Canadian Solar reports significant drop in revenue in second quarter

Canadian Solar CEO Shawn Qu

Canadian Solar reported revenue of $696 million in the second quarter of 2020, compared to $826 million in the first quarter of 2020, and $1,036 million in the second quarter of 2019.

Canadian Solar’s 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.

Canadian Solar shipped 281 MW to the company’s utility-scale solar power projects in the second quarter of 2020.

Canadian Solar faced dip in average module selling prices (ASP) and limited project sales due to the impact of COVID-19.

Canadian Solar recently announced the financial closing of the 367 MWp Maplewood projects in Texas.

Canadian Solar reported gross profit of $147 million in the second quarter of 2020, 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 percent, compared to 27 percent in the first quarter of 2020, and 17.6 percent in the second quarter of 2019.

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.”

Canadian Solar shipped 2.9 GW of modules to more than 80 countries in Q2 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 percent of the company’s module shipments in the second quarter of 2020, and mono-crystalline modules accounted for 35 percent.

Canadian Solar 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.

As of June 30, 2020, Canadian Solar’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.

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.

Canadian Solar 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 own projects, in the third quarter of 2020.

Canadian Solar said revenues are expected to be in the range of $840 million to $890 million, with gross margin expected to be between 14 percent and 16 percent in the third quarter of 2020.

Canadian Solar expects shipments to be in the range of 11 GW to 12 GW for the full year of 2020.