Greentech Lead America: Canadian Solar has reported net revenue of $263.6 million for the first quarter of 2013, down 10.6 percent from $294.8 million in the fourth quarter of 2012 and down 19.1 percent from $325.8 million in the first quarter of 2012.
Solar module shipments were 340 MW, compared to 404 MW in the fourth quarter of 2012. Solar module shipments to Japan were up 75.9 percent from the fourth quarter of 2012, representing 24.5 percent of total shipments.
Revenue derived from the Company’s total solutions business represented 19.2 percent of total revenue, compared to 12.8 percent in the fourth quarter of 2012.
Gross margin was 9.7 percent, compared to 5.0 percent in the fourth quarter of 2012.
By geography, in the first quarter of 2013, sales to European markets represented 24.7 percent of net revenue, sales to North America represented 17.9 percent of net revenue, and sales to Asia and all other markets represented 57.4 percent of net revenue, compared to 40.6 percent, 20.0 percent and 39.4 percent, respectively, in the fourth quarter of 2012 and 42.6 percent, 45.1 percent and 12.3 percent, respectively, in the first quarter of 2012.
Gross profit in the first quarter of 2013 was $25.6 million, compared to $14.9 million in the fourth quarter of 2012 and $25.1 million in the first quarter of 2012.
The sequential quarterly increase in gross profit was primarily due to a stable average selling price and lower inventory write-offs, which more than compensated for the lower shipment volume. The year-over-year increase in gross profit was primarily due to lower manufacturing cost which was partially offset by the decline in average selling price during the period.
In the first quarter of 2013, the Company recorded in cost of revenue a depreciation charge of $6.1 million relating to underutilized assets, representing 2.3 percent of revenue. Gross margin in the first quarter of 2013 was 9.7 percent, compared to 5.0 percent in the fourth quarter of 2012 and 7.7 percent in the first quarter of 2012.
Shawn Qu, chairman and chief executive officer of Canadian Solar, remarked: “We are pleased with our first quarter results and our progress in the execution of our strategy. Our shipments of 340 MW exceeded our initial guidance of 290 MW to 310 MW, while gross margin came in at the high-end of our guidance.”
Canadian Solar is currently in the process of building three solar power plants in Ontario, Canada, totaling 29 MWdc as Engineering, Procurement and Construction (EPC) contractor. The Company expects to complete these projects in the second half of 2013.
In the U.S. market, Canadian Solar’s utility-scale project pipeline totals approximately 255 MW (dc). During the first quarter, the Company completed a 6.5 MW solar power plant in North Carolina in partnership with Strata Solar.
Subsequently, the Company announced the completion of two 1 MW AC solar power plants in Sterling, Massachusetts with INDU, a strategic partnership between Duke Energy Renewables and Integrys Energy Services.
Currently four solar power plants totaling approximately 23.5 MW are under construction, and the Company expects to complete construction of solar power plants totaling 100 MW (dc) in the U.S. in fiscal 2013. The Company expects to use percentage of completion accounting for all U.S. projects.
In Japan, Canadian Solar’s utility-scale solar power project pipeline is approximately 125 MW, including, approximately 50 MW of self-developed projects, and 75 MW through co-development or acquisitions. The Company is making feasibility assessments for approximately 400 MW of additional utility-scale solar power projects in early stages of development. The Company hopes to obtain final approval for some of its Japanese utility-scale solar power projects during 2013 and begin construction of its first solar power project in Japan in late 2013 to early 2014.
In a significant development in favor of Canadian Solar, on May 20, 2013 the Company announced that the Jiangsu Suzhou Intermediate Court dismissed the request by LDK Solar to enforce the arbitration award decision by the former Shanghai branch of the China International Economic and Trade Arbitration Commission in the amount of RMB248.9 million (approximately $40.1 million).