2023-10-02
CANADIAN SOLAR REPORTS SECOND QUARTER 2023 RESULTSHighlights
Dr.
“In addition, we made the strategic decision to rebrand our utility-scale turnkey battery energy storage business under our new e-STORAGE brand, which we believe more clearly articulates our business. We continue to build momentum in this fast-growing business, with our e-STORAGE platform now having a contracted backlog of
Dr.
Second Quarter 2023 Results
Total module shipments recognized as revenues in the second quarter of 2023 were 8.2 GW, up 62% yoy and 35% qoq. Of the total, 41 MW were shipped to the Company’s own utility-scale solar power projects.
Net revenues in the second quarter of 2023 increased 39% qoq and 2% yoy to
Gross profit in the second quarter of 2023 was $441 million, up 39% qoq and 19% yoy. Gross margin in the second quarter of 2023 was 18.6%, compared to 18.7% in the first quarter of 2023. The gross margin decline was primarily due to the decline in module ASPs that adversely impacted the broader industry, and a
Total operating expenses in the second quarter of 2023 were $216 million, compared to $172 million in the first quarter of 2023 and
Depreciation and amortization charges in the second quarter of 2023 were $73 million, compared to $68 million in the first quarter of 2023 and
Net interest expense in the second quarter of 2023 was $21 million, compared to
Net foreign exchange and derivative gain in the second quarter of 2023 was
Net income attributable to
Net cash flow provided by operating activities in the second quarter of 2023 was $290 million, compared to
Total debt was
Total project assets were
The net value of solar power systems was
Corporate Structure
The Company has two business segments: Recurrent Energy, formerly Global Energy, and
Recurrent Energy Segment (formerly Global Energy)
As of
While Recurrent Energy’s business model was historically develop-to-sell, as previously communicated, the Company is in the process of adjusting its strategy to create greater asset value and retain greater ownership of projects in select markets to increase revenues generated through recurring income, such as power sales, operations and maintenance, and asset management income.
The business model will consist of three key drivers:
Recurrent Energy is continuing to evaluate adjustments in its growth strategy to hold valuable solar assets for the longer term.
Project Development Pipeline – Solar
As of
The following table presents Recurrent Energy’s total solar project development pipeline.
Solar Project Development Pipeline (as of |
||||||
Region |
In |
Backlog |
Advanced |
Early-Stage |
Total |
|
|
– |
422 |
1,642 |
4,559 |
6,623 |
|
|
1,228** |
2,272** |
887 |
451 |
4,838 |
|
|
89 |
1,596 |
2,770 |
3,499 |
7,954 |
|
|
4 |
170 |
14 |
– |
188 |
|
|
300 |
1,745** |
– |
1,500 |
3,545 |
|
|
– |
3 |
1,001 |
837 |
1,841 |
|
Total |
1,621 |
6,208 |
6,314 |
10,846 |
24,989 |
|
*All numbers are gross MWp. **Including 671 MWp in construction and 711 MWp in backlog that are owned by or already sold to third parties. |
Project Development Pipeline – Battery Energy Storage
As of
The table below sets forth Recurrent Energy’s total storage project development pipeline.
Energy Storage Project Development Pipeline (as of |
|||||
Region |
In |
Backlog |
Advanced |
Early-Stage |
Total |
|
– |
– |
3,898 |
14,747 |
18,645 |
|
– |
1,085 |
2,040 |
– |
3,125 |
EMEA |
– |
110 |
4,418 |
14,769 |
19,297 |
|
– |
– |
– |
1,054 |
1,054 |
|
– |
– |
– |
7,500 |
7,500 |
|
24 |
454 |
200 |
1,440 |
2,118 |
Total |
24 |
1,649 |
10,556 |
39,510 |
51,739 |
Projects in Operation – Solar and Battery Energy Storage Power Plants
As of
Solar Power Plants in Operation – MWp* |
||||
|
|
|
ex. |
Total |
508 |
76 |
85 |
12 |
681 |
*All numbers are net MWp owned by Recurrent Energy; total gross MWp of projects is 1,135 MWp, including volume that is already sold |
As of
Operating Results
The following table presents select unaudited results of operations data of the Recurrent Energy segment for the periods indicated.
Recurrent Energy Segment Financial Results (In Thousands of |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2023 |
2023 |
2022 |
2023 |
2022 |
|||
Net revenues |
360,045 |
20,052 |
553,984 |
380,097 |
646,950 |
||
Cost of revenues |
201,981 |
12,843 |
473,979 |
214,824 |
549,109 |
||
Gross profit |
158,064 |
7,209 |
80,005 |
165,273 |
97,841 |
||
Operating expenses |
35,874 |
22,414 |
24,326 |
58,288 |
43,173 |
||
Income (loss) from |
122,190 |
(15,205) |
55,679 |
106,985 |
54,668 |
||
Gross margin |
43.9 % |
36.0 % |
14.4 % |
43.5 % |
15.1 % |
||
Operating margin |
33.9 % |
-75.8 % |
10.1 % |
28.1 % |
8.5 % |
||
* 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
Solar Modules
Solar Manufacturing Capacity, GW* |
||||
Actual |
Plan |
Plan |
Plan |
|
Ingot |
20.4 |
20.4 |
20.4 |
50.4 |
Wafer |
21.0 |
21.0 |
30.0 |
60.0 |
Cell |
26.0 |
50.0 |
54.0 |
70.0 |
Module |
37.7 |
50.0 |
59.0 |
80.0 |
*Nameplate annualized capacities at said point in time. Capacity expansion plans are subject to change without notice |
Battery Storage Solutions
e-STORAGE, formerly known as CSI Energy Storage, is
As of
During the second quarter of 2023, e-STORAGE signed approximately
The table below sets forth e-STORAGE’s battery storage manufacturing capacity expansion targets.
Battery Storage Manufacturing |
Actual |
Plan |
SolBank |
2.5 |
10.0 |
*Nameplate annualized capacities at said point in time. Capacity expansion plans are subject to change without notice |
Operating Results
The following table presents select unaudited results of operations data of the
CSI Solar Segment Financial Results* (In Thousands of |
|||||||||
Three Months Ended |
Six Months Ended |
||||||||
|
|
2022 |
|
2022 |
|||||
Net revenues |
2,013,993 |
1,709,730 |
1,816,410 |
3,723,723 |
3,026,404 |
||||
Cost of revenues |
1,726,154 |
1,394,121 |
1,526,755 |
3,120,275 |
2,560,920 |
||||
Gross profit |
287,839 |
315,609 |
289,655 |
603,448 |
465,484 |
||||
Operating expenses |
168,455 |
146,151 |
227,262 |
314,606 |
371,193 |
||||
Income from operations |
119,384 |
169,458 |
62,393 |
288,842 |
94,291 |
||||
Gross margin |
14.3 % |
18.5 % |
15.9 % |
16.2 % |
15.4 % |
||||
Operating margin |
5.9 % |
9.9 % |
3.4 % |
7.8 % |
3.1 % |
||||
*Include effects of both sales to third-party customers and to the Company’s Recurrent Energy segment. Please refer to the |
The table below provides the geographic distribution of the net revenues of CSI Solar:
CSI Solar Net Revenues Geographic Distribution* (In Millions of |
||||||||
Q2 2023 |
% of Net |
Q1 2023 |
% of Net |
Q2 2022 |
% of Net |
|||
|
722 |
36 |
555 |
33 |
587 |
33 |
||
|
716 |
36 |
632 |
38 |
742 |
42 |
||
|
566 |
28 |
494 |
29 |
431 |
25 |
||
Total |
2,004 |
100 |
1,681 |
100 |
1,760 |
100 |
||
*Excludes sales from |
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, the 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, supply chain constraints, and geopolitical conflicts. Management’s views and estimates are subject to change without notice.
For the third quarter of 2023, the Company expects total revenue to be in the range of
For the full year of 2023, the Company reiterates its prior outlook for
Dr.
Recent Developments
On
Recurrent Energy (formerly Global Energy)
On
On
On
On
On
On
On
On
On
On
Conference Call Information
The Company will hold a conference call on
A replay of the call will be available 2 hours after the conclusion of the call until
About
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
Investor Relations Contacts:
Investor Relations |
Tel: +1-914-337-8801 |
FINANCIAL TABLES FOLLOW
The following tables provide unaudited select financial data for the Company’s
Select Financial Data – |
||||||||
Three Months Ended and As of (In Thousands of |
||||||||
|
Recurrent |
Elimination |
Total |
|||||
Net revenues |
|
|
|
|
||||
Cost of revenues |
1,726,154 |
201,981 |
(4,686) |
1,923,449 |
||||
Gross profit |
287,839 |
158,064 |
(5,329) |
440,574 |
||||
Gross margin |
14.3 % |
43.9 % |
— |
18.6 % |
||||
Income from operations (2) |
|
|
|
|
||||
Supplementary |
||||||||
Interest expense (3) |
|
|
|
|
||||
Interest income (3) |
7,550 |
1,905 |
1 |
9,456 |
||||
Cash and cash equivalents |
|
|
|
|
||||
Restricted cash – current and |
1,227,340 |
11,374 |
— |
1,238,714 |
||||
Non-recourse borrowings |
— |
296,668 |
— |
296,668 |
||||
Other short-term and long- |
1,735,482 |
881,059 |
— |
2,616,541 |
Select Financial Data – |
||||||||
Six Months Ended (In Thousands of |
||||||||
|
Recurrent Energy |
Elimination |
Total |
|||||
Net revenues |
|
|
|
|
||||
Cost of revenues |
3,120,275 |
214,824 |
(28,370) |
3,306,729 |
||||
Gross profit |
603,448 |
165,273 |
(10,146) |
758,575 |
||||
Gross margin |
16.2 % |
43.5 % |
— |
18.7 % |
||||
Income from operations (2) |
|
|
|
|
||||
Supplementary |
||||||||
Interest expense (3) |
|
|
|
|
||||
Interest income (3) |
14,027 |
3,357 |
28 |
17,412 |
Select Financial Data – |
||||||||
Three Months Ended and As of |
||||||||
|
Recurrent Energy |
Elimination |
Total |
|||||
Net revenues |
|
|
|
|
||||
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) |
|
|
|
|
||||
Supplementary |
||||||||
Interest expense (3) |
|
|
|
|
||||
Interest income (3) |
3,955 |
261 |
— |
4,216 |
||||
Cash and cash equivalents |
|
|
|
|
||||
Restricted cash – current and |
889,745 |
5,042 |
— |
894,787 |
||||
Non-recourse borrowings |
36,595 |
263,586 |
— |
300,181 |
||||
Other short-term and long- |
1,348,771 |
652,747 |
— |
2,001,518 |
Select Financial Data – |
||||||||
Six Months Ended |
||||||||
|
Recurrent Energy |
Elimination |
Total |
|||||
Net revenues |
|
|
|
|
||||
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) |
|
|
|
|
||||
Supplementary |
||||||||
Interest expense (3) |
|
|
|
|
||||
Interest income (3) |
6,857 |
1,571 |
— |
8,428 |
(1) Includes inter-segment elimination, and unallocated corporate costs not considered part of management’s evaluation of business segment operating performance. |
(2) Income from operations reflects management’s allocation and estimate as some services are shared by the Company’s two business segments. |
(3) Represents interest expenses payable to and interest income earned from third parties. |
Select Financial Data – |
|||||
Three Months Ended |
Three Months Ended |
Three Months Ended |
|||
(In Thousands of |
|||||
|
|||||
Solar modules |
|
|
|
||
Solar system kits |
216,867 |
133,587 |
150,765 |
||
Utility-scale battery storage |
13,438 |
9,815 |
227,438 |
||
Residential battery storage |
1,451 |
4,995 |
— |
||
EPC and others |
49,535 |
77,956 |
31,504 |
||
Subtotal |
2,003,978 |
1,681,229 |
1,760,202 |
||
Recurrent Energy Revenues: |
|||||
Solar and battery storage projects |
338,487 |
4,621 |
540,056 |
||
O&M and asset management services |
13,408 |
8,687 |
7,745 |
||
Electricity sales and others |
8,150 |
6,744 |
6,183 |
||
Subtotal |
360,045 |
20,052 |
553,984 |
||
Total net revenues |
|
|
|
Select Financial Data – |
|||
Six Months Ended |
Six Months Ended |
||
(In Thousands of |
|||
|
|||
Solar modules |
|
|
|
Solar system kits |
350,454 |
241,221 |
|
Utility-scale battery storage |
23,253 |
309,938 |
|
Residential battery storage |
6,446 |
— |
|
EPC and others |
127,491 |
52,886 |
|
Subtotal |
3,685,207 |
2,917,585 |
|
Recurrent Energy Revenues: |
|||
Solar and battery storage projects |
343,108 |
618,448 |
|
O&M and asset management services |
22,095 |
15,693 |
|
Electricity sales and others |
14,894 |
12,809 |
|
Subtotal |
380,097 |
646,950 |
|
Total net revenues |
|
|
|
||||||||||||
Unaudited Condensed Consolidated Statements of Operations |
||||||||||||
(In Thousands of |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
|
|
|
|
|
||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
||||||||
Net revenues |
|
|
|
|
|
|||||||
Cost of revenues |
1,923,449 |
1,383,280 |
1,943,136 |
3,306,729 |
3,012,594 |
|||||||
Gross profit |
440,574 |
318,001 |
371,050 |
758,575 |
551,941 |
|||||||
Operating expenses: |
||||||||||||
Selling and distribution |
87,686 |
88,371 |
158,017 |
176,057 |
266,862 |
|||||||
General and |
139,571 |
78,648 |
87,920 |
218,219 |
150,730 |
|||||||
Research and |
23,137 |
17,307 |
18,050 |
40,444 |
31,330 |
|||||||
Other operating income, |
(33,943) |
(11,929) |
(9,054) |
(45,872) |
(28,613) |
|||||||
Total operating expenses |
216,451 |
172,397 |
254,933 |
388,848 |
420,309 |
|||||||
Income from operations |
224,123 |
145,604 |
116,117 |
369,727 |
131,632 |
|||||||
Other income (expenses): |
||||||||||||
Interest expense |
(30,455) |
(20,448) |
(19,709) |
(50,903) |
(35,011) |
|||||||
Interest income |
9,456 |
7,956 |
4,216 |
17,412 |
8,428 |
|||||||
Gain (loss) on change in |
(23,775) |
7,601 |
(4,869) |
(16,174) |
(29,607) |
|||||||
Foreign exchange gain |
57,532 |
(20,860) |
11,333 |
36,672 |
39,195 |
|||||||
Investment income, net |
1,955 |
8,380 |
6,984 |
10,335 |
1,460 |
|||||||
Total other income |
14,713 |
(17,371) |
(2,045) |
(2,658) |
(15,535) |
|||||||
Income before income taxes |
238,836 |
128,233 |
114,072 |
367,069 |
116,097 |
|||||||
Income tax expense |
(46,019) |
(28,715) |
(27,731) |
(74,734) |
(22,548) |
|||||||
Equity in earnings of affiliates |
4,719 |
7,311 |
2,214 |
12,030 |
3,940 |
|||||||
Net income |
197,536 |
106,829 |
88,555 |
304,365 |
97,489 |
|||||||
Less: Net income |
27,566 |
23,117 |
14,093 |
50,683 |
13,820 |
|||||||
Net income attributable to |
|
|
|
|
|
|||||||
Earnings per share – basic |
$ 2.62 |
$ 1.30 |
$ 1.16 |
$ 3.92 |
$ 1.30 |
|||||||
Shares used in computation – |
64,912,928 |
64,517,935 |
64,262,556 |
64,716,522 |
64,146,383 |
|||||||
Earnings per share – diluted |
$ 2.39 |
$ 1.19 |
$ 1.07 |
$ 3.58 |
$ 1.21 |
|||||||
Shares used in computation – |
71,689,925 |
71,424,749 |
71,103,568 |
71,571,041 |
71,067,215 |
|
||||||||||
Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss) |
||||||||||
(In Thousands of |
||||||||||
Three Months Ended |
Six Months Ended |
|||||||||
|
|
|
|
|
||||||
2023 |
2023 |
2022 |
2023 |
2022 |
||||||
Net Income |
|
|
|
|
|
|||||
Other comprehensive income |
||||||||||
Foreign currency translation |
(68,507) |
23,250 |
(126,367) |
(45,257) |
(118,856) |
|||||
Gain (loss) on changes in fair |
(1,050) |
339 |
229 |
(711) |
229 |
|||||
Gain (loss) on interest rate |
(67) |
(105) |
160 |
(172) |
350 |
|||||
Share of gain (loss) on changes |
503 |
(610) |
— |
(107) |
— |
|||||
Comprehensive income (loss) |
128,415 |
129,703 |
(37,423) |
258,118 |
(20,788) |
|||||
Less: comprehensive income |
3,690 |
25,162 |
(3,960) |
28,852 |
(2,833) |
|||||
Comprehensive income (loss) |
|
|
|
|
|
|
|||||||
Unaudited Condensed Consolidated Balance Sheets |
|||||||
(In Thousands of |
|||||||
|
|
||||||
2023 |
2022 |
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
|
|
|||||
Restricted cash |
1,234,008 |
978,116 |
|||||
Accounts receivable trade, net |
1,266,608 |
970,950 |
|||||
Accounts receivable, unbilled |
65,282 |
57,770 |
|||||
Amounts due from related parties |
71,249 |
48,614 |
|||||
Inventories |
1,532,149 |
1,524,095 |
|||||
Value added tax recoverable |
186,349 |
158,773 |
|||||
Advances to suppliers, net |
333,182 |
253,484 |
|||||
Derivative assets |
7,637 |
17,516 |
|||||
Project assets |
339,916 |
385,964 |
|||||
Prepaid expenses and other current assets |
269,228 |
267,941 |
|||||
Total current assets |
7,317,033 |
5,644,657 |
|||||
Restricted cash |
4,706 |
9,953 |
|||||
Property, plant and equipment, net |
2,000,396 |
1,826,643 |
|||||
Solar power systems, net |
612,518 |
364,816 |
|||||
Deferred tax assets, net |
219,367 |
229,226 |
|||||
Advances to suppliers, net |
140,430 |
65,352 |
|||||
Investments in affiliates |
159,486 |
115,784 |
|||||
Intangible assets, net |
13,942 |
17,530 |
|||||
Project assets |
347,012 |
438,529 |
|||||
Right-of-use assets |
146,364 |
103,600 |
|||||
Amounts due from related parties |
35,423 |
33,489 |
|||||
Other non-current assets |
201,973 |
187,549 |
|||||
TOTAL ASSETS |
|
|
|
|||||
Unaudited Condensed Consolidated Balance Sheets (Continued) |
|||||
(In Thousands of |
|||||
|
|
||||
2023 |
2022 |
||||
Current liabilities: |
|||||
Short-term borrowings |
|
|
|||
Accounts payable |
770,606 |
805,300 |
|||
Short-term notes payable |
1,703,615 |
1,493,399 |
|||
Amounts due to related parties |
11,306 |
89 |
|||
Other payables |
798,032 |
853,040 |
|||
Advances from customers |
313,971 |
334,943 |
|||
Derivative liabilities |
18,113 |
25,359 |
|||
Operating lease liabilities |
10,693 |
9,810 |
|||
Other current liabilities |
477,091 |
293,012 |
|||
Total current liabilities |
6,002,482 |
5,258,768 |
|||
Long-term borrowings |
1,014,154 |
813,406 |
|||
Convertible notes |
226,695 |
225,977 |
|||
Liability for uncertain tax positions |
5,730 |
5,730 |
|||
Deferred tax liabilities |
68,457 |
66,630 |
|||
Loss contingency accruals |
7,150 |
5,000 |
|||
Operating lease liabilities |
75,707 |
25,714 |
|||
Other non-current liabilities |
357,001 |
329,209 |
|||
TOTAL LIABILITIES |
7,757,376 |
6,730,434 |
|||
Equity: |
|||||
Common shares |
835,543 |
835,543 |
|||
Additional paid-in capital |
241,557 |
1,127 |
|||
Retained earnings |
1,529,202 |
1,275,520 |
|||
Accumulated other comprehensive loss |
(158,782) |
(170,551) |
|||
|
2,447,520 |
1,941,639 |
|||
Non-controlling interests |
993,754 |
365,055 |
|||
TOTAL EQUITY |
3,441,274 |
2,306,694 |
|||
TOTAL LIABILITIES AND EQUITY |
|
|
|
||||||||||
Unaudited Condensed Statements of Cash Flows |
||||||||||
(In Thousands of |
||||||||||
Three Months Ended |
Six Months Ended |
|||||||||
|
|
|
|
|
||||||
2023 |
2023 |
2022 |
2023 |
2022 |
||||||
Operating Activities: |
||||||||||
Net income |
|
|
|
|
|
|||||
Adjustments to reconcile net |
190,634 |
67,738 |
57,852 |
258,372 |
173,944 |
|||||
Changes in operating assets |
(98,611) |
(127,395) |
146,857 |
(226,006) |
181,130 |
|||||
Net cash provided by operating |
289,559 |
47,172 |
293,264 |
336,731 |
452,563 |
|||||
Investing Activities: |
||||||||||
Purchase of property, plant and |
(283,065) |
(233,032) |
(147,629) |
(516,097) |
(235,629) |
|||||
Purchase of solar power |
(36,329) |
(109,866) |
— |
(146,195) |
(101) |
|||||
Other investing activities |
(17,927) |
(11,083) |
(8,056) |
(29,010) |
(10,825) |
|||||
Net cash used in investing |
(337,321) |
(353,981) |
(155,685) |
(691,302) |
(246,555) |
|||||
Financing Activities: |
||||||||||
Net proceeds from subsidiary’s |
803,645 |
— |
— |
803,645 |
— |
|||||
Other financing activities |
547,492 |
379,749 |
212,743 |
927,241 |
440,354 |
|||||
Net cash provided by financing |
1,351,137 |
379,749 |
212,743 |
1,730,886 |
440,354 |
|||||
Effect of exchange rate changes |
(128,769) |
33,090 |
(95,453) |
(95,679) |
(132,290) |
|||||
Net increase in cash, cash |
1,174,606 |
106,030 |
254,869 |
1,280,636 |
514,072 |
|||||
Cash, cash equivalents and |
|
|
|
|
|
|||||
Cash, cash equivalents and |
|
|
|
|
|
View original content:https://www.prnewswire.com/news-releases/canadian-solar-reports-second-quarter-2023-results-301906590.html
SOURCE