GUELPH,
ON, Aug. 18, 2022 /PRNewswire/
-- Canadian Solar Inc. ("Canadian Solar" or the
"Company") (NASDAQ: CSIQ) today announced financial results for the
second quarter ended June 30, 2022,
with solar module shipments, revenue and gross margin all at or
exceeding the high end of prior guidance.
Highlights
- Solar module shipments of 5.06 GW, at the high end of 4.9 GW to
5.1 GW guidance range.
- 62% increase in revenue year-over-year ("yoy") to $2.31 billion, above the high end of $2.2 billion to $2.3
billion guidance range.
- 16.0% gross margin exceeds the guidance range of 14.5% to
15.5%.
- Net income attributable to Canadian Solar of $74 million, or $1.07 per diluted share.
- Accelerating upstream capacity expansion plans to further
increase control over supply chain.
- Global Energy solar project pipeline expands to 26 GWp and
storage pipeline expands to over 31 GWh, as of June 30, 2022.
- Carve-out IPO of CSI Solar Co., Ltd. ("CSI Solar" or the "CSI
Solar subsidiary") remains on track awaiting completion of the CSRC
registration.
Dr. Shawn Qu, Chairman and
CEO, commented, "We achieved strong results in the second
quarter of 2022, with solar module shipments, revenue and gross
margin all at or exceeding the high end of prior guidance.
Sequentially, we grew our module shipments by nearly 40% and
battery storage solutions revenues by 2.8 times, while
significantly expanding our profitability and completing a large
volume of project sales. Our capacity growth strategy is also well
on track, which we expanded per our recent announcement to invest
in our own polysilicon capacity in a region rich in renewable
energy resources. This will allow us to gain further control over
sourcing, technology and supply chain, and is part of a long-term
plan to increase our market share while meaningfully reducing the
carbon footprint of our supply chain. We provide additional details
of our environmental efforts and performance in our latest ESG
Sustainability Report, published last month.
"We are also excited to see the Inflation Reduction Act, or IRA,
in the U.S. coming into effect. We believe it will drive a big
acceleration in demand for clean energy, especially for solar
energy and battery storage.
"Separately, CSI Solar's carve-out IPO remains on track awaiting
registration with the China Securities Regulatory Commission."
Yan Zhuang, President of
Canadian Solar's CSI Solar subsidiary, said, "CSI Solar
delivered strong results in the second quarter, significantly
growing volume and increasing pricing, while taking cost control
measures in a difficult environment as polysilicon prices continue
to go up. Our performance in the second quarter was also boosted by
a substantial foreign exchange gain from a strong U.S. Dollar
relative to the Renminbi. From a market standpoint, we are
encouraged by signs of a shift in customer behavior driven by a
growing awareness of solar energy's attractive economics and its
importance in energy security and climate change mitigation
efforts, especially when paired with battery storage. Reflecting
this positive trend, our battery storage shipments in the first
half of 2022 have already exceeded 1 GWh, a record level for us. We
will continue to build on our strong channels and relationships,
especially in premium markets, and make capacity expansion
preparations to accelerate our global market share gains in the
coming years."
Ismael Guerrero, Corporate VP
and President of Canadian Solar's Global Energy subsidiary,
said, "We delivered significant growth in the second quarter by
monetizing approximately 880 MWp of project sales across
Australia, the U.S., Japan and the U.K. We also continued to expand
and diversify our global project pipeline, strengthening our
leadership position in key markets while allowing us to be more
selective in developing the highest quality assets. We are
particularly encouraged by the passing of the IRA in the U.S. as
our subsidiary, Recurrent Energy, has one of the largest and best
quality project pipelines, with a total of 8 GWp of solar and 16.5
GWh of battery storage. Additionally, we are making progress
executing on our O&M (operations and maintenance) growth
strategy to increase the share of stable, recurring income,
including a recent expansion of our platform in Europe, as we evaluate complementary growth
opportunities worldwide."
Dr. Huifeng Chang, Senior VP
and CFO, added, "In the second quarter, we achieved 85%
sequential growth in revenue to $2.3
billion and doubled our gross profit to $371 million, achieving a 16% gross margin. We
were able to support the accelerated growth rate and reduce the
impact of inflation due to our prior strategic decision to increase
inventory during the first quarter. We continue to prioritize cash
generation and are pleased with the increase in net cash flow
provided by operating activities to $293 million in the second
quarter of 2022, from $159 million in the first quarter of
2022. We ended the second quarter with a total cash position of
$1.9 billion, giving us significant
financial flexibility to fund long-term growth opportunities,
including accelerating our upstream capacity expansion."
Second Quarter 2022 Results
Total module shipments recognized as revenues in the second
quarter of 2022 were 5.06 GW, up 37% yoy. Of the total, 126
MW were shipped to the Company's own utility-scale solar
power projects.
Net revenues in the second quarter of 2022 were $2.31 billion, up 85% quarter-over-quarter
("qoq") and 62% yoy. The sequential and yoy increases were
mainly driven by higher project sales, higher solar shipment
volumes and average selling price, and significant growth in the
Company's battery storage solutions business.
Gross profit in the second quarter of 2022 was $371 million, up 105% qoq and 101%
yoy. Gross margin in the second quarter of 2022 was 16.0%,
above prior guidance, and compared to 14.5% in the first quarter of
2022. The sequential gross margin increase was mainly driven by
higher module pricing, lower manufacturing costs from the
depreciation of the Renminbi relative to the U.S. Dollar and scale
benefits from higher volume.
Total operating expenses in the second quarter of 2022 were
$255 million compared to $165
million in the first quarter of 2022 and $158 million in the second quarter of
2021. The sequential increase was mainly driven by higher
shipping and handling expenses and an impairment charge related to
certain manufacturing assets.
Depreciation and amortization charges in the second quarter of
2022 were $63 million, compared
to $66 million in the first quarter
of 2022 and $66 million in the second
quarter of 2021.
Net foreign exchange and derivative gain in the second quarter
of 2022 was $6 million, compared to a net gain of $3 million in the first quarter of 2022 and
a net loss of $3 million in the
second quarter of 2021.
Income tax expense in the second quarter of 2022 was
$28 million, compared to a $5 million income tax benefit
in the first quarter of 2022 and a $2 million income tax benefit in the second
quarter of 2021. The expense was a result of the Company's
higher income before income tax.
Net income attributable to Canadian Solar in the second quarter
of 2022 was $74 million, or
$1.07 per diluted share ("diluted
EPS"), compared to net income of $9
million, or $0.14 per diluted
share, in the first quarter of 2022, and net income of $11 million, or $0.18 per diluted share, in the second quarter of
2021.
For the three months ended June 30,
2022, diluted EPS of $1.07 was
calculated to include the dilution effect of the outstanding
convertible notes. Diluted EPS of $1.07 was calculated from total earnings of
$76 million, adding back the 2.5%
coupon of $1.3 million, divided by
71.1 million diluted shares, including 6.3 million shares issuable
upon the conversion of the convertible notes. For the three months
ended March 31, 2022, diluted EPS of
$0.14 was calculated from total
earnings of $9 million divided by
64.7 million diluted shares. For the three months ended
June 30, 2021, diluted EPS of
$0.18 was calculated from total
earnings of $11 million divided by
61.3 million diluted shares.
Net cash flow provided by operating activities in the second
quarter of 2022 was $293 million,
compared to net cash flow provided
by operating activities of $159
million in the first quarter of 2022. The increase in
operating cash inflow was mainly driven by higher earnings and
monetization of project assets.
Total debt was $2.7 billion as of
June 30, 2022, unchanged from
March 31, 2022. Non-recourse debt
used to finance solar power projects decreased to $264 million
as of June 30, 2022, from
$550 million as of March 31,
2022, mainly due to the monetization of project assets.
Corporate Structure
The Company has two business segments: Global Energy and CSI
Solar, which operate as follows:
The Global Energy segment carries out the Company's
global project development activities for both solar and battery
storage project development, which include sourcing land,
interconnection agreements, structuring PPAs and other permits and
requirements. The Global Energy segment develops both stand-alone
solar and stand-alone battery storage projects, as well as hybrid
solar plus storage projects. Its monetization strategies vary
between develop-to-sell, build-to-sell, and build-to-own, depending
on business strategies and market conditions, with the goal of
maximizing returns, accelerating cash turn, and minimizing capital
risk.
The CSI Solar segment consists of solar module
manufacturing and total system solutions, including inverters,
solar system kits and EPC (engineering, procurement and
construction) services. The CSI Solar segment also includes the
Company's battery storage system integration business, delivering
bankable, end-to-end, turnkey battery storage solutions for utility
scale, commercial and industrial, and residential applications.
These storage systems solutions are complemented with long-term
service agreements, including future battery capacity augmentation
services.
Global Energy Segment
Canadian Solar has one of the world's largest and most
geographically diversified utility-scale solar and energy storage
project development platforms, with a strong track record of
originating, developing, financing, and building over 6.8 GWp of
solar power plants across six continents. The Company has built a
leadership position in solar project development with 26 GWp total
pipeline, as well as in energy storage project development with
over 31 GWh of aggregate pipeline.
The continued pipeline expansion and strong project development
track record will support Global Energy's growth in three key
areas:
1. Project sales: The Company plans to grow its volume of
project sales by a compound annual growth rate of approximately 50%
to 2026, while holding and accumulating assets through investment
vehicles (see below) in order to better capture asset value.
2. Investment vehicles: The Company is optimizing its
project monetization strategy by establishing local investment
vehicles that will help maximize the value of its project assets.
The Company also intends to retain minority ownership in these
vehicles. By 2026, the Company plans to reach 1.3 GW of combined
net ownership in solar power projects through these vehicles. This
approach will help the Company build and grow a stable base of
long-term cash flows from contracted electricity. The Company plans
to recycle a large portion of the capital into developing new solar
projects for growth. Meanwhile, Canadian Solar expects to capture
additional operational value throughout the partial ownership
period, including long-term cash flows from power sales, O&M,
asset management and other services (see point 3). The Company
currently owns a 15% stake in the Canadian Solar Infrastructure
Fund ("CSIF", TSE: 9284), the largest Japanese infrastructure
fund listed on the Tokyo Stock Exchange, and has also
established the CSFS Fund I, a closed-ended alternative investment
fund of a similar nature in Italy.
Through launching these localized vehicles, Canadian Solar is
building its expertise in designing investment vehicles in local
markets that will help maximize the value of its project
assets.
3. Services: Canadian Solar currently manages over 3.1 GW
of operational projects under long-term O&M agreements, and an
additional 2.4 GW of contracted projects that will be operated and
maintained by the Company once they are placed in operation. The
Company's target is to reach 20 GW of projects under O&M
agreements by 2026.
Management targets to achieve the following over the next few
years:
Global Energy
Targets
|
2021A
|
2022E
|
2023E
|
2024E
|
2025E
|
2026E
|
Annual Project Sales,
GWp
|
2.1
|
2.1-2.6
|
2.8-3.3
|
3.5-4.0
|
4.0-4.5
|
4.3-4.8
|
Operational O&M
Projects, GWp
|
2.1
|
4.5
|
7.5
|
11
|
15
|
20
|
Net Cumulative Projects
Retained, MWp*
|
292
|
370
|
630
|
1,000
|
1,100
|
1,300
|
Gross Cumulative
Projects Retained, MWp*
|
748
|
1,500
|
2,580
|
3,500
|
4,000
|
5,000
|
|
*Net projects retained
represents CSIQ's net partial ownership of solar projects; the
gross number represents the aggregate gross size of projects,
including the share which is not owned by CSIQ.
|
Solar Project Pipeline
As of June 30, 2022, the Company's
total project pipeline was 26.2 GWp, including 1.3 GWp under
construction, 3.9 GWp of backlog, and 21.0 GWp of projects in
advanced and early-stage pipelines. We have updated our project
pipeline classification as follows:
- Backlog projects are late-stage projects that
have passed their Risk Cliff Date and are expected to start
construction in the next 1-4 years. A project's Risk Cliff Date is
the date on which the project passes the last high-risk development
stage and varies depending on the country where it is located. This
is usually after the projects have received all the required
environmental and regulatory approvals, and entered into
interconnection agreements, feed-in tariff ("FIT") arrangements and
PPAs. Over 90% of projects in backlog are contracted (i.e., have
secured a PPA or FIT), and the remaining are reasonably assured of
securing PPAs.
- Advanced pipeline projects are mid-stage projects that
have secured or have more than 90% certainty of securing an
interconnection agreement.
- Early-stage Pipeline projects are early-stage projects
controlled by Canadian Solar that are in the process of securing
interconnection.
The following table presents Global Energy's total solar
project development pipeline.
|
Total Project
Pipeline (as of June 30, 2022) – MWp*
|
Region
|
In
Construction
|
Backlog
|
Advanced
Pipeline
|
Early-Stage
Pipeline
|
Total
|
North
America
|
-
|
601
|
2,767
|
4,736
|
8,104
|
Latin
America
|
907**
|
2,469**
|
3,417
|
1,040
|
7,833
|
Europe, the Middle East
and Africa ("EMEA")
|
21
|
379
|
4,033
|
1,811
|
6,244
|
Japan
|
145
|
157
|
-
|
105
|
407
|
Asia Pacific excluding
Japan and China
|
-
|
38
|
137
|
1,762
|
1,937
|
China
|
250
|
300
|
-
|
1,170
|
1,720
|
Total
|
1,323
|
3,944
|
10,354
|
10,624
|
26,245
|
*All numbers are
gross MWp.
**Including 311 MWp
in construction and 517 MWp in backlog that are already sold to
third parties
|
|
|
|
|
|
|
|
Battery Storage Project Pipeline
In addition to developing utility-scale solar power projects,
the Global Energy segment has also been developing hybrid solar
plus energy storage projects, as well as stand-alone battery
storage projects. Since the first quarter of 2021, the Company has
been co-hosting energy storage facilities with solar power plants
on the same piece of land for nearly all projects under
development. By using a single interconnection point per project,
the Company expects to significantly enhance the efficiency of its
development and the value of its assets under development.
Canadian Solar's storage development business model also
includes signing storage tolling agreements with a variety of power
purchasers, including community choice aggregators, investor-owned
utilities, universities, and public utility districts. In addition,
the Company has signed development services agreements to retrofit
operational solar projects with battery storage, many of which were
previously developed by the Company.
The table below sets forth Global Energy's total storage
project development pipeline.
Storage Project Development Backlog
and Pipeline (as of June 30, 2022) – MWh
|
Region
|
In
Construction
|
Backlog
|
Advanced
Pipeline
|
Early-Stage
Pipeline
|
Total
|
North
America
|
1,400
|
-
|
6,319
|
8,760
|
16,479
|
Latin
America
|
-
|
1,300
|
2,806
|
970
|
5,076
|
EMEA
|
-
|
82
|
1,324
|
4,178
|
5,584
|
Japan
|
-
|
-
|
-
|
19
|
19
|
Asia Pacific, excluding
Japan and China
|
20
|
-
|
-
|
2,320
|
2,340
|
China
|
-
|
300
|
100
|
1,400
|
1,800
|
Total
|
1,420
|
1,682
|
10,549
|
17,647
|
31,298
|
|
|
|
|
|
|
|
|
|
Solar Power Plants and Battery Storage Projects in
Operation
As of June 30, 2022, the Company's
solar power plants in operation totaled 311 MWp, with a combined
estimated net resale value of approximately $270 million to Canadian Solar. The
estimated resale value is based on selling prices that Canadian
Solar is currently negotiating or comparable asset sales.
Solar Power Plants
in Operation – MWp*
|
Latin
America
|
Japan
|
Asia
Pacific
ex. Japan and
China
|
China
|
Total
|
166
|
48
|
15
|
82
|
311
|
|
*All numbers are net
MWp owned by Canadian Solar; total gross MWp of projects is 577
MWp, including volume that is already sold to third
parties.
|
Operating Results
The following table presents select unaudited results of
operations data of the Global Energy segment for the periods
indicated.
Global Energy
Segment Financial Results
(In Thousands
of U.S. Dollars, Except Percentages)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
2022
|
March
31,
2022
|
June
30,
2021
|
|
June
30,
2022
|
June
30,
2021
|
|
Net revenues
|
553,984
|
92,966
|
280,614
|
|
646,950
|
751,676
|
|
Cost of
revenues
|
473,979
|
75,130
|
268,855
|
|
549,109
|
626,892
|
|
Gross profit
|
80,005
|
17,836
|
11,759
|
|
97,841
|
124,784
|
|
Operating
expenses
|
24,326
|
18,847
|
15,632
|
|
43,173
|
43,576
|
|
Income (loss) from
operations*
|
55,679
|
(1,011)
|
(3,873)
|
|
54,668
|
81,208
|
|
Gross
margin
|
14.4 %
|
19.2 %
|
4.2 %
|
|
15.1 %
|
16.6 %
|
|
Operating
margin
|
10.1 %
|
-1.1 %
|
-1.4 %
|
|
8.5 %
|
10.8 %
|
|
|
|
* Income (loss) from
operations reflects management's allocation and estimate as some
services are shared by the
Company's two business segments.
|
|
CSI Solar Segment
CSI Solar's 2022 and 2023 capacity expansion targets are set
forth below.
Manufacturing
Capacity, GW*
|
|
Dec.
2021
|
Jun.
2022
|
Dec.
2022
|
Dec.
2023
|
|
Actual
|
Actual
|
Plan
|
Plan
|
Ingot
|
5.4
|
5.4
|
20.4
|
25.0
|
Wafer
|
11.5
|
11.5
|
20.0
|
25.0
|
Cell
|
13.9
|
13.9
|
19.8
|
35.0
|
Module
|
23.9
|
27.9
|
32.0
|
50.0
|
|
*Nameplate annualized
capacities at said point in time. Capacity expansion plans are
subject to change without notice based on market conditions and
capital allocation plans.
|
Operating Results
The following table presents select unaudited results of
operations data of the CSI Solar segment for the periods
indicated.
CSI Solar Segment
Financial Results*
(In Thousands of
U.S. Dollars, Except Percentages)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2022
|
March 31,
2022
|
June
30,
2021
|
|
June 30,
2022
|
June
30,
2021
|
Net revenues
|
1,816,410
|
1,209,994
|
1,183,958
|
|
3,026,404
|
1,879,110
|
Cost of
revenues
|
1,526,755
|
1,034,165
|
1,028,470
|
|
2,560,920
|
1,656,164
|
Gross profit
|
289,655
|
175,829
|
155,488
|
|
465,484
|
222,946
|
Operating
expenses
|
227,262
|
143,931
|
140,516
|
|
371,193
|
260,642
|
Income (loss) from
operations
|
62,393
|
31,898
|
14,972
|
|
94,291
|
(37,696)
|
Gross
margin
|
15.9 %
|
14.5 %
|
13.1 %
|
|
15.4 %
|
11.9 %
|
Operating
margin
|
3.4 %
|
2.6 %
|
1.3 %
|
|
3.1 %
|
-2.0 %
|
|
*Includes effects of both
sales to third-party customers and to
the Company's Global Energy
segment. Please refer to the
attached financial tables for intercompany transaction elimination
information. Income (loss) 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
revenues of CSI Solar:
CSI Solar Net
Revenues Geographic Distribution* (In Millions of U.S. Dollars,
Except Percentages)
|
|
Q2
2022
|
% of Net
Revenues
|
|
Q1
2022
|
% of Net
Revenues
|
|
Q2
2021
|
% of Net
Revenues
|
Asia
|
587
|
33
|
|
473
|
41
|
|
527
|
46
|
Americas
|
742
|
42
|
|
453
|
39
|
|
421
|
37
|
Europe and
others
|
431
|
25
|
|
231
|
20
|
|
201
|
17
|
Total
|
1,760
|
100
|
|
1,157
|
100
|
|
1,149
|
100
|
|
*Excludes sales from
CSI Solar to Global Energy.
|
CSI Solar shipped 5.06 GW of modules to more than
70 countries in the second quarter of 2022. The top
five markets ranked by shipments were China, the U.S., Spain, Brazil
and Germany.
Battery Storage Solutions
Within CSI Solar, the battery storage solutions team provides
customers with competitive turnkey, integrated battery storage
solutions, including bankable and fully wrapped capacity and
performance guarantees. These guarantees are complemented with
long-term service agreements, which include future battery capacity
augmentation services and bring in long-term, stable income.
The table below sets forth CSI Solar's battery storage system
integration's project pipeline as of June 30, 2022.
|
LTSA (Long
Term Service
Agreement)
|
Contracted/
In
Construction
|
Forecast
|
Pipeline
|
Total
|
Storage
(MWh)
|
861
|
1,892
|
40
|
8,242
|
11,035
|
LTSA projects are operational battery storage projects delivered
by CSI Solar that are under multi-year long-term service agreements
and generate recurring earnings. Contracted/in construction
projects are expected to be delivered within the next 12 to 18
months. Forecast projects include those that have more than 75%
probability of being contracted within the next 12 months, and the
remaining pipeline includes projects that have received exclusivity
agreements or have been shortlisted, but still have a below 75%
probability of being contracted.
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, the global impact of the ongoing COVID-19 pandemic and
shutdowns, supply chain constraints, and geopolitical conflicts.
Management's views and estimates are subject to change without
notice.
For the third quarter of 2022, the Company expects total
revenues to be in the range of $2.0
billion to $2.1 billion. Gross
margin is expected to be between 15.0% and 16.5%. Total module
shipments recognized as revenues by CSI Solar are expected to be in
the range of 6.0 GW to 6.2 GW, including approximately 140 MW to
the Company's own projects.
For the full year of 2022, the Company raises total revenue
guidance to $7.5 billion to
$8.0 billion, from $7.0 billion to $7.5
billion previously. The Company expects full year volume
targets for CSI Solar and Global Energy to remain unchanged from
the ranges communicated in the prior quarter: total module
shipments of 20 GW to 22 GW and battery storage shipments of 1.8
GWh to 1.9 GWh (CSI Solar), and total project sales of 2.1 GW
to 2.6 GW (Global Energy).
Dr. Shawn Qu, Chairman and
CEO, commented, "We are off to a strong first half for 2022,
and expect continued solar module volume growth through the
remainder of the year as we ramp up capacity towards 2023 volume
growth targets. The second quarter will likely be the largest
quarter of the year for us due to the timing of project sales and
battery storage shipments. However, we expect profitability to
remain healthy through the second half of the year, driven by
continued manufacturing processing cost reductions and lower
logistics costs partially offset by higher polysilicon prices. We
continue to build on our long track record of innovation, and we
are excited to officially introduce our long-awaited battery
storage products for utility and residential applications in the
upcoming Solar Power International exhibition in California. In a gradually improving market
backdrop aided by strong policies such as the recently passed
Inflation Reduction Act, Canadian Solar is strongly positioned to
achieve profitable growth as we continue to focus on long-term
investments and create lasting value for shareholders."
Recent Developments
On August 10, 2022, Canadian Solar
announced that a wholly owned subsidiary of CSI Solar entered into
an investment agreement with the municipal government of Haidong
City in Qinghai Province to invest
in a polysilicon manufacturing facility. Under the agreement, CSI
Solar plans to build a facility with an annual capacity of
approximately 50,000 tons of high-purity polysilicon later in 2022
and the facility is expected to commence production in mid-2024.
Subject to market conditions and approvals from its board of
directors, CSI Solar may also build other manufacturing facilities,
including ingots, wafers, cells, modules, and other auxiliary
materials in Haidong.
On July 25, 2022, Canadian Solar
completed the sale of two fully permitted and construction ready
solar and battery energy storage projects in the U.K. to specialist
alternative asset manager, Gresham House. The two
projects comprise a collocated solar and battery energy storage
project in Durham, with 50 MWp solar capacity and 38 MW (or 76
MWh) of battery energy storage, and a standalone solar project
in Warwickshire of 28 MWp.
On July 25, 2022, Canadian Solar
published its latest ESG Sustainability Report, which highlights
the Company's progress in advancing its sustainability strategy
from an environmental, social, and governance perspective.
On July 7, 2022, Canadian Solar
completed the sale of two solar farms, Suntop and Gunnedah totaling
345 MWp in New South Wales,
Australia to CalEnergy Resources (Australia) Limited, a subsidiary
of Northern Powergrid Holdings Company. Both projects have
reached substantial completion.
On June 16, 2022, Canadian Solar
acquired two standalone energy storage projects in the South Load
Zone of the Texas ERCOT market from Black Mountain Energy
Storage. The projects are each anticipated to store up to 200 MWh
of energy, with notice to proceed expected in 2023 and commercial
operation in the second quarter of 2024.
On June 15, 2022, Canadian Solar
secured 136 million Brazilian reais (approximately US$28 million) non-recourse project financing
from Banco do Nordeste do Brasil S.A. to support
construction and operation of its 79 MWp Lavras II solar power
project in Brazil.
On June 6, 2022, Canadian Solar
signed an agreement with SPIC Brasil, a leading power generation
company in Brazil to sell 70%
stake in the Company's 738 MWp Marangatu and Panati-Sitia solar
projects in Brazil. Both projects
are expected to begin construction in late 2022 and reach
commercial operation in late 2023.
On May 27, 2022, Canadian Solar
announced that its wholly owned subsidiary Recurrent Energy
successfully completed the construction on the 100 MW Sunflower
solar power plant in Mississippi.
Recurrent Energy developed and built the solar power plant under a
Build Transfer Agreement for Entergy Mississippi which owns the
plant for the life of the facility after the completion of
construction.
Conference Call Information The Company will hold a
conference call on Thursday, August 18,
2022 at 8:00 a.m. U.S. Eastern
Daylight Time (8:00 p.m.,
Thursday, August 18, 2022 in
Hong Kong) to discuss its second
quarter 2022 results and business outlook. The dial-in phone number
for the live audio call is +1-877-704-4453 (toll-free from the
U.S.), 800-965-561 (toll-free from Hong
Kong), 400-1202-840 (local dial-in from Mainland China) or
+1-201-389-0920 from international locations. The conference ID is
13731878. 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 2 hours after the
conclusion of the call until 11:00
p.m. U.S. Eastern Daylight Time on Thursday, September 1, 2022 (11:00 a.m., September 2,
2022, in Hong Kong) and can
be accessed by +1-844-512-2921 (toll-free from the U.S.), or
+1-412-317-6671 from international locations. The replay pin
number is 13731878. 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.
Canadian Solar was founded in 2001 in Canada and is one of the world's largest solar
technology and renewable energy companies. It is a leading
manufacturer of solar photovoltaic modules, provider of solar
energy and battery storage solutions, and developer of
utility-scale solar power and battery storage projects with a
geographically diversified pipeline in various stages of
development. Over the past 21 years, Canadian Solar has
successfully delivered around 76 GW of premium-quality, solar
photovoltaic modules to customers across the world. Likewise, since
entering the project development business in 2010, Canadian Solar
has developed, built and connected over 6.8 GWp in over 20
countries across the world. Currently, the Company has 311 MWp of
projects in operation, 5.3 GWp of projects under construction or in
backlog (late-stage), and an additional 21 GWp of projects in
advanced and early-stage pipeline. Canadian Solar is one of the
most bankable companies in the solar and renewable energy industry,
having been publicly listed on the 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, including those
regarding the Company's expected future shipment volumes, revenues,
gross margins and project sales 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, regulatory and economic conditions
and the state of the solar and battery storage market and industry;
geopolitical tensions and conflicts, including impasses, sanctions
and export controls; volatility, uncertainty, delays and
disruptions related to the COVID-19 pandemic; supply chain
disruptions; 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., China, Brazil
and India; changes in effective
tax rates; changes in customer order patterns; changes in product
mix; changes in corporate responsibility, especially environmental,
social and governance ("ESG") requirements; capacity utilization;
level of competition; pricing pressure and declines in or failure
to timely adjust 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 that
customers demand; shortage in supply of materials or capacity
requirements; availability of financing; exchange and inflation
rate fluctuations; uncertainties related to the CSI Solar carve-out
listing; litigation and other risks as described in the Company's
filings with the Securities and Exchange Commission, including its
annual report on Form 20-F filed on April
28, 2022. 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:
Isabel Zhang
Investor
Relations
Canadian Solar
Inc.
investor@canadiansolar.com
|
David
Pasquale
Global IR
Partners
Tel:
+1-914-337-8801
csiq@globalirpartners.com
|
FINANCIAL TABLES FOLLOW
The following tables provide unaudited select financial data
for the Company's CSI Solar and Global Energy businesses.
|
|
|
Select Financial
Data – CSI Solar and Global Energy
|
|
|
|
Three Months Ended
June 30, 2022
(In Thousands of U.S. Dollars, Except Percentages)
|
|
|
|
CSI
Solar
|
|
Global
Energy
|
|
Elimination
and
unallocated
items (1)
|
|
Total
|
Net
revenues
|
|
|
1,816,410
|
|
553,984
|
|
(56,208)
|
|
2,314,186
|
Cost of
revenues
|
|
|
1,526,755
|
|
473,979
|
|
(57,598)
|
|
1,943,136
|
Gross profit
|
|
|
289,655
|
|
80,005
|
|
1,390
|
|
371,050
|
Gross margin
|
|
|
15.9 %
|
|
14.4 %
|
|
—
|
|
16.0 %
|
Income from
operations (2)
|
|
|
62,393
|
|
55,679
|
|
(1,955)
|
|
116,117
|
|
|
|
Select Financial
Data – CSI Solar and Global Energy
|
|
|
|
Six Months Ended
June 30, 2022
(In Thousands of U.S. Dollars, Except Percentages)
|
|
|
|
CSI
Solar
|
|
Global
Energy
|
|
Elimination
and
unallocated
items (1)
|
|
Total
|
Net
revenues
|
|
|
3,026,404
|
|
646,950
|
|
(108,819)
|
|
3,564,535
|
Cost of
revenues
|
|
|
2,560,920
|
|
549,109
|
|
(97,435)
|
|
3,012,594
|
Gross profit
|
|
|
465,484
|
|
97,841
|
|
(11,384)
|
|
551,941
|
Gross margin
|
|
|
15.4 %
|
|
15.1 %
|
|
—
|
|
15.5 %
|
Income from
operations (2)
|
|
|
94,291
|
|
54,668
|
|
(17,327)
|
|
131,632
|
|
|
|
Select Financial
Data – CSI Solar and Global Energy
|
|
|
|
Three Months Ended
June 30, 2021
(In Thousands of U.S. Dollars, Except Percentages)
|
|
|
|
CSI
Solar
|
|
Global
Energy
|
|
Elimination
and
unallocated
items (1)
|
|
Total
|
Net
revenues
|
|
|
1,183,958
|
|
280,614
|
|
(34,911)
|
|
1,429,661
|
Cost of
revenues
|
|
|
1,028,470
|
|
268,855
|
|
(52,451)
|
|
1,244,874
|
Gross profit
|
|
|
155,488
|
|
11,759
|
|
17,540
|
|
184,787
|
Gross margin
|
|
|
13.1 %
|
|
4.2 %
|
|
—
|
|
12.9 %
|
Income (loss) from
operations (2)
|
|
|
14,972
|
|
(3,873)
|
|
15,281
|
|
26,380
|
|
|
|
Select Financial
Data – CSI Solar and Global Energy
|
|
|
|
Six Months Ended
June 30, 2021
(In Thousands of
U.S. Dollars, Except Percentages)
|
|
|
|
CSI
Solar
|
|
Global
Energy
|
|
Elimination
and
unallocated
items (1)
|
|
Total
|
Net
revenues
|
|
|
1,879,110
|
|
751,676
|
|
(111,786)
|
|
2,519,000
|
Cost of
revenues
|
|
|
1,656,164
|
|
626,892
|
|
(143,445)
|
|
2,139,611
|
Gross profit
|
|
|
222,946
|
|
124,784
|
|
31,659
|
|
379,389
|
Gross margin
|
|
|
11.9 %
|
|
16.6 %
|
|
—
|
|
15.1 %
|
Income (loss) from
operations (2)
|
|
|
(37,696)
|
|
81,208
|
|
26,351
|
|
69,863
|
(1) Includes
inter-segment elimination, and unallocated corporate costs not
considered part of management's evaluation of reportable segment
operating performance.
|
(2) Income (loss) from
operations reflects management's allocation and estimate as some
services are shared by the Company's two business
segments.
|
|
Select Financial
Data - CSI Solar and Global Energy
|
|
Three Months
Ended
June 30,
2022
|
|
Three Months
Ended
March 31,
2022
|
|
Three Months
Ended
June 30,
2021
|
|
(In Thousands of
U.S. Dollars)
|
CSI Solar
Revenues:
|
|
|
|
|
|
Solar
modules
|
1,350,495
|
|
963,045
|
|
843,463
|
Solar system
kits
|
150,765
|
|
90,456
|
|
88,057
|
Battery storage
solutions
|
227,438
|
|
82,500
|
|
68,890
|
China energy/EPC
(incl. electricity
sales)
|
5,397
|
|
5,323
|
|
94,347
|
Others
|
26,107
|
|
16,059
|
|
54,290
|
Subtotal
|
1,760,202
|
|
1,157,383
|
|
1,149,047
|
Global Energy
Revenues:
|
|
|
|
|
|
Solar and battery
storage power
projects
|
540,056
|
|
78,392
|
|
266,598
|
O&M
and asset management
services
|
7,745
|
|
7,948
|
|
8,607
|
Others (incl.
electricity sales)
|
6,183
|
|
6,626
|
|
5,409
|
Subtotal
|
553,984
|
|
92,966
|
|
280,614
|
Total net
revenues
|
2,314,186
|
|
1,250,349
|
|
1,429,661
|
|
Select Financial
Data - CSI Solar and Global Energy
|
|
Six Months
Ended
June 30,
2022
|
|
Six Months
Ended
June 30,
2021
|
|
(In Thousands of
U.S. Dollars)
|
CSI Solar
Revenues:
|
|
|
|
Solar
modules
|
2,313,540
|
|
1,395,710
|
Solar system
kits
|
241,221
|
|
124,128
|
Battery storage
solutions
|
309,938
|
|
71,248
|
China energy/EPC
(incl. electricity sales)
|
10,720
|
|
101,442
|
Others
|
42,166
|
|
74,796
|
Subtotal
|
2,917,585
|
|
1,767,324
|
Global Energy
Revenues:
|
|
|
|
Solar and battery
storage power projects
|
618,448
|
|
719,445
|
O&M
and asset management services
|
15,693
|
|
18,573
|
Others (incl.
electricity sales)
|
12,809
|
|
13,658
|
Subtotal
|
646,950
|
|
751,676
|
Total net
revenues
|
3,564,535
|
|
2,519,000
|
|
Canadian Solar
Inc.
|
|
Unaudited Condensed
Consolidated Statements of Operations
|
|
(In Thousands of
U.S. Dollars, Except Share and Per Share Data)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$ 2,314,186
|
|
$ 1,250,349
|
|
$ 1,429,661
|
|
$ 3,564,535
|
|
$ 2,519,000
|
Cost of
revenues
|
1,943,136
|
|
1,069,458
|
|
1,244,874
|
|
3,012,594
|
|
2,139,611
|
|
Gross
profit
|
371,050
|
|
180,891
|
|
184,787
|
|
551,941
|
|
379,389
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling and
distribution
expenses
|
158,017
|
|
108,845
|
|
83,581
|
|
266,862
|
|
167,661
|
|
General and
administrative expenses
|
87,920
|
|
62,810
|
|
68,578
|
|
150,730
|
|
136,035
|
|
Research and
development expenses
|
18,050
|
|
13,280
|
|
13,158
|
|
31,330
|
|
25,608
|
|
Other operating
income,
net
|
(9,054)
|
|
(19,559)
|
|
(6,910)
|
|
(28,613)
|
|
(19,778)
|
Total operating
expenses
|
254,933
|
|
165,376
|
|
158,407
|
|
420,309
|
|
309,526
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
116,117
|
|
15,515
|
|
26,380
|
|
131,632
|
|
69,863
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(19,709)
|
|
(15,302)
|
|
(14,795)
|
|
(35,011)
|
|
(29,468)
|
|
Interest
income
|
4,216
|
|
4,212
|
|
2,837
|
|
8,428
|
|
6,085
|
|
Gain (loss) on change
in
fair value of derivatives,
net
|
(4,869)
|
|
(24,738)
|
|
(12,150)
|
|
(29,607)
|
|
422
|
|
Foreign exchange
gain
(loss), net
|
11,333
|
|
27,862
|
|
8,884
|
|
39,195
|
|
(10,764)
|
|
Investment income
(loss)
|
6,984
|
|
(5,524)
|
|
5,154
|
|
1,460
|
|
6,417
|
Other expenses,
net
|
(2,045)
|
|
(13,490)
|
|
(10,070)
|
|
(15,535)
|
|
(27,308)
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
and equity in earnings of
unconsolidated investees
|
114,072
|
|
2,025
|
|
16,310
|
|
116,097
|
|
42,555
|
Income tax benefit
(expense)
|
(27,731)
|
|
5,183
|
|
1,645
|
|
(22,548)
|
|
(12,207)
|
Equity in earnings
of
unconsolidated investees
|
2,214
|
|
1,726
|
|
585
|
|
3,940
|
|
1,788
|
Net
income
|
88,555
|
|
8,934
|
|
18,540
|
|
97,489
|
|
32,136
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss)
attributable to non-
controlling interests
|
14,093
|
|
(273)
|
|
7,279
|
|
13,820
|
|
(1,904)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
Canadian Solar Inc.
|
$
74,462
|
|
$
9,207
|
|
$
11,261
|
|
$
83,669
|
|
$
34,040
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
1.16
|
|
$
0.14
|
|
$
0.19
|
|
$
1.30
|
|
$
0.57
|
Shares used in
computation -
basic
|
64,262,556
|
|
64,028,919
|
|
60,288,824
|
|
64,146,383
|
|
60,077,039
|
Earnings per share -
diluted
|
$
1.07
|
|
$
0.14
|
|
$
0.18
|
|
$
1.21
|
|
$
0.54
|
Shares used in
computation -
diluted
|
71,103,568
|
|
64,720,107
|
|
61,339,043
|
|
71,067,215
|
|
67,580,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Solar
Inc.
|
|
Unaudited Condensed
Consolidated Statement of Comprehensive Income
(Loss)
|
|
(In Thousands of
U.S. Dollars)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
Income
|
$
88,555
|
|
$
8,934
|
|
$
18,540
|
|
$
97,489
|
|
$
32,136
|
Other comprehensive
income
(loss) (net of tax of nil):
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
adjustment
|
(126,367)
|
|
7,511
|
|
9,629
|
|
(118,856)
|
|
(22,073)
|
Gain on changes in fair
value of
available-for-sale debt securities
|
229
|
|
—
|
|
—
|
|
229
|
|
—
|
Gain on changes in fair
value of
derivatives
|
160
|
|
190
|
|
—
|
|
350
|
|
—
|
Comprehensive income
(loss)
|
(37,423)
|
|
16,635
|
|
28,169
|
|
(20,788)
|
|
10,063
|
Less: comprehensive
income
(loss) attributable to non-
controlling interests
|
(3,960)
|
|
1,127
|
|
8,760
|
|
(2,833)
|
|
(6,932)
|
Comprehensive income
(loss)
attributable to Canadian Solar
Inc.
|
(33,463)
|
|
15,508
|
|
19,409
|
|
(17,955)
|
|
16,995
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Solar
Inc.
|
|
Unaudited Condensed
Consolidated Balance Sheets
|
|
(In Thousands of
U.S. Dollars)
|
|
|
|
June
30,
|
|
December 31,
|
|
|
|
2022
|
|
2021
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$ 1,053,567
|
|
$ 869,831
|
|
|
Restricted
cash
|
888,262
|
|
560,633
|
|
|
Accounts receivable
trade, net
|
832,967
|
|
651,372
|
|
|
Accounts receivable,
unbilled
|
15,839
|
|
37,244
|
|
|
Amounts due from
related parties
|
162,086
|
|
73,042
|
|
|
Inventories
|
1,622,297
|
|
1,192,374
|
|
|
Value added tax
recoverable
|
101,904
|
|
125,882
|
|
|
Advances to
suppliers
|
277,820
|
|
225,879
|
|
|
Derivative
assets
|
17,236
|
|
7,286
|
|
|
Project
assets
|
328,937
|
|
594,107
|
|
|
Prepaid expenses and
other current assets
|
431,621
|
|
434,177
|
|
Total current
assets
|
5,732,536
|
|
4,771,827
|
|
Restricted
cash
|
6,525
|
|
3,818
|
|
Property, plant and
equipment, net
|
1,353,870
|
|
1,401,877
|
|
Solar power systems,
net
|
103,908
|
|
108,263
|
|
Deferred tax assets,
net
|
252,235
|
|
236,503
|
|
Advances to
suppliers
|
33,515
|
|
34,239
|
|
Prepaid land use
rights
|
66,416
|
|
71,011
|
|
Investments in
affiliates
|
104,528
|
|
98,819
|
|
Intangible assets,
net
|
16,345
|
|
18,992
|
|
Project
assets
|
498,043
|
|
433,254
|
|
Right-of-use
assets
|
31,005
|
|
35,286
|
|
Other non-current
assets
|
181,164
|
|
174,453
|
|
TOTAL
ASSETS
|
$
8,380,090
|
|
$
7,388,342
|
|
|
|
|
|
|
|
|
|
Canadian Solar
Inc.
|
|
Unaudited Condensed
Consolidated Balance Sheets (Continued)
|
|
(In Thousands of
U.S. Dollars)
|
|
|
June
30,
|
|
December 31,
|
|
|
2022
|
|
2021
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
borrowings
|
$ 1,367,616
|
|
$ 1,271,215
|
|
|
Long-term borrowings on
project assets -
current
|
153,934
|
|
321,655
|
|
|
Accounts
payable
|
855,861
|
|
502,995
|
|
|
Short-term notes
payable
|
1,413,380
|
|
881,184
|
|
|
Amounts due to related
parties
|
701
|
|
143
|
|
|
Other
payables
|
649,544
|
|
667,854
|
|
|
Advance from
customers
|
151,460
|
|
135,512
|
|
|
Derivative
liabilities
|
10,478
|
|
2,622
|
|
|
Operating lease
liabilities
|
10,366
|
|
12,185
|
|
|
Other current
liabilities
|
170,207
|
|
242,783
|
|
Total current
liabilities
|
4,783,547
|
|
4,038,148
|
|
Accrued warranty
costs
|
61,552
|
|
45,146
|
|
Long-term
borrowings
|
780,149
|
|
523,634
|
|
Convertible
notes
|
225,271
|
|
224,675
|
|
Liability for uncertain
tax positions
|
7,776
|
|
7,448
|
|
Deferred tax
liabilities
|
46,382
|
|
48,150
|
|
Loss contingency
accruals
|
14,088
|
|
15,148
|
|
Operating lease
liabilities
|
20,652
|
|
23,215
|
|
Financing
liabilities
|
44,998
|
|
53,641
|
|
Other non-current
liabilities
|
284,254
|
|
282,699
|
|
TOTAL
LIABILITIES
|
6,268,669
|
|
5,261,904
|
|
Equity:
|
|
|
|
|
|
Common
shares
|
835,543
|
|
835,543
|
|
|
Additional paid-in
capital
|
(13,657)
|
|
(19,428)
|
|
|
Retained
earnings
|
1,119,221
|
|
1,035,552
|
|
|
Accumulated other
comprehensive loss
|
(152,208)
|
|
(50,584)
|
|
Total Canadian Solar
Inc. shareholders'
equity
|
1,788,899
|
|
1,801,083
|
|
Non-controlling
interests in subsidiaries
|
322,522
|
|
325,355
|
|
TOTAL
EQUITY
|
2,111,421
|
|
2,126,438
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
8,380,090
|
|
$
7,388,342
|
|
View original
content:https://www.prnewswire.com/news-releases/canadian-solar-reports-second-quarter-2022-results-301608382.html
SOURCE Canadian Solar Inc.