.3%
|
|
32.2%
|
|
—
|
|
22.5%
|
|
Income from
operations
|
|
|
165,933
|
|
100,208
|
|
(48,191)
|
|
217,950
|
|
|
Select Financial
Data - Module and System Solutions, and
Energy
|
|
|
|
|
Three Months
Ended
September 30,
2020
|
|
Nine Months
Ended
September 30,
2020
|
|
(In Thousands of
U.S. Dollars)
|
MSS
Revenues:
|
|
|
|
Solar modules and
other solar power
products
|
628,601
|
|
1,787,563
|
Solar system
kits
|
48,557
|
|
120,655
|
EPC
services
|
1,934
|
|
5,856
|
Others (materials and
components)
|
16,260
|
|
38,011
|
Subtotal
|
695,352
|
|
1,952,085
|
Energy
Revenues:
|
|
|
|
Solar power
projects
|
206,743
|
|
437,182
|
Electricity
|
3,224
|
|
6,154
|
O&M
services
|
5,399
|
|
15,612
|
Others (EPC and
development services)
|
3,642
|
|
24,808
|
Subtotal
|
219,008
|
|
483,756
|
Total net
revenues
|
914,360
|
|
2,435,841
|
|
Canadian Solar
Inc.
|
|
Unaudited
Condensed Consolidated Statements of Operations
|
|
(In Thousands of
U.S. Dollars, Except Share and Per Share Data and Unless Otherwise
Stated)
|
|
|
|
|
Three Months
Ended
|
|
Nine Months Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$ 914,360
|
|
$ 695,846
|
|
$ 759,882
|
|
$
2,435,841
|
|
$
2,280,876
|
Cost of
revenues
|
735,943
|
|
548,634
|
|
560,968
|
|
1,887,015
|
|
1,791,881
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
178,417
|
|
147,212
|
|
198,914
|
|
548,826
|
|
488,995
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
53,998
|
|
53,463
|
|
46,935
|
|
160,120
|
|
130,227
|
|
General and
administrative
expenses
|
56,183
|
|
46,354
|
|
61,491
|
|
155,498
|
|
178,650
|
|
Research and
development
expenses
|
14,147
|
|
10,924
|
|
11,567
|
|
35,127
|
|
36,865
|
|
Other operating
income
|
(4,958)
|
|
(8,997)
|
|
(1,186)
|
|
(19,869)
|
|
(4,201)
|
Total operating
expenses
|
119,370
|
|
101,744
|
|
118,807
|
|
330,876
|
|
341,541
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
59,047
|
|
45,468
|
|
80,107
|
|
217,950
|
|
147,454
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(17,917)
|
|
(16,960)
|
|
(19,240)
|
|
(53,890)
|
|
(61,591)
|
|
Interest
income
|
2,031
|
|
2,081
|
|
2,579
|
|
6,891
|
|
9,060
|
|
Gain (loss) on change
in
fair value of derivatives, net
|
13,143
|
|
(2,349)
|
|
(2,176)
|
|
43,902
|
|
(15,924)
|
|
Foreign exchange gain
(loss), net
|
(26,517)
|
|
(2,192)
|
|
2,825
|
|
(62,828)
|
|
6,653
|
|
Investment income
(loss)
|
(6,393)
|
|
1,525
|
|
(738)
|
|
(18,880)
|
|
1,809
|
Other expenses,
net
|
(35,653)
|
|
(17,895)
|
|
(16,750)
|
|
(84,805)
|
|
(59,993)
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
and equity in earnings of
unconsolidated investees
|
23,394
|
|
27,573
|
|
63,357
|
|
133,145
|
|
87,461
|
Income tax benefit
(expense)
|
(20,632)
|
|
(8,899)
|
|
(10,434)
|
|
(477)
|
|
(16,858)
|
Equity in earnings
(loss) of
unconsolidated investees
|
6,105
|
|
1,739
|
|
2,303
|
|
7,859
|
|
28,025
|
Net
income
|
8,867
|
|
20,413
|
|
55,226
|
|
140,527
|
|
98,628
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss)
attributable to non-controlling
interests
|
34
|
|
(191)
|
|
(3,105)
|
|
459
|
|
(5,221)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
Canadian Solar Inc.
|
$
8,833
|
|
$
20,604
|
|
$
58,331
|
|
$
140,068
|
|
$
103,849
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
0.15
|
|
$
0.35
|
|
$
0.97
|
|
$ 2.35
|
|
$
1.74
|
Shares used in
computation -
basic
|
59,749,307
|
|
59,371,856
|
|
59,900,740
|
|
59,500,078
|
|
59,562,101
|
Earnings per share -
diluted
|
$
0.15
|
|
$
0.34
|
|
$
0.96
|
|
$ 2.31
|
|
$
1.71
|
Shares used in
computation -
diluted
|
60,829,073
|
|
59,793,196
|
|
60,846,753
|
|
60,705,300
|
|
61,040,675
|
|
Canadian Solar
Inc.
|
|
Unaudited
Condensed Consolidated Statement of Comprehensive
Income
|
|
(In Thousands of
U.S. Dollars)
|
|
|
|
Three Months
Ended
|
|
Nine Months Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
Income
|
8,867
|
|
20,413
|
|
55,226
|
|
140,527
|
|
98,628
|
Other
comprehensive income
(net of tax of nil):
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
adjustment
|
32,173
|
|
30,997
|
|
(13,419)
|
|
17,199
|
|
(8,604)
|
De-recognition of
commodity
hedge and interest rate swap
|
6,285
|
|
4,439
|
|
—
|
|
10,724
|
|
—
|
Gain (loss) on
changes in fair
value of derivatives
|
256
|
|
(104)
|
|
(1,314)
|
|
(3,859)
|
|
(6,994)
|
Comprehensive
income
|
47,581
|
|
55,745
|
|
40,493
|
|
164,591
|
|
83,030
|
Less:
comprehensive
income(loss) attributable to non-
controlling interests
|
51
|
|
3,802
|
|
(3,529)
|
|
2,412
|
|
(8,884)
|
Comprehensive
income
attributable to Canadian Solar
Inc.
|
47,530
|
|
51,943
|
|
44,022
|
|
162,179
|
|
91,914
|
Canadian Solar
Inc.
|
|
Unaudited
Condensed Consolidated Balance Sheets
|
|
(In Thousands
of U.S. Dollars)
|
|
|
|
|
|
September
30,
|
|
December 31,
|
|
|
|
2020
|
|
2019
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
1,102,927
|
|
$
668,770
|
|
|
Restricted
cash
|
445,424
|
|
526,723
|
|
|
Accounts receivable
trade, net
|
494,232
|
|
436,815
|
|
|
Accounts receivable,
unbilled
|
17,579
|
|
15,256
|
|
|
Amounts due from
related parties
|
18,543
|
|
31,232
|
|
|
Inventories
|
624,515
|
|
554,070
|
|
|
Value added tax
recoverable
|
92,761
|
|
108,920
|
|
|
Advances to
suppliers
|
111,913
|
|
47,978
|
|
|
Derivative
assets
|
19,797
|
|
5,547
|
|
|
Project
assets
|
543,693
|
|
604,083
|
|
|
Prepaid expenses and
other current assets
|
450,081
|
|
253,542
|
|
Total current
assets
|
3,921,465
|
|
3,252,936
|
|
Restricted
cash
|
13,651
|
|
9,927
|
|
Property, plant and
equipment, net
|
988,984
|
|
1,046,035
|
|
Solar power systems,
net
|
87,187
|
|
52,957
|
|
Deferred tax assets,
net
|
148,160
|
|
153,963
|
|
Advances to
suppliers
|
58,792
|
|
40,897
|
|
Prepaid land use
right
|
63,806
|
|
60,836
|
|
Investments in
affiliates
|
78,348
|
|
152,828
|
|
Intangible assets,
net
|
22,352
|
|
22,791
|
|
Derivatives
assets
|
256
|
|
—
|
|
Project
assets
|
589,434
|
|
483,051
|
|
Right-of-use
assets
|
28,059
|
|
37,733
|
|
Other non-current
assets
|
192,282
|
|
153,253
|
|
TOTAL
ASSETS
|
$
6,192,776
|
|
$
5,467,207
|
|
Canadian Solar
Inc.
|
|
Unaudited
Condensed Consolidated Balance Sheets (Continued)
|
|
(In Thousands
of U.S. Dollars)
|
|
|
|
|
September
30,
|
|
December 31,
|
|
|
2020
|
|
2019
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
borrowings
|
$
1,065,360
|
|
$
933,120
|
|
|
Long-term borrowings
on project assets -
current
|
238,474
|
|
286,173
|
|
|
Accounts
payable
|
496,795
|
|
585,601
|
|
|
Notes
payable
|
605,980
|
|
544,991
|
|
|
Amounts due to
related parties
|
5,743
|
|
10,077
|
|
|
Other
payables
|
458,475
|
|
446,454
|
|
|
Advance from
customers
|
120,296
|
|
134,806
|
|
|
Derivative
liabilities
|
4,354
|
|
10,481
|
|
|
Operating lease
liabilities
|
15,984
|
|
18,767
|
|
|
Other current
liabilities
|
158,247
|
|
121,527
|
|
Total current
liabilities
|
3,169,708
|
|
3,091,997
|
|
Accrued warranty
costs
|
41,698
|
|
55,878
|
|
Long-term
borrowings
|
623,592
|
|
619,477
|
|
Convertible
notes
|
222,881
|
|
—
|
|
Derivatives
liabilities
|
—
|
|
1,841
|
|
Liability for
uncertain tax positions
|
15,645
|
|
15,353
|
|
Deferred tax
liabilities
|
56,600
|
|
56,463
|
|
Loss contingency
accruals
|
25,318
|
|
28,513
|
|
Operating lease
liabilities
|
13,569
|
|
20,718
|
|
Financing
liabilities
|
78,442
|
|
76,575
|
|
Other non-current
liabilities
|
129,266
|
|
75,334
|
|
Total
LIABILITIES
|
4,376,719
|
|
4,042,149
|
|
Equity:
|
|
|
|
|
|
Common
shares
|
687,024
|
|
703,806
|
|
|
Treasury
stock
|
—
|
|
(11,845)
|
|
|
Additional paid-in
capital
|
(31,997)
|
|
17,179
|
|
|
Retained
earnings
|
933,669
|
|
793,601
|
|
|
Accumulated other
comprehensive loss
|
(87,497)
|
|
(109,607)
|
|
Total Canadian
Solar Inc. shareholders' equity
|
1,501,199
|
|
1,393,134
|
|
Non-controlling
interests in subsidiaries
|
314,858
|
|
31,924
|
|
TOTAL
EQUITY
|
1,816,057
|
|
1,425,058
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
6,192,776
|
|
$
5,467,207
|
|
View original
content:http://www.prnewswire.com/news-releases/canadian-solar-reports-third-quarter-2020-results-301176940.html
SOURCE Canadian Solar Inc.