CSIQ Meets Q2/2023 Shipment & Revenue Guidance

Canada-headquartered solar PV manufacturer Canadian Solar managed to meet its Q2/2023 revenue guidance, reaching the lower end with $2.4 billion, thanks to a 62% increase in solar module shipments to 8.2 GW. Nonetheless, the company has lowered its 2023 revenue guidance while adjusting manufacturing expansion plans.

Earlier, it expected to exit FY 2023 with $8.5 billion to $9.5 billion in revenues, increasing the outlook to $9.0 billion to $9.5 billion in the previous quarter (see CSIQ Shipped Over 6 GW Modules In Q1/2023).   

Now, the management has switched the 2023 revenue forecast to between $8.5 billion to $9.0 billion while retaining module and battery storage shipment guidance of 30 GW to 35 GW, and 1.8 GWh to 2.0 GWh, respectively.   

“We expect margins to rebalance through the year as we restrict the production of non-vertically integrated solar module shipments while strengthening our leadership position in premium markets and segments,” said Canadian Solar Chairman & CEO Dr Shawn Qu.  

For Q3/2023, the company has guided for revenues in the range of $1.9 billion and $2.1 billion, with a gross margin of 17.5% and 199.5%. During this quarter, Canadian Solar expects to ship 8.5 GW to 8.7 GW modules.   

Canadian Solar has revised its solar manufacturing capacity schedule since previous quarter. (Photo Credit: Canadian Solar Inc.)

The management has also revised its manufacturing capacity roadmap for the production of ingot, wafer, cell and modules through its subsidiary CSI Solar. It now aims to reach nameplate capacities of 50.4 GW, 60 GW, 70 GW and 80 GW, respectively by December 2024.   

Previously, the company had guided to a total annual capacity of 50.4 GW for ingots, 50 GW for wafers, 60 GW for cells and 75 GW for modules by March 2024. These figures have now been lowered to 20.4 GW, 30 GW, 54 GW and 59 GW, respectively, by March next year.  

Q2/2023  

Revenues for the quarter improved 39% QoQ and 2% YoY with gross profit of $441 million growing 39% QoQ and 19% YoY. Gross margin, however, declined to 18.6% due to a decline in module ASPs and $31 million inventory write-down due to a sharp decline in silicon material prices.  

“CSI Solar  achieved strong results in the second quarter despite the sharp decline in market prices. Raw material costs declined faster than anticipated and have now likely bottomed. This led to an inventory write-down of raw materials during the second quarter, directly impacting our gross margin. However, this was more than offset by operating leverage, resulting in strong operating income,” said CSI Solar President Yan Zhuang.  

The company also successfully closed the initial public offering (IPO) for CSI Solar during the period, raising around RMB 6.6 billion ($925 million) as net proceeds. The proceeds will be used to support the company’s growth plans across the solar and storage business.  

The Global Energy business segment of Canadian Solar, now renamed as Recurrent Energy, is its project development platform. Along with the name change, this business division is also transitioning to a new business model of retaining ownership of assets in select markets instead of the previous develop-to-sell model.  

Recurrent Energy pegs its current global solar development pipeline at approximately 25 GW and an energy storage development pipeline of over 52 GWh.    

Canadian Solar is one among 5 companies found to be dodging anti-circumvention tariffs under the US Department of Commerce’s final determination into the circumvention investigation (see US Circumvention Investigation Comes To A Close).  

However, the manufacturer should be in a good space by the end of 2023 when its 5 GW US fab comes online as per schedule. It recently secured 7 GW long-term contract with EDF Renewables for the same (see Huge TOPCon Order For Canadian Solar Modules In US).  

ROTH MKM’s Philip Shen notes, “CSIQ currently falls under the country-wide order of circumvention and is in the process of certifying its supply chain. We expect this process to be completed successfully and see minimal to no financial impact to the company.”