Solar module manufacturer in the US, First Solar, Inc has reported a quarterly decrease of $454 million in its net sales for Q1/2023 even as $548 million was an increase of $182 million from last year's first quarter. The management attributes this quarterly loss to decrease in volume of modules sold to 3rd parties.
In a call with analysts to share the financial results, First Solar's CFO Alex Bradley explained that the decrease in net sales was primarily driven by an expected shift in the timing of module sales as it increased shipments to distribution centers. This was done to mitigate logistics costs and align future shipments to customers with contractual delivery schedules, along with the completion of sale of its Luz del Norte project in the third quarter.
However, the company claims the decrease was partially offset by an expected increase in module ASPs and certain earn-outs on legacy systems projects.
The manufacturer produced 2.36 GW in Q1, including 170 MW of new Series 7 technology at its 3rd Ohio fab where production is ramping up. The new fab can produce up to 10,000 modules a day and a production top bin of 535W.
Its gross profit went up 14.4% QoQ and 17.3% YoY to 20.4% in the reporting quarter with a net income of $43 million, returning it to profitability from -$8 million net loss in the previous quarter and -$43 million loss in Q1/2022 (see First Solar's Q1/2022 Financial Results).
Future looks bright to the management as it expects to qualify for approximately $0.17/W for each module sold as Inflation Reduction Act (IRA) benefit to be recognized as reduction in cost of sales in the respective period.
"The first quarter of the year reflects this direction as we commissioned our latest factory in the United States and started production of our next generation Series 7 modules, progressed our technology roadmap with a new cell efficiency record, and continued our strong bookings and ASP momentum," said CEO Mark Widmar, referring to new 3.3 GW DC fab scheduled to come online in H1/2023.
First Solar says it is sold out through 2026, excluding India, and its year-to-date contracted backlog extends into 2029. Till March 2023, its backlog was 69.4 GW, while total bookings backlog of 71.6 GW extends through 2029.
Additionally, it has now reported receiving a 2-year 2 GW order from Leeward Renewable Energy to be delivered in 2026 and 2027.
It sold 1.9 GW in Q1, and expects to sell around 2.5 GW in Q2, and around 7.6 GW in H2/2023 taking the total for the year to around 12 GW which is the company's guidance. Management has left the full year 2023 guidance unchanged at $3.4 billion to $3.6 billion for net sales and between 11.8 GW to 12.3 GW volume to be sold (see First Solar's Backlog Of Future Deliveries Now 67.7 GW).
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