Maxeon Solar’s Q3/2021 Financial Results

Dealing With Supply Chain Challenges, Maxeon Improved Q3 Revenues

Maxeon Solar’s Q3/2021 Financial Results

Despite supply chain challenges and high raw materials costs, Maxeon Solar Technologies was able to increase its overall revenues and curtailed gross loss in the guided range. (Source: Maxeon Solar Technologies)

  • Maxeon Solar’s Q3/2021 revenues improved on YoY and QoQ basis, with European DG segment showing strong growth
  • It restarted the Malaysian fab reopened during the quarter and Mexicali fab ramp up remains on schedule
  • Freight costs and wafer costs during the quarter were higher than expected, but management taking steps to deal with the situation that’s not likely to improve until mid-2022
  • It added around 400 MW to its US utility scale backlog and earned 200 MW order in India

Maxeon Solar Technologies met its shipment and revenue guidance for Q3/2021 reporting 566 MW and $220.48 million, respectively. It was a record quarter for the Singapore headquartered company’s distributed generation (DG) segment in the European Union (EU). Maxeon also added up to 400 MW to its US utility scale backlog and locked in its maiden project in India with close to 200 MW capacity.

“We also saw freight and wafer cost increases during the 3rd quarter beyond our expectations and those of many industry observers,” explained CFO Kai Strohbecke. “Our projections provided during the last earnings call did not anticipate the length and impact of China’s Ningbo Port closure in late August, congestion in September at the ports of Long Beach and Los Angeles and China’s September energy curtailment impacting the wafer industry.”

During Q3/2021, the company estimates its supply chain to have cost it around $33 million or 15% of the total sales on YoY basis, comprising freight, silicon, aluminum and copper. Gross loss of $-16.7 million was within the guided range thanks to supply chain and COVID reopening process costs.

The company’s highest exposure to supply chain inflation came from outbound Asia freight pricing, it admitted. Management doesn’t expect any significant changes to the overall supply chain conditions for the solar industry until mid-2022.

The SunPower spin-off said it is dealing with this challenge by establishing outbound Asia railway transport capabilities. Other measures the management said it is taking includes ensuring over 20% packing density advantage for Maxeon 6 modules and ramping up its Mexicali performance line in Mexico to reduce the distance between its products and the US market.

“We recently made our first G12 format solar cells in Fab 3, and we’re on track to begin performance line module shipments from our Mexicali Modco in the second quarter of 2022,” shared CEO Jeff Waters.

Plans for the US where Maxeon plans to build 3 GW performance line cell and module capacity, remains on track as its loan application with the US Department of Energy (DOE) moves forward.

Meanwhile, in the reporting quarter the solar cell and module producer from Singapore reopened its Malaysia fab post a COVID-19 outbreak. It also brought online the Maxeon 7 pilot line with its highest efficiency ‘ever recorded’.

Guidance

In Q4/2021, Maxeon guides to ship 540 MW to 570 MW capacity and report revenues in the range of $215 million to $235 million. It hopes to further narrow its gross loss to between $5 million to $15 million. Adjusted EBITDA is guided in the negative as $-32 million and $-42 million. Between $13 million and $17 million is guided as out-of-market (OOM) polysilicon cost.

New order from TotalEnergies

Separately, Maxeon declared receiving a 400 MW order from France’s TotalEnergies for its high efficiency bifacial Performance 5 UPP panels. These panels will use G12 mono-PERC solar cells that the company will produce in Malaysia and assemble in Mexicali, Mexico. The modules will be available commercially in 2022.

The French company will deploy the same modules in its Danish Fields Solar Power Plant near Houston, Texas in the US. Maxeon will target to deliver the panels in late 2022 through Q3/2023.

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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