Canadian Solar Reports Strong Shipments in First-Quarter 2013, Looks to Asia for Growth

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Researched by Industrial Info Resources (Sugar Land, Texas)--Canadian Solar Incorporated (NASDAQ:CSIQ) (Kitchener, Ontario), a designer and manufacturer of solar products and one of the world's largest solar module producers, reported overall improvement in the first quarter of 2013, as solar module shipments were stronger than expected and the company's Asian business improved, particularly in Japan. Canadian Solar reported a net loss of $4.38 million, compared with a net loss of $21.34 million in first-quarter 2012.

Net revenues were reported to be $263.61 million, a 19.09% decrease from the same period last year. A drop in selling prices and module shipments accounted for much of the revenue decline; however, the 340 megawatts (MW) in shipments exceeded the company's initial guidance of 290 to 310 MW. Canadian Solar is beginning to see benefits from its years of investment and development in Japan, which accounted for 24.5% of total shipments, a 75.9% increase from last quarter alone. The residential solar systems business in Japan is booming, and the company also is seeing improvement in its commercial project market. More broadly, Canadian Solar is turning away from being a module supplier to being a solar power solutions provider.

Canadian Solar also reported a drop in manufacturing costs and inventory write-offs, as well as a decline in research and development expenses that was attributed to more efficient management of product development.

Industrial Info is tracking more than $1.2 billion in active projects involving Canadian Solar, including the $60 million construction of the William Rutley PV Solar Park in Cornwall, Ontario. The project involves building a 10-MW solar power station utilizing 52,260 Canadian Solar Solutions PV panels of 280 watts each, as well as associated equipment, to provide renewable energy to the local grid.

"During the quarter, we substantially reduced our reliance on the European market, which represented less than 25% of our total revenue, with the U.S. representing 17.9% and Asia representing 57% of total revenue," said Dr. Shawn Qu, the chairman and chief executive officer of Canadian Solar, in a conference call. "Clearly, we are well-positioned in the right geography and market segments. This reflects the strategic, long-term focus in the market that we have been developing over the last few years."

Module shipments are expected to be between 380 and 420 MW in the second quarter, an between 1.6 and 1.8 gigawatts for the full year. Japan is expected to account for 35% to 40% of module shipments in the second quarter. Canadian Solar's utility-scale solar power project pipeline stands at 125 MW in Japan. In the U.S. market, the pipeline totals about 255 MW, with four plants totaling 23.5 MW under construction. In Ontario, the pipeline totals 400 MW, with five projects expected to be completed in 2013, 18 to be completed in 2014, and two to be completed in 2015.

"Clearly, our strategic position in the solar industry is strong," Qu said. "This is highlighted by our fast-growing Total Solutions business in low-risk countries such as Canada, the U.S. and Japan, as well as our success in opening new markets in Asia. We remain well-positioned to retain profitability and to emerge from the current cycle as a strong and global industry leader."

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