GUELPH, Ontario, March 21, 2017 /PRNewswire/ -- Canadian Solar
Inc. ("Canadian Solar" or the "Company") (NASDAQ: CSIQ), one of the
world's largest solar power companies, today announced its
financial results for the fourth quarter and full year ended
December 31, 2016.
Fourth Quarter 2016 Highlights
- Total solar module shipments set a record high at 1,612 MW, of
which 1,581 MW were recognized in revenue, compared to 1,161 MW
recognized in revenue in the third quarter of 2016, and fourth
quarter 2016 guidance in the range of 1,400 MW to 1,500 MW.
- Net revenue was $668.4 million,
compared to $657.3 million in the
third quarter of 2016, and fourth quarter 2016 guidance in the
range of $600 million to $750
million.
- Net revenue from the total solutions business as a percentage
of total net revenue was 6.6% compared to 10.4% in the third
quarter of 2016.
- Gross margin was 7.3% including an anti-dumping and
countervailing duties (AD/CVD) true-up provision of $44.1 million associated with the prior years'
module sales. If excluding this charge, the gross margin would be
13.9%, compared to 17.8% in the third quarter of 2016, and fourth
quarter guidance in the range of 11.0% to 16.0%.
- Net loss attributable to Canadian Solar was $13.3 million, or $0.23 per diluted share, compared to net income
of $15.6 million, or $0.27 per diluted share, in the third quarter of
2016.
- Non-GAAP adjusted net income attributable to Canadian Solar,
which is adjusted to exclude the AD/CVD true-up provision of
$44.1 million, net of income tax
effect, was $14.2 million, or
$0.24 per diluted share, in the
fourth quarter of 2016. (For a reconciliation of GAAP to non-GAAP
results, see accompanying tables "Reconciliation of U.S. GAAP to
Non-GAAP Financial Measures.")
- Cash, cash equivalents and restricted cash balances at the end
of the quarter totaled $1.01 billion,
compared to $986.0 million at the end
of the third quarter of 2016.
- Net cash used in operating activities was approximately
$109.3 million, compared to net cash
used in operating activities of $205.7
million in the third quarter of 2016.
- During the quarter the Company completed the sale of two solar
power plants in Canada for over
C$152.5 million ($115 million) and two solar power plants in
China for RMB223.5 million ($32.2
million). The Company completed three additional solar power
plant sales in Canada for over
C$257 million ($195.32 million) on February 1, 2017.
- The Company's portfolio of operating solar power plants was
1,195.5 MWp as of February 28, 2017,
with an estimated total resale value of approximately $1.6 billion.
Full Year 2016 Results
- Total solar module shipments set a record high at 5,232 MW in
2016, compared to 4,706 MW in 2015, with 5,204 MW recognized in
revenue in 2016, compared to 4,384 MW recognized in revenue in
2015, and full year 2016 guidance in the range of 5,073 MW to 5,173
MW.
- Net revenue was $2.85 billion,
compared to $3.47 billion in 2015,
and full year 2016 guidance in the range of $2.78 billion to $2.94 billion.
- Net revenue from the total solutions business was 6.9% of total
net revenue, compared to 30.9% in 2015.
- Net income attributable to Canadian Solar was $65.2 million, or $1.12 per diluted share, compared to $171.9 million, or $2.93 per diluted share, in 2015.
- Non-GAAP adjusted net income attributable to Canadian Solar,
which is adjusted to exclude the AD/CVD true-up provision of
$44.1 million, net of income tax
effect, was $92.7 million, or
$1.60 per diluted share.
- Net cash used in operating activities was approximately
$278.1 million, compared to net cash
provided by operating activities of $413.7
million in 2015.
U.S. Anti-dumping and Countervailing Duty Provision for DOC
Preliminary Rulings
- The Company booked a true-up provision of $44.1 million primarily associated with prior
years' module sales from China to
the U.S for the Anti-Dumping Duty (AD) and Countervailing Duty
(CVD) preliminary results of the third administrative review (AR3)
of Solar 1 (as defined below) by the U.S. Department of
Commerce (DOC). The AR3 preliminary results were announced to the
public on December 22, 2016 for AD
and on January 9, 2017 for CVD. The
preliminary results for the Company are hugely different from both
the past rates imposed on the Company and the AR3 preliminary
results on our peers. We are vigorously contesting the preliminary
results and have filed Case Brief and Rebuttal Brief for AD with
DOC on January 25, 2017 and
February 3, 2017, respectively. DOC
currently plans to issue its final results for AR3 AD on
April 21, 2017 and AR3 CVD on
May 9, 2017, with the discretion to
extend these dates for up to 60 days. We expect to appeal any
adverse DOC findings, if any, to the U.S. Court of International
Trade.
- Canadian Solar's imports into the U.S. are subject to DOC
AD/CVD orders on solar products incorporating solar cells from
China ("Solar 1") and other solar
products incorporating solar cells from Taiwan ("Solar 2"). Our Solar 1 imports
are currently subject to a cash deposit rate of 8.52% for AD and
20.94% for CVD. In the AR3 of the Solar 1 orders, which cover
the period of review from December 1,
2014 to November 30, 2015 for
AD and from January 1, 2014 to
December 31, 2014 for CVD, DOC
calculated preliminary margins (i.e. duty rates) for Canadian Solar
at 30.42% for AD and 20.98% for CVD. For the details in the
preliminary results for AD published on December 22, 2016 in Federal Register, please see
at
https://www.federalregister.gov/documents/2016/12/22/2016-30854/crystalline-silicon-photovoltaic-cells-whether-or-not-assembled-into-modules-from-the-peoples,
and for CVD published on January 9,
at
https://www.federalregister.gov/documents/2017/01/09/2017-00138/crystalline-silicon-photovoltaic-cells-whether-or-not-assembled-into-modules-from-the-peoples).
- For Solar 2, we are still in the process of assessing the
impact which could be positive or negative. For further
information, for Chinese-origin products subject to the Solar 2
orders, please refer to Federal Register, for AD, at
https://www.federalregister.gov/documents/2017/03/07/2017-04420/certain-crystalline-silicon-photovoltaic-products-from-the-peoples-republic-of-china-preliminary,
and, for CVD, at
https://www.federalregister.gov/documents/2017/03/06/2017-04267/certain-crystalline-silicon-photovoltaic-products-from-the-peoples-republic-of-china-preliminary.
For Taiwan-origin products subject
to the Solar 2 orders, please refer to Federal Register at
https://www.federalregister.gov/documents/2017/03/07/2017-04413/certain-crystalline-silicon-photovoltaic-products-from-taiwan-preliminary-results-of-antidumping.
The above public announcements are the preliminary results from the
first administrative review of the Solar 2 order, in which Canadian
Solar is not participating.
- Canadian Solar has ramped up its production facilities in South
Eastern Asia in the course of 2016 and has not imported solar
products from China to the U.S.,
or using Taiwanese solar cells in its solar products shipped into
the U.S. since February of 2017.
Fourth Quarter 2016 Results
Net revenue in the fourth quarter of 2016 was $668.4 million, up 1.7% from $657.3 million in the third quarter of 2016 and
down 40.3% from $1,120.3 million in
the fourth quarter of 2015. Total solar module shipments in the
fourth quarter of 2016 were 1,612 MW, of which 1,581 MW were
recognized in revenue, compared to 1,161 MW recognized in revenue
in the third quarter of 2016 and 1,398 MW recognized in revenue in
the fourth quarter of 2015. Solar module shipments recognized in
revenue in the fourth quarter of 2016 included 85.6 MW used in the
Company's total solutions business, compared to 16.3 MW in the
third quarter of 2016 and 63.8 MW in the fourth quarter of
2015.
The following table is a summary of net revenue by geographic
region based on the location of customers' headquarters (in
millions of US$, except percentages).
|
Q4
2016
|
Q3
2016
|
Q4
2015
|
US$M
|
%
|
US$M
|
%
|
US$M
|
%
|
The
Americas
|
$138.1
|
20.7
|
$270.2
|
41.1
|
$581.0
|
51.9
|
Asia
|
419.3
|
62.7
|
280.6
|
42.7
|
460.2
|
41.1
|
Europe and
Others
|
111.0
|
16.6
|
106.5
|
16.2
|
79.1
|
7.0
|
Total
|
668.4
|
100
|
657.3
|
100
|
1,120.3
|
100
|
Gross profit in the fourth quarter of 2016 was $49.0 million, compared $117.3 million in the third quarter of 2016 and
$200.5 million in the fourth quarter
of 2015. Gross margin in the fourth quarter of 2016 was 7.3%,
compared to 17.8% in the third quarter of 2016 and 17.9% in the
fourth quarter of 2015. The sequential decrease in gross margin was
primarily due to the significant AD/CVD true-up provision that was
estimated based on the preliminary annual review ("AR3") ruling by
the U.S. Department of Commerce, as well as lower module average
selling price which was partially offset by lower module
manufacturing cost. Excluding $44.1 million AD/CVD true-up
provision, gross margin in the fourth quarter of 2016 would have
been 13.9%. The year-over-year decrease in gross margin was
primarily due to lower module average selling price, higher AD/CVD
charges, and lower contribution from the Company's higher margin
total solutions business, partially offset by lower module
manufacturing cost.
Total operating expenses were $60.7
million in the fourth quarter of 2016, down 32.8% from
$90.3 million in the third quarter of
2016 and down 36.2% from $95.2
million in the fourth quarter of 2015.
Selling expenses were $42.7
million in the fourth quarter of 2016, up 25.9% from
$34.0 million in the third quarter of
2016 and up 8.5% from $39.4 million
in the fourth quarter of 2015. The sequential increase of
$8.7 million was primarily due to an
increase in shipping, handling and storage charges resulting from
an increase in module shipment volume, as well as higher external
sales commission. The year-over-year increase in selling expenses
was primarily due to an increase in labor cost and higher shipping,
handling and storage charges.
General and administrative expenses were $62.8 million in the fourth quarter of 2016, up
19.7% from $52.5 million in the third
quarter of 2016 and up 20.1% from $52.3
million in the fourth quarter of 2015. The sequential
increase in general and administrative expenses was primarily due
to a $16.3 million asset impairment
charge of module production lines in Canada and certain idle assets in China. The year-over-year increase in general
and administrative expenses was primarily due to an increase in
asset impairment charge and higher professional service
fees.
Research and development expenses were $3.2 million in the fourth quarter of 2016,
compared to $4.6 million in the third
quarter of 2016 and $4.8 million in
the fourth quarter of 2015.
Other operating income was $48.1
million in the fourth quarter of 2016, compared to
$0.8 million in the third quarter of
2016 and $1.4 million in the fourth
quarter of 2015. Other operating income in the fourth quarter of
2016 primarily represented a net gain from four projects the
Company sold in Canada and
China.
Loss from operations was $11.8
million in the fourth quarter of 2016, compared to income
from operations of $27.0 million in
the third quarter of 2016, and $105.3
million in the fourth quarter of 2015. Excluding the
$44.1 million AD/CVD true-up
provision, income from operations would have been $32.3 million. Operating margin was negative 1.8%
in the fourth quarter of 2016, compared to 4.1% in the third
quarter of 2016 and 9.4% in the fourth quarter of 2015. Excluding
the $44.1 million AD/CVD true-up
provision, operating margin would have been 4.8%.
Non-cash depreciation and amortization charges were
approximately $19.3 million in the
fourth quarter of 2016, compared to $25.4
million in the third quarter of 2016, and $24.7 million in the fourth quarter of 2015.
Non-cash equity compensation expense was $2.2 million in the fourth quarter of 2016,
compared to $1.8 million in the third
quarter of 2016 and $1.4 million in
the fourth quarter of 2015.
Interest expense was $22.9 million
in the fourth quarter of 2016, compared to $18.8 million in the third quarter of 2016 and
$17.1 million in the fourth quarter
of 2015.
Interest income was $2.4 million
in the fourth quarter of 2016, compared to $2.1 million in the third quarter of 2016 and
$4.2 million in the fourth quarter of
2015.
The Company recorded a gain on change in fair value of
derivatives of $24.2 million in the
fourth quarter of 2016, compared to a gain of $2.0 million in the third quarter of 2016 and a
loss of $9.4 million in the fourth
quarter of 2015. Foreign exchange loss in the fourth quarter of
2016 was $12.5 million compared to a
foreign exchange gain of $4.4 million
in the third quarter of 2016 and a foreign exchange gain of
$11.3 million in the fourth quarter
of 2015.
Income tax benefit was $10.6
million in the fourth quarter of 2016, compared to an income
tax expense of $16 thousand in the
third quarter of 2016 and $31.0
million in the fourth quarter of 2015.
Net loss attributable to Canadian Solar was $13.3 million or $0.23 per diluted share in the fourth quarter of
2016, compared to net income of $15.6
million, or $0.27 per diluted
share, in the third quarter of 2016 and net income of $62.3 million, or $1.05 per diluted share, in the fourth quarter of
2015.
Non-GAAP adjusted net income attributable to Canadian Solar,
which is adjusted to exclude the impact of the AD/CVD true-up
provision, net of income tax effect, was $14.2 million, or $0.24 per diluted share in the fourth quarter of
2016. For a reconciliation of measures presented in accordance with
generally accepted accounting principles in the United States ("GAAP") to the non-GAAP
measures, a table is available at the end of this press
release.
Financial Condition
The Company had $1.01 billion of
cash, cash equivalents and restricted cash as of December 31, 2016, compared to $986.0 million as of September 30, 2016.
Accounts receivable, net of allowance for doubtful accounts, at
the end of the fourth quarter of 2016 were $400.3 million, compared to $350.1 million at the end of the third quarter of
2016. Accounts receivable turnover was 65 days in the fourth
quarter of 2016, compared to 68 days in the third quarter of
2016.
Inventories at the end of the fourth quarter of 2016 were
$295.4 million, compared to
$313.9 million at the end of the
third quarter of 2016. Inventory turnover was 48 days in the fourth
quarter of 2016, compared to 56 days in the third quarter of
2016.
Accounts and notes payable at the end of the fourth quarter of
2016 were $736.8 million, compared to
$801.9 million at the end of the
third quarter of 2016.
Excluding the borrowings included in 'Liabilities
held-for-sale', short-term borrowings at the end of the fourth
quarter of 2016 were $1.60 billion,
compared to $1.51 billion at the end
of the third quarter of 2016, long-term borrowings at the end of
the fourth quarter of 2016 were $493.5
million, compared to $615.8
million at the end of the third quarter of 2016.
The Company had approximately $993.0
million in non-recourse bank borrowings at the end of the
fourth quarter of 2016. Senior convertible notes totaled
$125.6 million at the end of the
fourth quarter of 2016, compared to $125.4
million at the end of the third quarter of 2016. Total
borrowings directly related to utility-scale solar power projects,
which includes $915.2 million of
non-recourse borrowings, were $1.19
billion at the end of the fourth quarter of 2016, compared
to $1.18 billion at the end of the
third quarter of 2016.
Dr. Shawn Qu, Chairman and Chief
Executive Officer of Canadian Solar, remarked: "Results for the
fourth quarter and full year 2016 were inline with our
expectations, other than the unfavorable preliminary ruling on
AD/CVD rates by U.S. Department of Commerce. We achieved record
high total solar module shipments in the fourth quarter and the
full year 2016. Despite strong demand levels, our revenue for both
the fourth quarter and full year was lower compared to the prior
year's periods due to the industry-wide declines in average selling
price that have been persistent all year. We will continue to
work to offset any negative impact of future declines in average
selling price with the introduction of new products and through our
supply chain and manufacturing efficiency programs. Importantly, we
are actively monetizing our operating solar power plant assets.
This includes the recent sale of five operating solar power plants
in Canada for over $310 million (two sales closed in the fourth
quarter of 2016; three additional sales closed in the first quarter
of 2017). In addition, we closed the sales of two operating solar
power plants in China in the
fourth quarter of 2016 for over $32
million. We are also well underway in the sale process of
our operating solar power plants in the U.S. and are targeting
closure in the coming months. We plan to continue to execute on our
strategy in the downstream energy business of developing solar
power projects for sale to end customers, so as to deleverage our
balance sheet and redeploy our capital to support the profitable
growth of our business."
Dr. Huifeng Chang, Senior Vice
President and Chief Financial Officer of Canadian Solar, added:
"Our fourth quarter of 2016 gross margin was impacted by the
significant AD/CVD true-up that was based on the preliminary
Department of Commerce ruling. We plan to vigorously contest the
preliminary results in the final phase of the DOC reviews.
Excluding the AD/CVD adjustment, the gross margin in the fourth
quarter of 2016 would have been 13.9%, which is inline with our
guidance range of 11.0% to 16.0%. We continue to execute on our
cost down model through diligent management of our existing
manufacturing and supply chain assets, while enhancing our cost
profile and competitive position with the selective expansion of
our state-of-the-art manufacturing capacity. We expect to be even
more vertically integrated and geographically diversified as we
seek to maintain our industry leading cost position. During the
quarter, we successfully restored two cell production lines, with a
total capacity of 240 MW, at our Funing cell factory, which had
previously been damaged by a tornado in June of 2016. We expect to
restore an additional 1.2 GW by the end of the first half of 2017.
The construction of our new 850 MW cell plant in Southeast Asia was completed in February 2017 and production is ramping up. All
of the equipment we are installing in our new cell factories
features the latest production technologies, which gives us further
cost and efficiency advantages and the desired capacity customers
are seeking, while allowing us to sunset less efficient, legacy
capacity."
Utility-Scale Solar Project Pipeline
The Company divides its utility-scale solar project pipeline
into two parts: an early-to-mid-stage pipeline and a late-stage
pipeline. The late-stage pipeline includes primarily projects
that have energy off-take agreements and are expected to be built
within the next two to four years. The Company cautions that
some late-stage projects may not reach completion due to such risks
as failure to secure permits and grid connection, among others
.
Late-Stage Utility-Scale Solar Project Pipeline
As of February 28, 2017, the
Company's late-stage solar project pipeline, including those in
construction, totaled approximately 2.1 GWp, which included 538.5
MWp in Japan, 401 MWp in the U.S.,
400 MWp in China, 399 MWp in
Brazil, 132 MWp in India, 118 MWp in Australia, 68 MWp in Mexico, 26 MWp in the United Kingdom and 6 MWp in Africa.
In the United States, as
previously announced, four projects (Astoria, Astoria 2, Garland
and Roserock) totaling 715 gross MWp commenced commercial operation
in the fourth quarter of 2016. In addition, the new late-stage 92
MWp IS 42 project acquired during the quarter is in construction
and expected to reach commercial operation by the end of 2017. Two
other projects (Tranquillity 8 and Gaskell West 1) are currently
under development and are expected to reach commercial operation
before the end of December 2018.
In January 2017, the Company
announced the signing of a 20-year Power Purchase Agreement ("PPA")
for 60 MWac of solar power plant Tranquillity 8 Verde with the
Sacramento Municipal Utility District ("SMUD"). Construction of the
project, located in Fresno County,
California, is expected to begin in mid-2017 and will begin
delivering power to SMUD by early 2018. Tranquillity 8 Verde is
part of the 281 MWdc Tranquillity 8 Project. The remaining volume
will be purchased by MCE, Pacific Gas & Electric ("PG&E")
and Southern California Edison ("SCE") under long-term power
purchase agreements.
In the fourth quarter of 2016, the Company executed a 20-year
PPA for 28 MWdc of solar power plant Gaskell West 1 with SCE.
Construction of the project is expected to begin in late 2017 and
will begin delivering power to SCE by mid-2018. Gaskell West 1 is
part of the 175 MWdc Gaskell West project located in Kern County, California.
The Company's late-stage, utility-scale solar project pipeline
in the U.S. as of February 28, 2017
is detailed in the table below.
Project
|
MWp
|
Location
|
Status
|
Expected
COD
|
Tranquillity
8
|
281
|
Fresno county,
CA
|
Development
|
2018
|
Gaskell West
1
|
28
|
Kern county,
CA
|
Development
|
2018
|
IS42
|
92
|
Fayetteville,
NC
|
Construction
|
2017
|
Total
|
401
|
|
|
|
In Japan, during the fourth
quarter of 2016, the Company started commercial operation of three
solar power plants, with a total capacity of approximately 37 MWp,
bringing the total MW of solar power plants in commercial operation
to 59.5 MWp. As of February 28, 2017,
the Company's pipeline of late-stage utility-scale solar power
projects totaled approximately 538.5 MWp, including 211.8 MWp in
construction and 14.8 MWp at the ready-to-build stage. The expected
commercial operation schedule of the Company's late stage, utility
Âscale solar power projects in Japan as of February
28, 2017 is detailed in the table below.
Expected COD
Schedule (MWp)
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
and
Thereafter
|
|
Total
|
105.5
|
|
118
|
|
112
|
|
126
|
|
77
|
|
538.5
|
As of February 28, 2017, Canadian
Solar executed interconnection agreements for 375 MWp of projects
that are in construction and under development. Since January 1, 2017, Canadian Solar executed
interconnection agreements for 21.49 MWp of projects. The Company
expects that, by April 1, 2017, it
will have executed interconnection agreements for an additional
28.0 MWp of projects, thereby securing the existing feed-in-tariff
contract subject to meeting the commercial operation date (COD)
deadline. Projects with a total capacity of 71.4 MWp will
participate in a bid for a utility upgrades and will keep their
current FIT while the bid process is underway. It is expected
interconnection agreements for 43.5 MWp of projects will not be
signed by April 1, 2017 and those
projects will lose their current FIT.
In Brazil, the Company's
late-stage, utility-scale solar project pipeline as of February 28, 2017 is detailed in the table
below.
Project
|
MWp
|
Location
|
Status
|
Expected
COD
|
Pirapora
I*
|
192
|
Brazil
|
Construction
|
2017
|
Pirapora
II
|
115
|
Brazil
|
Development
|
2018
|
Pirapora III
(formerly
Vazante)
|
92
|
Brazil
|
Development
|
2017
|
Total
|
399
|
|
|
|
* The Company completed the sale of 80% interest in Pirapora I
in the fourth quarter of 2016. And Canadian Solar supplies the
modules for this project.
In January 2017, the Company
announced that it received $20
million in unsecured funding from the China and Portuguese-speaking Countries
Cooperation and Development Fund ("CPD Fund") to support the
development of eligible projects in Brazil, including the 192 MWp Pirapora I
Project in the state of Minas Gerais.
Solar Power Plants in Operation
In addition to its late stage, utility scale solar project pipeline, the Company
had a portfolio of solar power plants in operation totaling 1,195.5
MWp as of February 28, 2017. The
resale value of these plants is estimated at approximately
$1.6 billion. For the Company's tax
equity deal projects in the U.S., only class B share value of the
projects was included in the aforementioned resale value. The
Company cautions, however, that market conditions may change
resulting in different sale values if and when the Company
ultimately sells these plants.
The sale of projects recorded as 'Project assets' (build Âto Âsell) on the balance sheet will
be recorded as revenue once revenue recognition criteria are met,
and the gain from sale of projects recorded as 'Assets
held-for-sale' and 'Solar power systems, net' (build to own) on the balance sheet will
be recorded within 'Other operating income (expenses)' in the
income statement.
The Company's total portfolio of solar power plants in operation
as of February 28, 2017 is detailed
in the table below.
Plants in
Operation (MWp)
|
U.S.
|
Japan
|
U.K.
|
China
|
Other
|
Total
|
808
|
59.5
|
125
|
198
|
5
|
1,195.5
|
Manufacturing Capacity
The Company plans to expand its ingot, wafer, cell and module
capacities by December 31, 2017 to
1.7 GW, 4.0 GW, 4.49 GW and 6.97 GW, respectively.
|
Manufacturing
Capacity Roadmap (MW)
|
|
31-Dec-16
|
30-Jun-17
|
31-Dec-17
|
Ingot
|
400
|
1,200
|
1,700
|
Wafer
|
1,000
|
2,000
|
4,000
|
Cell
|
2,440
|
4,490
|
4,490
|
Module
|
6,170
|
6,970
|
6,970
|
The Company plans to increase its ingot manufacturing capacity
to 1.7 GW by December 31, 2017 in
order to reduce the purchase cost of ingots and thus reduce its
all-in module manufacturing costs.
The Company's wafer manufacturing capacity is expected to reach
2.0 GW by June 30, 2017 and 4.0 GW by
December 31, 2017, all of which will
use diamond wire-saw technology. Diamond wire-saw technology works
compatibly with the Company's proprietary and highly efficient Onyx
black silicon multi-crystalline solar cell technology, reducing
silicon usage and therefore manufacturing cost.
The Company's solar cell manufacturing capacity as of
December 31, 2016 was 2.44 GW. The
Company restored two cell production lines, with a total capacity
of 240 MW, at its Funing cell factory in December 2016. The Company expects to restore an
additional 480 MW and 720 MW cell capacity at its Funing cell
factory in March and June 2017,
respectively. Construction of the Company's new 850 MW cell plant
in Southeast Asia was completed in
February of 2017 and production started to ramp up in March of
2017. The Company's cell manufacturing capacity is expected to
reach 4.49 GW by June 30, 2017.
The Company expects that its total worldwide internal module
capacity will reach approximately 7.0 GW by June 30, 2017.
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 and the global financing
environment. It is also subject to uncertainty relating to customer
final demand and solar project construction schedule. Management's
views and estimates are subject to change without notice.
For the first quarter of 2017, the Company expects total solar
module shipments to be in the range of approximately 1.15 GW to 1.2
GW, including approximately 120 MW of shipments to the Company's
utility-scale solar power projects that may not be recognized as
revenue in first quarter 2017. Total revenue for the first quarter
of 2017 is expected to be in the range of $570 million to $590 million. Gross margin for
the first quarter is expected to be between 13% and 15%.
For the full year 2017, the Company expects total module
shipments to be in the range of approximately 6.5 GW to 7.0 GW,
with approximately 6.17 GW recognized in revenue. The Company
expects to connect (COD) approximately 1 GW to 1.2GW of new solar
projects globally in 2017. These projects are located in the U.S.,
Japan, China, UK, India, Brazil
and Africa. Total revenue for the
full year 2017 is expected to be in the range of $4.0 billion to $4.2 billion. We expect 50% to
60% of the total full year 2017 revenue to come from our Solar
Module and Components Business, while the balance will come from
our Energy Business. The Energy Business revenue will mainly come
from monetization of the Company's high quality solar power plant
assets in the U.S., Japan,
China, UK and Brazil. The Company expects its cost of
production will decrease throughout the year as new internal wafer,
cell and module capacity comes online, both inside and outside
China, and the percentage of
external purchases and OEM is reduced. Management expects that the
increase in vertical integration along the manufacturing steps will
help the Company maintain or improve its gross margin.
Recent Developments
On February 6, 2017, Canadian
Solar announced that it completed the sale of three utility-scale
solar farms, SSM 1 Solar ULC, SSM 2 Solar ULC, and SSM 3 Solar ULC,
totaling 59.8 MW AC ("SSM Portfolio") to Fengate SSM Holdco LP, an
affiliate of Fengate Real Asset Investments, for over C$257 million ($195.32
million). The transaction was closed on February 1, 2017 and the Company expects to
recognize the difference between the sale proceeds and the book
value of the projects under 'Other income (expenses)' in the income
statement for the first quarter of 2017.
On January 26, 2017, Canadian
Solar announced the sale of 30 MWp of solar modules to Wirsol's 30
MWp solar photovoltaic (PV) power plant in Delfzijl, Netherlands.
On January 24, 2017, Canadian
Solar announced that Recurrent Energy, a wholly owned subsidiary
and leading solar project developer in the U.S., signed a 20-year
PPA for 60 MWac of solar power plant with the Sacramento Municipal
Utility District (SMUD).
On January 18, 2017, Canadian
Solar announced that it started commercial operation of two solar
PV power plants, totaling 12.7 MWp in Japan (the 10.2 MWp Aomori Solar Power Plant
in Rokunohe Town, Aomori Prefecture and the 2.5 MWp Saitama Minano
Power Plant in Minano Town, Saitama
Prefecture).
On January 17, 2017, Canadian
Solar announced that Recurrent Energy, a wholly owned subsidiary,
energized commercial operation of the adjacent 100 MWac/131 MWp
Astoria and 75 MWac/100 MWp Astoria 2 solar projects located in
Kern County, California.
On January 5, 2017, Canadian Solar
announced that Canadian Solar Solutions Inc., a wholly owned
subsidiary, completed the sale of its 10 MW AC BeamLight LP
("BeamLight") and its 10 MW AC Alfred solar power plants to 9285806
Canada Inc. and Concord BeamLight GP2 Ltd., affiliates of Concord
Green Energy Inc. for over C$152.5
million ($115 million).
The transaction closed on December 29,
2016 and the Company recognized the difference between the
sales proceeds and the book value of the projects under 'Other
income (expenses)' in the income statement for the fourth quarter
of 2016.
On January 3, 2017, Canadian Solar
announced that CSI New Energy Holding Co., Ltd., a wholly owned
subsidiary, completed the sale of two solar power plants in
Jiangsu Province, China to Shenzhen Energy Nanjing Holding Co.,
Ltd., a member of Shenzhen Energy Group Co., Ltd., for
approximately RMB223.48 million
($32.2 million). The
transactions closed on December 30,
2016 and the Company recognized the difference between the
sales proceeds and the book value of the projects under 'Other
income (expenses)' in the income statement for the fourth
quarter of 2016.
On December 19, 2016, Canadian
Solar announced that it secured GBP49.3
million ($62.8 million) in
non-recourse term loan facilities to refinance a portfolio of ten
solar power plants, with total capacity of 50 MW, in the
United Kingdom. National
Westminster Bank, a subsidiary of RBS Group, provided the 18.7 year
term facility. Part of the proceeds will be used to repay a
construction loan of GBP 28.1 million
($35.8 million).
On December 14, 2016, Canadian
Solar announced the commercial operation of the 200 MWac/272 MWp
Garland Solar Facility in California. The Garland Solar Facility was
developed by Recurrent Energy and its majority interests are owned
by Southern Company subsidiary Southern Power.
On December 12, 2016, Canadian
Solar announced the commencement of solar module manufacturing in
Sorocaba, Brazil. The new state-of-the-art manufacturing
facility will be Brazil's largest,
with 380 MW annual capacity of made-in-Brazil solar modules.
On December 5, 2016, Canadian
Solar announced that it closed JPY14.9
billion ($141.5 million)
senior and subordinate non-recourse term loan facilities to finance
the construction and operation of a 55 MWp solar power plant in the
Yamaguchi prefecture, Japan. The facilities were arranged by
Hanwha Asset Management and have a maturity of 17 years.
Conference Call Information
The Company will hold a conference call on Tuesday, March 21, 2017 at 8:00 a.m. U.S. Eastern Daylight Time
(8:00 p.m., March 21, 2017 in Hong
Kong) to discuss the Company's fourth quarter and full year
2016 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 HK) or +1 845 675 0437 from
international locations. The passcode for the call is
78404635. 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 4 hours after the
conclusion of the call until 9:00
a.m. on Wednesday, March 29,
2017, U.S. Eastern Daylight Time (9:00 p.m., March 29,
2017 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 HK) or +1 646 254 3697 from
international locations, with passcode 78404635. A webcast
replay will also be available on the Investor Relations section of
Canadian Solar's website at www.canadiansolar.com.
About Canadian Solar Inc.
Founded in 2001 in Canada,
Canadian Solar is one of the world's largest and foremost solar
power companies. As a leading manufacturer of solar photovoltaic
modules and provider of solar energy solutions, Canadian Solar also
has a geographically diversified pipeline of utility-scale power
projects in various stages of development. In the past 16years,
Canadian Solar has successfully delivered over 18 GW of premium
quality modules to over 90 countries around the world. Furthermore,
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, business prospects
and future quarterly or annual results, particularly the management
quotations and the statements in the "Business Outlook" section,
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;
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 and China; 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; 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 20, 2016. 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.
Investor Relations Contacts:
Mary Ma
Senior
Supervisor, Investor Relations
Canadian Solar
Inc.
investor@canadiansolar.com
|
David
Pasquale
Global IR
Partners
Tel:
+1-914-337-8801
csiq@globalirpartners.com
|
FINANCIAL TABLES FOLLOW
Canadian Solar
Inc.
|
Unaudited
Condensed Consolidated Statement of Operations
|
(In Thousands of
US Dollars, Except Share And Per Share Data And Unless Otherwise
Stated)
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31
|
|
September
30
|
|
December
31
|
|
December
31
|
|
December
31
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
revenues
|
$
668,428
|
|
$
657,323
|
|
$
1,120,278
|
|
$
2,853,078
|
|
$
3,467,626
|
Cost of
revenues
|
619,472
|
|
540,030
|
|
919,826
|
|
2,435,890
|
|
2,890,856
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
48,956
|
|
117,293
|
|
200,452
|
|
417,188
|
|
576,770
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
42,749
|
|
33,965
|
|
39,384
|
|
145,367
|
|
149,710
|
General and
administrative
expenses
|
62,838
|
|
52,510
|
|
52,323
|
|
203,789
|
|
168,025
|
Research and development
expenses
|
3,204
|
|
4,646
|
|
4,818
|
|
17,407
|
|
17,056
|
Other operating income,
net
|
(48,074)
|
|
(797)
|
|
(1,357)
|
|
(42,539)
|
|
(5,392)
|
Total operating
expenses, net
|
60,717
|
|
90,324
|
|
95,168
|
|
324,024
|
|
329,399
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
(11,761)
|
|
26,969
|
|
105,284
|
|
93,164
|
|
247,371
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
(22,897)
|
|
(18,807)
|
|
(17,065)
|
|
(69,723)
|
|
(54,148)
|
Interest income
|
2,381
|
|
2,077
|
|
4,209
|
|
10,236
|
|
16,831
|
Gain (loss) on change in
fair value
of derivatives
|
24,246
|
|
2,044
|
|
(9,391)
|
|
27,322
|
|
(12,196)
|
Foreign exchange gain
(loss)
|
(12,487)
|
|
4,446
|
|
11,289
|
|
25,406
|
|
22,882
|
Investment income
(loss)
|
(971)
|
|
(1,719)
|
|
-
|
|
(1,532)
|
|
2,342
|
Gain on repurchase of
convertible
notes
|
-
|
|
322
|
|
-
|
|
2,782
|
|
-
|
Others
|
-
|
|
-
|
|
-
|
|
-
|
|
389
|
Other expenses,
net
|
(9,728)
|
|
(11,637)
|
|
(10,958)
|
|
(5,509)
|
|
(23,900)
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
and equity in loss of
unconsolidated investees
|
(21,489)
|
|
15,332
|
|
94,326
|
|
87,655
|
|
223,471
|
Income tax benefit
(expense)
|
10,598
|
|
(16)
|
|
(30,985)
|
|
(17,976)
|
|
(49,512)
|
Equity in loss of
unconsolidated
investees
|
(2,885)
|
|
(131)
|
|
(1,012)
|
|
(4,404)
|
|
(643)
|
Net income
(loss)
|
(13,776)
|
|
15,185
|
|
62,329
|
|
65,275
|
|
173,316
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss)
attributable to non-controlling
interests
|
(448)
|
|
(429)
|
|
31
|
|
26
|
|
1,455
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to
Canadian Solar Inc.
|
$(13,328)
|
|
$
15,614
|
|
$
62,298
|
|
$
65,249
|
|
$
171,861
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share - basic
|
(0.23)
|
|
$
0.27
|
|
$
1.11
|
|
$
1.13
|
|
$
3.08
|
Shares used in
computation - basic
|
57,806,597
|
|
57,778,388
|
|
55,942,143
|
|
57,524,349
|
|
55,728,903
|
Earnings (loss) per
share - diluted
|
(0.23)
|
|
$
0.27
|
|
$
1.05
|
|
$
1.12
|
|
$
2.93
|
Shares used in
computation - diluted
|
57,806,597
|
|
58,276,183
|
|
60,339,702
|
|
58,059,063
|
|
60,426,056
|
Canadian Solar
Inc.
|
Unaudited
Condensed Consolidated Statement of Comprehensive
Income
|
(In Thousands of
US Dollars)
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31
|
|
September
30
|
|
December
31
|
|
December
31
|
|
December
31
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net Income
(loss)
|
(13,776)
|
|
15,185
|
|
62,329
|
|
65,275
|
|
173,316
|
Other
comprehensive income (net of tax of
nil):
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
(42,554)
|
|
(11,227)
|
|
(6,739)
|
|
(41,786)
|
|
(75,687)
|
Gain (loss) on
commodity hedge
|
13,314
|
|
1,174
|
|
(13)
|
|
12,622
|
|
2,078
|
Gain (loss) on
interest rate swap
|
1,206
|
|
589
|
|
-
|
|
(164)
|
|
-
|
Comprehensive
income (loss)
|
(41,810)
|
|
5,721
|
|
55,577
|
|
35,947
|
|
99,707
|
Less: comprehensive
income (loss)
attributable to non-controlling interests
|
1,088
|
|
(581)
|
|
4,294
|
|
2,656
|
|
7,759
|
Comprehensive
income (loss) attributable
to Canadian Solar Inc.
|
(42,898)
|
|
6,302
|
|
51,283
|
|
33,291
|
|
91,948
|
Canadian Solar
Inc.
|
Unaudited
Condensed Consolidated Balance Sheet
|
(In Thousands of
US Dollars)
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
2016
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
511,039
|
|
$
480,868
|
|
$
553,079
|
Restricted cash -
current
|
487,516
|
|
502,223
|
|
534,707
|
Accounts receivable trade,
net
|
400,251
|
|
350,058
|
|
426,803
|
Accounts receivable,
unbilled
|
3,425
|
|
4,425
|
|
8,206
|
Amounts due from related
parties
|
19,082
|
|
103,272
|
|
104,579
|
Inventories
|
295,371
|
|
313,869
|
|
334,489
|
Value added tax
recoverable
|
55,680
|
|
41,490
|
|
44,615
|
Advances to suppliers -
current
|
29,312
|
|
31,395
|
|
31,886
|
Derivative assets -
current
|
12,270
|
|
3,785
|
|
6,259
|
Project assets -
current
|
1,317,902
|
|
1,181,997
|
|
111,317
|
Assets
held-for-sale
|
392,089
|
|
529,210
|
|
-
|
Prepaid expenses and other
current assets
|
266,826
|
|
226,344
|
|
108,153
|
Total current
assets
|
3,790,763
|
|
3,768,936
|
|
2,264,093
|
Restricted cash -
non-current
|
9,145
|
|
2,883
|
|
46,897
|
Property, plant and
equipment, net
|
462,345
|
|
431,716
|
|
331,052
|
Solar power systems,
net
|
112,062
|
|
436,043
|
|
1,200,441
|
Deferred tax assets,
net
|
229,980
|
|
118,270
|
|
97,134
|
Advances to suppliers
–non-current
|
54,080
|
|
99,618
|
|
27,745
|
Prepaid land use
right
|
48,651
|
|
29,061
|
|
29,092
|
Investments in
affiliates
|
368,459
|
|
141,841
|
|
187,131
|
Intangible assets,
net
|
8,422
|
|
9,115
|
|
78,938
|
Goodwill
|
7,617
|
|
7,617
|
|
7,609
|
Derivatives assets -
non-current
|
15,446
|
|
1,927
|
|
2,072
|
Project assets -
non-current
|
182,391
|
|
48,817
|
|
2,814
|
Other non-current
assets
|
117,245
|
|
129,870
|
|
142,236
|
TOTAL
ASSETS
|
$
5,406,606
|
|
$
5,225,714
|
|
$
4,417,254
|
Current
liabilities:
|
|
|
|
|
|
Short-term
borrowings
|
$
1,600,033
|
|
$
1,510,087
|
|
$
1,156,576
|
Accounts and notes
payable
|
736,779
|
|
801,882
|
|
985,757
|
Amounts due to related
parties
|
19,912
|
|
12,057
|
|
90,002
|
Other payables
|
223,584
|
|
224,726
|
|
151,174
|
Short-term commercial
paper
|
131,432
|
|
134,602
|
|
-
|
Advances from
customers
|
90,101
|
|
53,232
|
|
76,207
|
Derivative liabilities -
current
|
9,625
|
|
7,764
|
|
35,228
|
Current maturities of
capital lease obligation
|
58,947
|
|
58,896
|
|
8,712
|
Liabilities
held-for-sale
|
279,272
|
|
356,294
|
|
-
|
Other current
liabilities
|
571,381
|
|
233,062
|
|
152,668
|
Total current
liabilities
|
3,721,066
|
|
3,392,602
|
|
2,656,324
|
Accrued warranty
costs
|
61,139
|
|
66,377
|
|
65,193
|
Convertible
notes
|
125,569
|
|
125,352
|
|
150,000
|
Long-term
borrowings
|
493,455
|
|
615,830
|
|
606,577
|
Derivatives
liabilities - non-current
|
-
|
|
2,163
|
|
17,358
|
Liability for
uncertain tax positions
|
8,431
|
|
6,713
|
|
14,468
|
Deferred tax
liabilities - non-current
|
23,348
|
|
8,238
|
|
19,030
|
Loss contingency
accruals
|
22,654
|
|
24,117
|
|
23,500
|
Long-term capital
lease obligation
|
24,720
|
|
33,993
|
|
17,728
|
Other non-current
liabilities
|
26,834
|
|
12,223
|
|
14,566
|
Total
LIABILITIES
|
4,507,216
|
|
4,287,608
|
|
3,584,744
|
Equity:
|
|
|
|
|
|
Common shares
|
701,283
|
|
700,959
|
|
677,103
|
Additional paid-in
capital
|
(8,897)
|
|
(11,481)
|
|
(17,139)
|
Retained earnings
|
284,109
|
|
297,437
|
|
218,860
|
Accumulated other
comprehensive loss
|
(91,814)
|
|
(62,244)
|
|
(59,856)
|
Total Canadian
Solar Inc. shareholders' equity
|
884,681
|
|
924,671
|
|
818,968
|
Non-controlling
interests in subsidiaries
|
14,709
|
|
13,435
|
|
13,542
|
TOTAL
EQUITY
|
899,390
|
|
938,106
|
|
832,510
|
TOTAL LIABILITIES
AND EQUITY
|
$
5,406,606
|
|
$
5,225,714
|
|
$
4,417,254
|
About Non-GAAP Financial Measures
To supplement its financial disclosures presented in accordance
with GAAP, the Company uses non-GAAP measures which are adjusted
from the most comparable GAAP measures for certain items as
described below. The Company presents non-GAAP net income and
diluted earnings per share so that readers of the press release can
better understand the underlying operating performance of the
business before the impact of the AD/CVD true-up provision in the
fourth quarter of 2016. The non-GAAP numbers are not measures of
financial performance under U.S. GAAP, and should not be considered
in isolation or as an alternative to other measures determined in
accordance with GAAP. These non-GAAP measures may differ from
non-GAAP measures used by other companies, and therefore their
comparability may be limited.
Reconciliation of
U.S. GAAP to Non-GAAP financial measures
|
Statement of
Operations Data:
|
(In
Thousands, except per share amounts)
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
December 31,
2016
|
December 31,
2016
|
|
|
|
Net income (loss)
attributable to Canadian Solar Inc.
|
$
(13,328)
|
$
65,249
|
AD/CVD true-up
provision
|
44,126
|
44,126
|
Income tax
effect
|
(16,631)
|
(16,631)
|
Non-GAAP net income
attributable to Canadian Solar Inc.
|
$
14,167
|
$
92,744
|
Shares used in
computation – diluted
|
58,092,689
|
58,059,063
|
GAAP earnings (loss)
per share-diluted
|
$
(0.23)
|
$
1.12
|
Non-GAAP earnings per
share-diluted
|
$
0.24
|
$
1.60
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/canadian-solar-reports-fourth-quarter-and-full-year-2016-results-300426851.html
SOURCE Canadian Solar Inc.