Canadian Solar faces challenges due to raw material cost increase

Shawn Qu Canadian Solar CEO

Canadian Solar posted revenue of $912.2 million (+31.8 percent), gross profit of $159.8 million with gross margin of 17.5 percent, operating expenses of $102 million (+21.3 percent) and net income of $13.3 million in the third quarter of 2017.

The increase in revenue was due to stability in selling prices.

Canadian Solar is facing challenges due to raw material cost increase and the appreciation of Chinese currency over the past few months.

Canadian Solar CEO Shawn Qu said that solar module shipments, revenue and gross margin exceeded guidance mainly due to the demand in China, and the pull-in effects in the U.S. market ahead of the Section 201 ruling.

Canadian Solar completed the ramp up of the new multi-crystalline silicon ingot casting workshop at Baotou, China with a total annual capacity of 1,100 MW, including capacity relocated from the company’s Luoyang plant. The total annual capacity is expected to reach 1,200 MW by the end of 2017 through production debottlenecking.

The new Baotou ingot factory enables Canadian Solar to reduce the amount it pays to purchase external ingots and thus reduces its all-in module manufacturing costs. Canadian Solar plans to further increase its ingot capacity to 1,720 MW by June 30, 2018, and may expand to 2,500 MW.

Canadian Solar said its wafer manufacturing capacity is now 3.0 GW and is expected to reach 5.0 GW by December 31, 2017, compared to the 4.0 GW originally planned, mainly as a result of production debottlenecking.

Canadian Solar’s solar cell manufacturing capacity was 4.7 GW. Canadian Solar plans to add cell manufacturing capacity in its Funing and South East Asia plants later this year to bring its total cell manufacturing capacity to 5.45 GW by December 31, 2017 Canadian Solar plans to add another 1.5 GW in 2018 to reach approximately 7 GW by the end of 2018.

Canadian Solar expects that its total worldwide module manufacturing capacity will exceed 8.11 GW by December 31, 2017, and may further increase it to over 10 GW by the end of 2018.