Canadian Solar

Last modified by Asif Farooqui on 2024/01/20 14:52

Contents

Summary
Recent Developments
Financial Highlights
Company Overview
References

Summary

Canadian Solar was founded in 2001 and is a solar technology and renewable energy companies.
It is a leading manufacturer of solar photovoltaic modules, provider of solar energy and battery storage solutions.
Over the past 22 years, Canadian Solar has successfully delivered over 110 GW solar photovoltaic modules across the world.

Canadian Solar (Nasdaq: CSIQ, LSE: 0XGH) was founded in 2001 and is a 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.¹

Recent Developments

Canadian Solar's e-STORAGE Launches SolBank 3.0²

Dec. 12, 2023; Canadian Solar Inc. announced that e-STORAGE, which is part of the Company's majority-owned subsidiary CSI Solar Co., Ltd. ("CSI Solar"), will launch SolBank 3.0, the latest iteration of its utility-scale energy storage system.

With a power up to 2.35 MW and capacity of 5 MWh, SolBank 3.0 seamlessly integrates high energy density cells, advanced safety system, smart liquid cooling, and active balance system controls. Solbank 3.0, housed in a 20-ft container, boasts a remarkable up to 45% increase in product-level capacity and up to 40% decrease in commissioning time, compared to its previous generation.

SolBank 3.0 is equipped with a pack and electrical redundancy protection system, smart abnormal performance detection, multi-level fire alarm, and suppression protection, all of these ensuring product safety. At the same time, the optimized thermal management system reduces auxiliary power consumption by up to 30% compared to the previous generation. SolBank 3.0's flexible and modular design is compatible with different power conversion systems (PCS).

Canadian Solar Announces 5 Gw Solar Wafer Facility in Thailand³

Nov. 9, 2023; announced that it is establishing a 5 GW solar PV wafer production facility in Chonburi, Thailand.

Canadian Solar is building a state-of-the-art solar photovoltaic N-type wafer manufacturing plant with an annual output of 5 GW, which is slated to begin production in March 2024. The solar wafers produced at this facility will initially be used at the existing Thailand TOPCon cell manufacturing plant in the same location. From 2025 onwards and once the previously announced 5 GW U.S. cell factory in Jeffersonville, Indiana, becomes fully operational, these wafers will be used as inputs to the Indiana cell factory.

Financial Highlights

Third Quarter 2023 Results⁴

Total module shipments recognized as revenues in the third quarter of 2023 were 8.3 GW, up 39% yoy and 1% qoq. Of the total, 82 MW were shipped to the Company's own utility-scale solar power projects.

Net revenues in the third quarter of 2023 decreased 22% qoq and 4% yoy to $1.8 billion. The sequential decrease reflects lower project sales during the quarter and a decline in module average selling price ("ASP"), partially offset by higher solar module shipment volumes.

Gross profit in the third quarter of 2023 was $308 million, down 30% qoq and 15% yoy. Gross margin in the third quarter of 2023 was 16.7%, compared to 18.6% in the second quarter of 2023. The gross margin decline was primarily driven by lower margin contribution from project sales and lower module ASPs, partially offset by lower manufacturing costs.

Total operating expenses in the third quarter of 2023 were $225 million, compared to $216 million in the second quarter of 2023 and $274 million in the third quarter of 2022. The sequential increase was driven by higher transportation, TOPCon production ramp up and R&D costs, which were partially offset by a sequential reduction in share-based compensation following the successful CSI Solar IPO in the second quarter of 2023.

Depreciation and amortization charges in the third quarter of 2023 were $76 million, compared to $73 million in the second quarter of 2023 and $56 million in the third quarter of 2022. The sequential increase was primarily driven by the Company's continued capacity expansion.

Net interest expense in the third quarter of 2023 was $11 million, compared to net interest expense of $21 million in the second quarter of 2023 and net interest income of $4 million in the third quarter of 2022. The sequential decrease in net interest expense was due to higher interest income on the Company's cash balance.

Net foreign exchange and derivative loss in the third quarter of 2023 was $17 million, compared to a net gain of $34 million in the second quarter of 2023 and a net gain of $39 million in the third quarter of 2022. The net foreign exchange and derivative loss was mainly due to weaker Euro relative to the U.S. Dollar and hedging losses on Renminbi.

Net income attributable to Canadian Solar in the third quarter of 2023 was $22 million, or $0.32 per diluted share, compared to net income of $170 million, or $2.39 per diluted share, in the second quarter of 2023, and net income of $78 million, or $1.12 per diluted share, in the third quarter of 2022.

Net cash flow provided by operating activities in the third quarter of 2023 was $158 million, compared to $290 million in the second quarter of 2023. The sequential decrease in operating cash flow primarily resulted from lower net profit.

Total debt was $3.3 billion as of September 30, 2023, including $1,720 million, $1,381 million, and $227 million related to CSI Solar, Recurrent Energy and convertible bonds respectively. Total debt remained unchanged compared to $3.3 billion as of June 30, 2023.

Company Overview

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 22 years, Canadian Solar has successfully delivered over 110 GW of premium-quality, solar photovoltaic modules to customers across the world.

Currently, the Company has around 850 MWp of solar power projects in operation, 7.8 GWp of projects under construction or in backlog (late-stage), and an additional 18.7 GWp of projects in the advanced and early-stage pipeline. In addition, the Company has a total battery storage project development pipeline of approximately 55 GWh, including approximately 5 GWh under construction or in backlog, and an additional 50 GWh at advanced and early-stage development. 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.

The company has operations in North America, South America, Europe, South Africa, the Middle East, Australia and Asia through its operating subsidiaries in which Canadian Solar has equity ownership.

The company's business operations are divided into two business segments, namely CSI Solar and Global Energy.

Under CSI Solar, the company design, develop and manufacture solar ingots, wafers, cells, modules and other solar power and battery storage products. The company conduct most of its manufacturing operations in China and Southeast Asia. The company's products are used for residential, commercial and industrial solar power generation systems. The company sell its solar module products primarily under its “Canadian Solar” brand name. The company also deliver bankable, end-to-end, utility-scale, turnkey battery storage system solutions across various applications. These storage system solutions are complemented with long-term service agreements which include future battery capacity augmentation services.

The company's Global Energy segment primarily comprises solar and battery storage project development and sale, O&M and asset management services for operational projects, sale of electricity, and investment in retained assets. The company's expertise spans from sourcing land, interconnection agreements, structuring PPAs, and obtaining permits and other requirements. The company's monetization strategies vary between develop-tosell, build-to-sell, and partial build-to-own, depending on business strategies and market conditions, with the goal of maximizing profits, accelerating cash return, minimizing capital risk, and building recurring income. While the company plan to continue to monetize its current portfolio, the company also intend to grow its energy business by building up its project development pipeline.