GUELPH, ON, Aug. 7, 2020
/PRNewswire/ -- Canadian Solar Inc. ("Canadian Solar" or
the "Company") (NASDAQ: CSIQ) today announced financial results for
the quarter ended June 30, 2020.
Second Quarter 2020 Highlights
- 31% sequential increase in total module shipments to 2.9 GW,
exceeding guidance of 2.5 GW to 2.7 GW.
- Net revenue of $696 million
exceeding guidance of $630 million to
$680 million.
- Gross margin of 21.2% exceeding guidance of 18.5% to
20.5%.
- 17% reduction in operating expenses compared to the second
quarter of 2019.
- Net income attributable to Canadian Solar of $20.6 million or $0.34 per diluted share.
- Updated shipment guidance to 11 GW to 12 GW for 2020, and 18 GW
to 20 GW for 2021.
Dr. Shawn Qu, Chairman
and CEO, commented, "Despite challenging market conditions,
second quarter results exceeded expectations both on revenue and
profits. Over the past 19 years, we have built a strong foundation
and track record based on technology innovation, all-around product
execution, robust customer channels and prudent capital deployment.
This foundation has helped us to dynamically adjust to changing
market environments and consistently deliver a market-leading
return on capital and equity.
Last week, we announced the plan to list our Module and System
Solutions ("MSS") business on China's stock market. If successful, it will
give us greater access to additional, lower-cost sources of capital
and allow us to grow faster at a time when we believe growth in the
solar industry and market consolidation are both set to accelerate.
We have started the pre-IPO capital
raising process to bring in new partners to our MSS business and
convert it into a Sino-foreign joint stock company, which is
required by Chinese security regulations for listing in
China's stock market. This
investment round is expected to be completed by the end of
September, and will also allow us to immediately expand our
manufacturing capacity using the best available technologies and
equipment to support our newly set module shipment plan for
2021.
In addition, we believe the
listing will help us unlock value for shareholders by addressing
our valuation gap relative to China-listed solar companies. Meanwhile, as a
Canadian-based global company, we remain fully committed to our
NASDAQ listing and remain focused on expanding our Energy business
worldwide by growing our high-quality project pipeline and sales,
and increasing our partial ownership of select solar and storage
projects."
Yan Zhuang, President and
COO, said, "We are benefiting from a demand rebound across most
of our markets, with our order backlog for the second half of 2020
and even next year already exceeding our previous expectations.
While the current polysilicon supply disruption and shortage
presents a near-term challenge, we are positioning ourselves for
long-term growth. On the one hand, we will expand capacity and increase the level of vertical integration
in our module business, which will allow us to capture more global
market share, enhance pricing power, control costs and improve
profitability in an industry that is rapidly consolidating. On the
other hand, we are building our technological capabilities in the
solar PV plus storage space, gearing up for new growth
opportunities as adoption of clean solar energy accelerates."
Dr. Huifeng Chang, Senior VP
and CFO, added, "As the industry demand and capital market
conditions are both improving, we are working to strike a balance
between investing for long-term growth and preserving cash. In the
near term, uncertainties remain around the impact of the ongoing
pandemic, geopolitical and policy risks. In the medium- to
longer-term, the plan to list our MSS
business in China's stock
market will give us the additional resources to deliver
higher future earnings growth and return on capital. We remain
disciplined in our capital allocation decisions, as always, and
will continue to monitor the market and adjust to changes."
Second Quarter 2020 Results
Total module shipments in the second quarter of 2020 increased
to 2,905 MW from 2,214 MW in the first quarter of 2020, and 2,143
MW in the second quarter of 2019. Growth in shipments was driven by
moderate market share gains. Of the total, 281 MW was
shipped to the Company's utility-scale solar power projects in
the second quarter of 2020.
Net revenue in the second quarter of 2020 was $696 million, compared to $826 million in the first quarter of 2020, and
$1,036 million in the second quarter
of 2019. Growth in module shipments and EPC service revenues were
offset by lower average module selling prices ("ASP") and limited
project sales. Project execution and sales schedules have been
delayed due to the impact of COVID-19. That said, the Company is
making headway and recently announced the financial closing of the
367 MWp Maplewood projects in
Texas, for example.
Gross profit in the second quarter of 2020 was $147 million, compared to $223 million in the first quarter of 2020, and
$183 million in the second quarter of
2019. Gross margin in the second quarter of 2020 was 21.2%,
compared to 27.0% in the first quarter of 2020, and 17.6% in the
second quarter of 2019. Gross margin was 18.2% excluding the
benefit of a U.S. anti-dumping ("AD") and countervailing
duty ("CVD") true-up of $20.4 million. The lower gross margin
was anticipated given the significant decline in ASPs, partially
offset by lower manufacturing costs.
Income from operations in the second quarter of 2020 was
$45 million, compared to $113
million in the first quarter of 2020, and $61 million in the second quarter of 2019. The
decline was partially offset by a 17% year-over-year reduction in
the Company's operating expenses to $102
million in the second quarter of 2020.
Non-cash depreciation and amortization charges in the second
quarter of 2020 were $48 million, compared to $45 million in the first quarter of 2020, and
$40 million in the second quarter of
2019.
Net foreign exchange loss in the second quarter was $4.5 million, compared to a net loss of
$1 million in the first quarter of
2020 and a net gain of $4 million in
the second quarter of 2019. The higher foreign exchange loss was
mainly due to unfavorable moves in the Brazilian Real and the Thai
Baht.
Income tax expense in the second quarter of 2020 was
$9 million, compared to an income tax
benefit of $29 million in the first
quarter of 2020 and an income tax expense of $14 million in the second quarter of 2019.
Net income attributable to Canadian Solar in the second quarter
of 2020 was $20.6 million, or
$0.34 per diluted share, compared to
net income of $110.6 million, or
$1.84 per diluted share in the first
quarter of 2020, and net income of $62.7
million, or $1.04 per diluted
share in the second quarter of 2019.
Net cash used in operating activities in the second quarter of
2020 was approximately $114 million,
compared to $105 million in the first
quarter of 2019.
Module and System Solutions (MSS) Business Segment
Manufacturing Capacity
The table below sets forth the
Company's manufacturing capacity expansion plan until September 30, 2020. The Company is working on its
new 2021 capacity expansion plans and will provide an update in the
next quarter.
Manufacturing
Capacity (MW)
|
|
|
|
|
|
June 30,
2020
Actual
|
September 30,
2020
Planned
|
December 31,
2020
Planned
|
Ingot
|
1,850
|
1,920
|
1,920
|
Wafer
|
5,000
|
5,000
|
5,500
|
Cell
|
9,700
|
10,050
|
10,150
|
Module
|
13,950
|
14,010
|
16,060
|
The Company's manufacturing capacity expansion plan is subject
to change based on market conditions and the Company's capital
allocation plan.
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
|
|
Six Months
Ended
|
|
June 30,
2020
|
March 31,
2020
|
June 30,
2019
|
|
June 30,
2020
|
June 30,
2019
|
Net
revenues
|
706,155
|
689,799
|
673,116
|
|
1,395,954
|
1,142,017
|
Cost of
revenues
|
557,263
|
540,931
|
519,376
|
|
1,098,194
|
889,040
|
Gross
profit
|
148,892
|
148,868
|
153,740
|
|
297,760
|
252,977
|
Operating
expenses
|
85,670
|
87,370
|
95,303
|
|
173,040
|
173,799
|
Income (loss) from
operations
|
63,222
|
61,498
|
58,437
|
|
124,720
|
79,178
|
Gross
margin
|
21.1%
|
21.6%
|
22.8%
|
|
21.3%
|
22.2%
|
Operating
margin
|
9.0%
|
8.9%
|
8.7%
|
|
8.9%
|
6.9%
|
|
|
|
|
|
|
|
*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 reflect 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)
|
|
Q2
2020
|
% of Net
Revenues
|
|
Q1
2020
|
% of Net
Revenues
|
|
Q2
2019
|
% of Net
Revenues
|
Asia
|
261
|
39
|
|
175
|
30
|
|
236
|
36
|
Americas
|
215
|
32
|
|
252
|
43
|
|
181
|
27
|
Europe and
others
|
193
|
29
|
|
161
|
27
|
|
244
|
37
|
Total
|
669
|
100
|
|
588
|
100
|
|
661
|
100
|
|
|
|
|
|
|
|
|
|
*Excludes sales
from the MSS business to the Energy business.
|
Canadian Solar shipped 2.9 GW of modules to more than 80
countries in the second quarter of 2020. The top five markets of
the MSS business ranked by revenues were the U.S., Japan, China,
Spain and Australia.
Multi-crystalline modules accounted for 65% of the Company's
module shipments in the second quarter of 2020, and
mono-crystalline modules accounted for 35%. The Company has the
flexibility to produce both multi-crystalline and mono-crystalline
modules, with the mix decision depending on the relative
profitability and levelized cost of electricity ("LCOE") of the
alternative products.
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 a current total project backlog and pipeline of
15.1 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 accelerating capital turnover into
developing new solar projects. An example of this is the Canadian
Solar Infrastructure Fund ("CSIF"), a publicly traded investment
fund akin to a real estate investment trust, holding operating
solar assets in Japan. CSIF has
been listed on the Tokyo Stock Exchange since 2017 and remains
15%-owned by the Company. In addition to continuing to grow its
project backlog and pipeline, the Company is evaluating ways to
replicate its successful Japanese strategy in other markets,
focusing on those regions with strong energy demand,
attractive power prices and project returns, and stable capital
markets. There are two key benefits to this approach:
- It will permit 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 are to achieve the following project sales
and accumulated project ownership retained in 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
|
~30
|
~130
|
~410
|
~760
|
~960
|
Note: There are
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 finance this business strategy, the Company is
evaluating ways to create capital partnerships with investors
seeking long-term stable cash flows through investments in clean,
profitable and countercyclical solar energy infrastructure
investments, via public or private investment vehicles. Given the
low interest rate environment, management believes the Company's
solar assets are highly attractive to investors seeking stable
yields, which will help build sustainable long-term value for
Canadian Solar's shareholders. The Company will make further
progress updates as it executes on this strategy.
Project Backlog and Pipeline
As of June 30, 2020, the Company's
total project backlog and pipeline totaled 15.1 GWp, of which the
project backlog totaled 4.2 GWp. The backlog includes projects that
have passed their Cliff Risk Date and are expected to be built in
the next one to four years. A project's Cliff Risk 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 the receipt of all 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 project pipeline totaled 10.9 GWp as of
June 30, 2020. The pipeline includes
early- to mid-stage project opportunities currently under
development but that are yet to be de-risked.
Project Backlog
and Pipeline (as of June 30, 2020)
|
Region
|
Backlog
|
Pipeline
|
Total
|
North
America
|
1,544
|
4,101
|
5,645
|
Latin
America
|
1,539
|
3,657
|
5,196
|
Europe, the Middle
East and Africa ("EMEA")
|
383
|
2,148
|
2,531
|
Japan
|
220
|
0
|
220
|
Asia Pacific
excluding Japan
|
547
|
927
|
1,474
|
China
|
0
|
80
|
80
|
Total
|
4,233
|
10,913
|
15,146
|
Note: Backlog
represents the gross MWp size of projects, including
63 MWp in Latin America and 124
MWp in EMEA that have already been sold to third parties or are not
owned by Canadian Solar.
|
The Company believes there are significant growth opportunities
in the solar plus storage market, given declining battery storage
costs, higher capacity needs and accelerating retirements of fossil
fuel power plants. The Company further believes it is uniquely
positioned to deliver solar plus storage solutions to its customers
given its integrated business model as a top-tier module technology
manufacturer and global project developer, and is committed to
expanding its presence in this space.
The table below sets forth the Company's storage project backlog
and pipeline as of June 30, 2020,
which almost doubled compared to the previous quarter.
|
Backlog
|
Pipeline
|
Total
|
Storage
(MWh)
|
1,201
|
3,482
|
4,683
|
Projects in Construction
In addition to its project backlog and pipeline, the Company has
839 MWp of solar projects in construction.
Projects in
Construction (as of June 30, 2020)
|
|
Region
|
MWp
|
Expected
COD
|
North
America
|
32
|
2020-21
|
Latin
America
|
732
|
2020-21
|
Japan
|
70
|
2020-21
|
Asia Pacific ex.
Japan
|
5
|
2020
|
Total
|
839
|
-
|
Note: Latin
America portfolio includes 508 MWp of projects already
sold at NTP, with milestone revenue recognition over the
2019-2021
period.
|
|
|
|
|
|
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 June
30, 2020:
Expected COD
Schedule (MWp)
|
|
|
2020
|
|
2021
|
|
2022 and
Thereafter
|
|
Total
|
|
13
|
|
66
|
|
211
|
|
290
|
Solar Power Plants in Operation
As of June 30, 2020, the Company's
power plants in operation totaled 956 MWp, with an estimated total
resale value of approximately $773
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.
North
America
|
Latin
America
|
Japan
|
Asia Pacific ex.
Japan
|
China
|
Total
|
216
|
100
|
85
|
96
|
459
|
956
|
Note: The table
represents the gross MWp size of the power plants in operation,
including 108 MWp in North
America and 26 MWp in Asia Pacific, excluding 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
|
|
Six Months
Ended
|
|
June 30,
2020
|
March 31,
2020
|
June 30,
2019
|
|
June 30,
2020
|
June 30,
2019
|
Net
revenues
|
26,661
|
238,088
|
374,938
|
|
264,749
|
406,525
|
Cost of
revenues
|
15,083
|
148,339
|
353,529
|
|
163,422
|
375,703
|
Gross
profit
|
11,578
|
89,749
|
21,409
|
|
101,327
|
30,822
|
Operating
expenses
|
16,074
|
22,391
|
26,597
|
|
38,465
|
48,935
|
Income (loss) from
operations
|
(4,496)
|
67,358
|
(5,188)
|
|
62,862
|
(18,113)
|
Gross
margin
|
43.4%
|
37.7%
|
5.7%
|
|
38.3%
|
7.6%
|
Operating
margin
|
-16.9%
|
28.3%
|
-1.4%
|
|
23.7%
|
-4.5%
|
|
|
|
|
|
|
|
|
|
Business Outlook
The Company's business outlook is based on management's current
views and estimates given existing market conditions, order book,
production capacity, anticipated timing of project sales, and the
global economic environment. This outlook is subject to uncertainty
with respect to, among other things, final customer demand, project
construction and sale schedules, and the global impact of the
ongoing COVID-19 pandemic. Management's views and estimates are
subject to change without notice.
For the third quarter of 2020, the Company expects total module
shipments to be in the range of 2.9 GW to 3.1 GW, including
approximately 300 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 $840 million to $890
million, with gross margin expected to be between 14% and
16%.
For the full year of 2020, the Company now expects shipments to
be in the range of 11 GW to 12 GW.
Management expects the demand in 2021
to be strong, according to various research reports and Canadian
Solar's own sales feedback. At the same time, industry
consolidation is set to accelerate as customer preferences become
more sophisticated around quality and service, increasingly
choosing top tier solar brands.
As a result, Canadian Solar is positioning itself more
assertively for returns-accretive growth. The Company is currently
planning for 18 GW to 20 GW of shipments in 2021.
Dr. Shawn Qu, Chairman and
CEO, commented, "We are encouraged to see demand rebounding
globally, as more companies and consumers worldwide insist on
sustainable power sources. For our Energy
Business, our pipeline
growth and project execution are making progress, although
uncertainty remains around the timing and recognition of certain
project sales. On the MSS side, we expect near-term margin pressure
given cost increases from polysilicon supply shortages; however,
given our leadership position in premium markets, we are able to
share a portion of the higher costs with customers. Importantly, we
expect the impact of the polysilicon supply disruption to lessen
over the coming quarters as polysilicon
suppliers restore their temporarily shut-down capacities and
restart some of the currently idled, higher-cost
capacities.
We plan to expand our market share as
we increase our low-cost manufacturing capacity of high-quality
modules, which will be supported by the pre-IPO round of capital
raising for our MSS business. The improved access to capital
through the expected China listing
will help us to further capitalize on accelerating secular growth
in solar demand, and to unlock sustainable value for our
shareholders."
Changes to the Board of Directors
Mr. Karl Olsoni was nominated by the Company and approved by
shareholders as a new independent director during the 2020 Annual
Meeting of Shareholders. He will serve on the Audit and
Compensation Committees. Mr. Olsoni has served as a strategic
advisor to the Board of Directors since January 2020.
Furthermore, the Board of Directors has accepted the resignation
of Mr. Robert K. McDermott, who has
played an instrumental role in the Company's success since his
appointment as lead independent director in 2006. "On behalf of our
Board of Directors and the Company, I thank Bob for his valuable
service and contributions and wish him well in future endeavors,"
said Dr. Qu.
Recent Developments
On August 4, 2020, Canadian Solar
announced that it commenced the construction of a 10 MWp solar
power plant in Germany.
On July 27, 2020, Canadian Solar
announced that a special committee of independent directors of the
Company, with the assistance of outside financial and legal
advisors, completed a review of strategic alternatives available to
the Company and the board of directors of the Company decided to
pursue a listing of the Company's MSS business on either the
Shanghai Stock Exchange's Science and Technology Innovation Board
or the Shenzhen Stock Exchange's ChiNext Market.
On July 21, 2020, Canadian Solar
announced its wholly-owned subsidiary Recurrent Energy closed
$282 million of debt financing to
construct its Maplewood and
Maplewood 2 solar power projects
totaling 367 MWp in Texas.
On June 23, 2020, Canadian Solar
announced it signed two private power purchase agreements with
Braskem S.A. and COPEL Energia for a total of 274 MWp of solar
power projects in Brazil.
Conference Call Information
The Company will hold a conference call at 8:00 a.m. U.S. Eastern Daylight Time on
August 7, 2020 (8:00 p.m., August 7,
2020 in Hong Kong) to
discuss the Company's second 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 8068256. 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 Daylight Time on Saturday, August 15, 2020 (9:00 p.m., August 15,
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 8068256. 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 46 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
June 30, 2020
(In Thousands of U.S. Dollars, Except Percentages)
|
|
|
MSS
|
|
Energy
|
|
Elimination
|
|
Total
|
|
Net
revenues
|
|
$706,155
|
|
$26,661
|
|
($36,970)
|
|
$695,846
|
|
Cost of
revenues
|
|
557,263
|
|
15,083
|
|
(23,712)
|
|
548,634
|
|
Gross
profit
|
|
148,892
|
|
11,578
|
|
(13,258)
|
|
147,212
|
|
Gross
margin
|
|
21.1%
|
|
43.4%
|
|
—
|
|
21.2%
|
|
Income (loss)
from
operations
|
|
63,222
|
|
(4,496)
|
|
(13,258)
|
|
45,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Financial
Data - Module and System Solutions, and
Energy
|
|
|
|
|
|
Six Months Ended
June 30, 2020
(In Thousands of U.S. Dollars, Except Percentages)
|
|
|
MSS
|
|
Energy
|
|
Elimination
|
|
Total
|
|
Net
revenues
|
|
$1,395,954
|
|
$264,749
|
|
($139,222)
|
|
$1,521,481
|
|
Cost of
revenues
|
|
1,098,194
|
|
163,422
|
|
(110,544)
|
|
1,151,072
|
|
Gross
profit
|
|
297,760
|
|
101,327
|
|
(28,678)
|
|
370,409
|
|
Gross
margin
|
|
21.3%
|
|
38.3%
|
|
—
|
|
24.3%
|
|
Income (loss)
from
operations
|
|
124,720
|
|
62,862
|
|
(28,678)
|
|
158,904
|
|
|
Select Financial
Data - Module and System Solutions, and Energy
|
|
|
|
|
Three Months
Ended
June 30,
2020
|
|
Six Months
Ended
June 30,
2020
|
|
(In Thousands of
U.S. Dollars)
|
MSS
Revenues:
|
|
|
|
Solar modules and
other solar power
products
|
$ 613,068
|
|
$
1,158,962
|
Solar system
kits
|
42,901
|
|
72,098
|
EPC
services
|
3,164
|
|
3,922
|
Others (materials and
components)
|
10,052
|
|
21,750
|
Subtotal
|
$ 669,185
|
|
$
1,256,732
|
Energy
Revenues:
|
|
|
|
Solar power
projects
|
$ 2,685
|
|
$ 230,439
|
Electricity
|
1,882
|
|
2,930
|
O&M
services
|
5,027
|
|
10,213
|
Others (EPC and
development services)
|
17,067
|
|
21,167
|
Subtotal
|
$ 26,661
|
|
$ 264,749
|
Total net
revenues
|
$ 695,846
|
|
$
1,521,481
|
|
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
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$ 695,846
|
|
$ 825,635
|
|
$
1,036,275
|
|
$
1,521,481
|
|
$
1,520,994
|
Cost of
revenues
|
548,634
|
|
602,438
|
|
853,633
|
|
1,151,072
|
|
1,230,913
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
147,212
|
|
223,197
|
|
182,642
|
|
370,409
|
|
290,081
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
53,463
|
|
52,659
|
|
45,361
|
|
106,122
|
|
83,292
|
|
General and
administrative
expenses
|
46,354
|
|
52,961
|
|
65,735
|
|
99,315
|
|
117,159
|
|
Research and
development
expenses
|
10,924
|
|
10,056
|
|
12,133
|
|
20,980
|
|
25,298
|
|
Other operating
income
|
(8,997)
|
|
(5,915)
|
|
(1,329)
|
|
(14,912)
|
|
(3,015)
|
Total operating
expenses
|
101,744
|
|
109,761
|
|
121,900
|
|
211,505
|
|
222,734
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
45,468
|
|
113,436
|
|
60,742
|
|
158,904
|
|
67,347
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(16,960)
|
|
(19,013)
|
|
(20,654)
|
|
(35,973)
|
|
(42,352)
|
|
Interest
income
|
2,081
|
|
2,779
|
|
4,452
|
|
4,859
|
|
6,481
|
|
Gain (loss) on change
in
fair value of derivatives, net
|
(2,349)
|
|
33,109
|
|
(12,489)
|
|
30,759
|
|
(13,748)
|
|
Foreign exchange
gain
(loss), net
|
(2,192)
|
|
(34,119)
|
|
16,415
|
|
(36,311)
|
|
3,828
|
|
Investment income
(loss)
|
1,525
|
|
(14,012)
|
|
2,002
|
|
(12,487)
|
|
2,547
|
Other expenses,
net
|
(17,895)
|
|
(31,256)
|
|
(10,274)
|
|
(49,153)
|
|
(43,244)
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes and
equity in earnings of
unconsolidated investees
|
27,573
|
|
82,180
|
|
50,468
|
|
109,751
|
|
24,103
|
Income tax benefit
(expense)
|
(8,899)
|
|
29,051
|
|
(13,951)
|
|
20,154
|
|
(6,423)
|
Equity in earnings
of
unconsolidated investees
|
1,739
|
|
16
|
|
23,740
|
|
1,755
|
|
25,721
|
Net
income
|
20,413
|
|
111,247
|
|
60,257
|
|
131,660
|
|
43,401
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss)
attributable to non-controlling
interests
|
(191)
|
|
616
|
|
(2,425)
|
|
425
|
|
(2,116)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
Canadian Solar Inc.
|
$
20,604
|
|
$
110,631
|
|
$
62,682
|
|
$
131,235
|
|
$
45,517
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
0.35
|
|
$
1.86
|
|
$
1.05
|
|
$ 2.20
|
|
$
0.77
|
Shares used in
computation - basic
|
59,371,856
|
|
59,376,332
|
|
59,547,209
|
|
59,539,092
|
|
59,389,975
|
Earnings per share -
diluted
|
$
0.34
|
|
$
1.84
|
|
$
1.04
|
|
$ 2.18
|
|
$
0.76
|
Shares used in
computation -
diluted
|
59,793,196
|
|
60,084,298
|
|
60,260,410
|
|
60,127,369
|
|
60,272,536
|
|
Canadian Solar
Inc.
|
|
Unaudited
Condensed Consolidated Statement of Comprehensive
Income
|
|
(In Thousands of
U.S. Dollars)
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
Income
|
20,413
|
|
111,247
|
|
60,257
|
|
131,660
|
|
43,401
|
Other
comprehensive income (net
of tax of nil):
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
adjustment
|
30,997
|
|
(45,971)
|
|
(11,170)
|
|
(14,974)
|
|
4,815
|
De-recognition of
commodity hedge
and interest rate swap
|
4,439
|
|
—
|
|
—
|
|
4,439
|
|
—
|
Loss on changes in
fair value of
derivatives
|
(104)
|
|
(4,011)
|
|
(3,310)
|
|
(4,115)
|
|
(5,680)
|
Comprehensive
income
|
55,745
|
|
61,265
|
|
45,777
|
|
117,010
|
|
42,536
|
Less: comprehensive
income(loss)
attributable to non-controlling
interests
|
3,802
|
|
(1,441)
|
|
(1,028)
|
|
2,361
|
|
(5,355)
|
Comprehensive
income
attributable to Canadian Solar Inc.
|
51,943
|
|
62,706
|
|
46,805
|
|
114,649
|
|
47,891
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Solar
Inc.
|
|
Unaudited
Condensed Consolidated Balance Sheets
|
|
(In Thousands
of U.S. Dollars)
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
2020
|
|
2019
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
578,815
|
|
$
668,770
|
|
|
Restricted
cash
|
398,739
|
|
526,723
|
|
|
Accounts receivable
trade, net
|
421,691
|
|
436,815
|
|
|
Accounts receivable,
unbilled
|
16,096
|
|
15,256
|
|
|
Amounts due from
related parties
|
18,052
|
|
31,232
|
|
|
Inventories
|
547,106
|
|
554,070
|
|
|
Value added tax
recoverable
|
109,358
|
|
108,920
|
|
|
Advances to
suppliers
|
49,504
|
|
47,978
|
|
|
Derivative
assets
|
5,989
|
|
5,547
|
|
|
Project
assets
|
653,750
|
|
604,083
|
|
|
Prepaid expenses and
other current assets
|
397,300
|
|
253,542
|
|
Total current
assets
|
3,196,400
|
|
3,252,936
|
|
Restricted
cash
|
16,766
|
|
9,927
|
|
Property, plant and
equipment, net
|
970,065
|
|
1,046,035
|
|
Solar power systems,
net
|
49,654
|
|
52,957
|
|
Deferred tax assets,
net
|
136,267
|
|
153,963
|
|
Advances to
suppliers
|
41,484
|
|
40,897
|
|
Prepaid land use
right
|
58,800
|
|
60,836
|
|
Investments in
affiliates
|
79,322
|
|
152,828
|
|
Intangible assets,
net
|
22,430
|
|
22,791
|
|
Project
assets
|
492,519
|
|
483,051
|
|
Right-of-use
assets
|
30,162
|
|
37,733
|
|
Other non-current
assets
|
164,661
|
|
153,253
|
|
TOTAL
ASSETS
|
$
5,258,530
|
|
$
5,467,207
|
|
|
|
|
|
|
|
|
|
Canadian Solar
Inc.
|
|
Unaudited
Condensed Consolidated Balance Sheets (Continued)
|
|
(In Thousands
of U.S. Dollars)
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2020
|
|
2019
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
borrowings
|
$
1,015,749
|
|
$
933,120
|
|
|
Long-term borrowings
on project assets -
current
|
179,978
|
|
286,173
|
|
|
Accounts
payable
|
460,817
|
|
585,601
|
|
|
Notes
payable
|
472,000
|
|
544,991
|
|
|
Amounts due to
related parties
|
3,989
|
|
10,077
|
|
|
Other
payables
|
448,973
|
|
446,454
|
|
|
Advance from
customers
|
69,546
|
|
134,806
|
|
|
Derivative
liabilities
|
10,461
|
|
10,481
|
|
|
Operating lease
liabilities
|
17,218
|
|
18,767
|
|
|
Other current
liabilities
|
112,496
|
|
121,527
|
|
Total current
liabilities
|
2,791,227
|
|
3,091,997
|
|
Accrued warranty
costs
|
47,280
|
|
55,878
|
|
Long-term
borrowings
|
580,442
|
|
619,477
|
|
Derivatives
liabilities
|
5,374
|
|
1,841
|
|
Liability for
uncertain tax positions
|
15,543
|
|
15,353
|
|
Deferred tax
liabilities
|
54,689
|
|
56,463
|
|
Loss contingency
accruals
|
26,828
|
|
28,513
|
|
Operating lease
liabilities
|
15,523
|
|
20,718
|
|
Financing
liabilities
|
75,457
|
|
76,575
|
|
Other non-current
liabilities
|
97,207
|
|
75,334
|
|
Total
LIABILITIES
|
3,709,570
|
|
4,042,149
|
|
Equity:
|
|
|
|
|
|
Common
shares
|
686,425
|
|
703,806
|
|
|
Treasury
stock
|
—
|
|
(11,845)
|
|
|
Additional paid-in
capital
|
22,989
|
|
17,179
|
|
|
Retained
earnings
|
924,836
|
|
793,601
|
|
|
Accumulated other
comprehensive loss
|
(126,193)
|
|
(109,607)
|
|
Total Canadian
Solar Inc. shareholders' equity
|
1,508,057
|
|
1,393,134
|
|
Non-controlling
interests in subsidiaries
|
40,903
|
|
31,924
|
|
TOTAL
EQUITY
|
1,548,960
|
|
1,425,058
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
5,258,530
|
|
$
5,467,207
|
|
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 can better understand
the underlying operating performance of the business before the
impact of AD/CVD true-up provisions. 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.
Statement of
Operations Data:
|
|
|
|
|
|
|
|
|
|
(In Thousands of U.S.
Dollars, Except Share and Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
June 30,
2020
|
|
June
30,
2019
|
|
June 30,
2020
|
|
June
30,
2019
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Canadian
Solar Inc.
|
20,604
|
|
62,682
|
|
131,235
|
|
45,517
|
|
Non-GAAP income
adjustment items:
|
|
|
|
|
|
|
|
|
|
AD/CVD provision
true-up
|
(20,397)
|
|
(21,617)
|
|
(20,397)
|
|
(21,617)
|
|
|
Tax impact
|
5,054
|
|
5,365
|
|
5,054
|
|
5,365
|
|
Non-GAAP net income
attributable to
Canadian Solar Inc.
|
5,261
|
|
46,430
|
|
115,892
|
|
29,265
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income per share
- diluted
|
$ 0.34
|
|
$ 1.04
|
|
$ 2.18
|
|
$ 0.76
|
|
Non-GAAP income per
share - diluted
|
$ 0.09
|
|
$ 0.77
|
|
$ 1.93
|
|
$ 0.49
|
|
Shares used in
computation - diluted
|
59,793,196
|
|
60,260,410
|
|
60,127,369
|
|
60,272,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/canadian-solar-reports-second-quarter-2020-results-301108297.html
SOURCE Canadian Solar Inc.