Canadian Solar has decided to cut down on its investment in increasing manufacturing capacity due to unexpected market conditions especially in China.
Canadian Solar will reduce its target in the expansion of Ingot manufacturing capacity by 355 MW to 1.65 GW by December 31, 2018.
Canadian Solar said there will be no change in its plan to increase wafer manufacturing capacity to 5 GW by December 31, 2018.
Canadian Solar will reduce its target to enhance cell manufacturing capacity by 800 MW to reach 6.25 GW by December 31, 2018
Canadian Solar will reduce its target in expanding the module manufacturing capacity by 780 MW to 9.13 GW by December 31, 2018.
Canadian Solar owns solar module manufacturing factories with capacity of 400 MW in Canada and 360 MW in Brazil.
The company is running the Canadian factory at a low utilization rate since February of 2018 due to lower volume in the Canadian market and the Section 201 import duty in the U.S. The Brazilian plant is also running at a relatively low utilization rate as it completed its utility scale projects in the market.
As a result, Canadian Solar considers its effective solar module production capacity being 7,550 MW as of June 30, 2018, and expects it to be 8,370 MW on December 31, 2018.
Canadian Solar has revised its business targets and now expects solar module shipments to be in the range of 1.5 GW to 1.6 GW in the third quarter of 2018.
Canadian Solar expects revenue to be in the range of $790 million to $840 million with gross margin of between 20 percent and 23 percent for the third quarter of 2018.
Canadian Solar is expecting module shipment in the range of 6.0 GW to 6.2 GW against the earlier target of 6.6 GW to 7.1 GW. The company expects revenue of $4 billion to 4.2 billion compared to $4.4 billion to $4.6 billion.
“The revision of our annual guidance is in-line with the boarder industry and mainly reflects the expected reduction of shipment volumes to the Chinese market in the second half of the year, as well as the expected lower solar module average selling price,” Canadian Solar CEO Shawn Qu said.
Canadian Solar said its revenue fell 54.3 percent quarter on quarter and dipped 6 percent year on year to $650.6 million in the second quarter of 2018. Canadian Solar shipped 1,700 MW solar modules compared to 1,374 MW in the first quarter of 2018.
Total operating expenses in the second quarter of 2018 were $105.5 million, up 60.6 percent from $65.7 million in the first quarter of 2018 and up 25.5 percent from $84.1 million in the second quarter of 2017.