Company Announcements

Canadian Solar Reports Third Quarter 2021 Results

GUELPH, ON, Nov. 18, 2021 /PRNewswire/ -- Canadian Solar Inc. ("Canadian Solar" or the "Company") (NASDAQ: CSIQ) today announced financial results for the quarter ended September 30, 2021.

Highlights

  • Solar module shipments of 3.9 GW in the third quarter of 2021, in line with guidance of 3.8 GW to 4.0 GW.
  • Revenue increased 34% year-over-year ("yoy") to $1.23 billion, in line with guidance of $1.2 billion to $1.4 billion.
  • Gross margin of 18.6%, above guidance range of 14% to 16%.
  • Net income attributable to Canadian Solar of $35 million, or $0.52 per diluted share.
  • 2.9 GWh of battery storage projects under construction and 21 GWh of total storage development pipeline.
  • Continuing to make progress on the carve-out IPO of the CSI Solar subsidiary.

Dr. Shawn Qu, Chairman and CEO, commented, "We delivered our strongest quarterly performance since the start of COVID, with 34% year-over-year topline growth and better-than-expected profitability. While operational challenges have intensified recently, emerging energy crises across the world underscore the urgency to accelerate the deployment of clean, renewable energy paired with reliable battery storage technology. We are also encouraged by the positive action from Glasgow'sCOP26 and supportive policies by an increasing number of governments. At Canadian Solar, we continue to invest in the research and development of competitive solar and battery storage system solutions, and in expanding our global sales channels. We will also grow and monetize our pipeline of sought-after solar and battery storage projects of 24 GWp and 21 GWh, respectively, while carefully managing short-term market fluctuations and building sustainable value for our shareholders."

"Regarding the previously announced carve-out IPO of CSI Solar, we are addressing the third round of comments from the Shanghai Stock Exchange, in line with usual review procedures."

Ismael Guerrero, Corporate VP and President of Canadian Solar's Global Energy subsidiary, said, "One of the key highlights for this quarter is the monetization of our first stand-alone battery storage project, the Crimson Project of 350 MW or 1,400 MWh in California. Construction on this landmark project has already started, underscoring the multi-year, value creation potential of battery storage projects across the world. From a market standpoint, certain project construction schedules are starting to be delayed due to rising costs, although we continue to sign higher-priced PPAs and expand our global solar and storage pipeline, positioning ourselves for long-term growth."

Yan Zhuang, President of Canadian Solar'sCSI Solar subsidiary, said, "The operational environment remains challenging driven by three key factors: a global logistics bottleneck, rising material costs across the board, and power curtailment in China adversely affecting production. We continue to take proactive measures to improve the situation, such as declining low priced orders and raising prices more aggressively to prioritize margins. We are also selectively slowing capacity expansion plans to optimize utilization rates. Meanwhile, we continue to make significant progress on our battery storage solutions, having delivered approximately 550 MWh on battery storage shipments during the first three quarters of this year. We are also investing in the R&D of next-generation solar and storage products, further deepening our sales channel partnerships, and expanding our brand through high quality, differentiated, clean energy solutions and services."

Dr. Huifeng Chang, Senior VP and CFO, added, "In the third quarter, we achieved $1.2 billion in revenue, in line with guidance, and a gross margin of 18.6%, which was well ahead of guidance. We used $29 million in operating cash during the quarter as inventory turnover slowed due to logistics challenges. We have scaled up manufacturing with approximately $420 million of capital expenditure year-to-date, and plan to reduce our full-year capital expenditure plan to approximately $500 million reflecting a prudent capital allocation strategy. We ended the quarter with $1.4 billion in cash and will remain disciplined in capital deployment."

Third Quarter 2021 Results

Total module shipments in the third quarter of 2021 were 3.87 GW, a 22% year-over-year ("yoy") increase and 6% quarter-over-quarter ("qoq") increase. Of the total, 173 MW was shipped to the Company's own utility-scale solar power projects.

Net revenues in the third quarter of 2021 were up 34% yoy and down 14% qoq to $1,229 million. The sequential decline primarily reflects the lower revenue from pre-construction project sales, or projects sold at notice to proceed ("NTP"). This was partially offset by a higher module average selling price ("ASP"). The yoy improvement was driven by an increase in module shipments and ASPs.

Gross profit in the third quarter of 2021 was $229 million, up 24% qoq and 28% yoy. Gross margin in the third quarter of 2021 was 18.6%, above guidance of 14% to 16% driven by higher margin contribution from project sales, higher module ASPs, manufacturing efficiency gains, and a benefit from U.S. anti-dumping ("AD") and countervailing duty ("CVD") true up. Gross margin was 17.6%, if excluding the AD/CVD true-up benefit of $12 million.

Total operating expenses in the third quarter of 2021 were $176 million compared to $158 million in the second quarter of 2021. The sequential increase was mainly driven by higher shipping and handling expenses, partially offset by an increase in other operating income.

Non-cash depreciation and amortization charges in the third quarter of 2021 were $71 million, compared to $66 million in the second quarter of 2021, and $56 million in the third quarter of 2020.

Net foreign exchange loss in the third quarter of 2021 was $14 million, compared to a net loss of $3 million in the second quarter of 2021 and a net loss of $13 million in the third quarter of 2020. The net foreign exchange loss was mainly driven by the strengthening of the U.S. Dollar against currencies such as the Brazilian Real.

Income tax benefit in the third quarter of 2021 was $3 million, compared to $2 million of income tax benefit in the second quarter of 2021 and $21 million of income tax expense in the third quarter of 2020. The benefit was a result of the utilization of net operating losses.

Net income attributable to Canadian Solar in the third quarter of 2021 was $35 million, or $0.52 per diluted share, compared to net income of $11 million, or $0.18 per diluted share in the second quarter of 2021. On a non-GAAP basis, net income attributable to Canadian Solar was $28 million, or $0.42 per diluted share. This excluded a $7 million AD/CVD true-up benefit, net of income tax effect and AD/CVD provision true-up attributable to non-controlling interests. For a reconciliation of results under generally accepted accounting principles in the United States ("GAAP") to non-GAAP results, see the accompanying table "About Non-GAAP Financial Measures".

The increase in basic shares outstanding was primarily due to the issuance of 1.1 million and 2.6 million shares in connection with the at-the-market equity offering program for the three months and nine months ended September 30, 2021, respectively. The increase in diluted shares outstanding was primarily due to the dilutive effect of convertible notes in the third quarter. For the three months and nine months ended September 30, 2021, the number of ordinary shares issuable upon the conversion of the convertible notes, which were dilutive and included in the computation of diluted earnings per shares, was 6.3 million shares.

Net cash used by operating activities in the third quarter of 2021 was $29 million, compared to $61 million in the second quarter of 2021. The operating cash outflow was mainly driven by an increase in project assets and net working capital. 

Total debt was $2.3 billion, as of September 30, 2021, compared to $2.2 billion, as of June 30, 2021. The increase in total debt was mainly driven by an increase in working capital facilities and project financing. Non-recourse debt used to finance solar power projects increased to $558 million as of September 30, 2021, from $454 million as of June 30, 2021.

Battery Storage Opportunities

Canadian Solar is strategically positioned in the battery storage market, both in solar plus battery storage, as well as in stand-alone storage opportunities. The rapid growth of the energy storage market is driven by technology improvements, declining battery storage costs, rising penetration of renewable energy and accelerating retirements of fossil fuel capacity.

Canadian Solar has a global network and strong brand recognition given its leadership in both module manufacturing and solar project development. Both CSI Solar and Global Energy have focused strategically on their respective energy storage businesses:

  • Under Global Energy, energy storage project development is fully integrated within the main solar development teams. Given the segment's large and growing pipeline, it is positioned to capture utility-scale energy storage projects.
  • Under CSI Solar, the battery storage solutions team focuses on delivering bankable, end-to-end, integrated battery storage solutions for utility scale, commercial and industrial, as well as residential applications. These systems solutions will be complemented with long-term service agreements, including future battery capacity augmentation services.

While there are synergies between the Global Energy and CSI Solar teams, both operate independently and in different segments of the battery storage value chain. The project pipeline for each team should be assessed independently. Please refer to the Global Energy and CSI Solar sections of this document for specific pipeline figures.

Global Energy Segment

Canadian Solar has one of the world's largest and most geographically diversified utility-scale solar and energy storage project development platforms, with a strong track record of originating, developing, financing, and building over 6.2 GWp of solar power plants across six continents. The Company has built a leadership position in solar project development with over 24 GWp total pipeline, as well as in energy storage project development with over 21 GWh of aggregate pipeline.

The continued pipeline expansion and strong project development track record will support Global Energy's growth in three key areas:

  1. Project sales: The Company plans to grow its volume of project sales by a compound annual growth rate of 25% over the next five years, well ahead of the global market growth rate of approximately 20% according to many research reports.
  2. Investment vehicles: The Company is optimizing its project monetization strategy by establishing local investment vehicles that will help maximize the value of its project assets. The Company also intends to retain minority ownership in these vehicles. By 2025, the Company plans to reach at least 1 GW of combined net ownership in solar power projects through these vehicles. This approach will help the Company build and grow a stable base of long-term cash flows from contracted electricity. The Company will be able to recycle a large portion of the capital into developing new solar projects for growth. Meanwhile, Canadian Solar expects to capture additional operational value throughout the partial ownership period, including long-term cash flows from power sales, operations and maintenance (O&M), asset management and other services (see point 3). The Company currently owns a 15% stake in the Canadian Solar Infrastructure Fund ("CSIF", TSE: 9284), the largest listed Japanese infrastructure fund on the Tokyo Stock Exchange. The Company also established the Brazilian Participation Fund for Infrastructure projects (FIP-IE), as well as similar project investment vehicles in European countries such as Italy. Through launching these localized vehicles, Canadian Solar is building up its expertise in designing investment vehicles in local markets that will help maximize the value of its project assets.
  3. Services: Canadian Solar currently manages over 2 GW of operational projects under long-term O&M agreements, and an additional 2 GW of contracted projects that will be operated and maintained by the Company once they are placed in operation. The Company's target is to reach 11 GW of projects under O&M agreements by 2025.

Management targets to achieve the following over the next 5 years:

Global Energy Targets

2021

2022

2023

2024

2025

Annual Project Sales, GWp

1.5-2.1

2.4-2.9

3.2-3.7

3.6-4.1

4.0-4.5

Operational O&M Projects, GWp

2.6

4.3

6.5

9.2

11.0

Net Cumulative Projects Retained, MWp

290

400

760

960

1,000

Gross Cumulative Projects Retained, MWp

740

1,300

2,650

3,150

3,400


* Net projects retained represents CSIQ's net partial ownership of solar projects, the gross number represents the aggregate size of projects including the share which is not owned by CSIQ.

Solar Project Pipeline

As of September 30, 2021, the Company's total project pipeline was 23.8 GWp, including 1.6 GWp under construction, 5.0 GWp of backlog, and 17.2 GWp of earlier stage pipeline. The backlog includes projects that have passed their Risk Cliff Date and are expected to be built in the next one to four years. A project's Risk Cliff Date depends on the country where the project is located and is defined as the date on which the project passes the last high-risk development stage. This is usually after the projects have received all the required environmental and regulatory approvals, and entered into interconnection agreements, feed-in tariff ("FIT") arrangements and power purchase agreements ("PPAs"). Over 90% of projects in backlog are contracted (i.e., have secured a PPA or FIT), and the remaining are reasonably assured of securing PPAs.

The Company's pipeline includes early- to mid-stage project opportunities currently under development but that are yet to be de-risked.

The following table presents the Company's total project pipeline.


Total Project Pipeline (as of September 30, 2021) – MWp

Region

In Construction

Backlog

Pipeline

Total

North America

115

744

5,732

6,591

Latin America

956*

3,141

3,726

7,823

Europe, the Middle East and Africa ("EMEA")

-

455*

4,105

4,560

Japan

144

204

72

420

Asia Pacific excluding Japan and China

346

192

1,560

2,098

China (part of CSI Solar)

-

300

2,010

2,310

Total

1,561

5,036

17,205

23,802

*Note: Gross MWp size of projects includes 492 MWp in construction in Latin America,

and 110 MWp in backlog in EMEA, that are not owned by Canadian Solar or have been sold to third parties.

 







The Company has 348 MWp of premium, high FIT projects in Japan. The table below sets forth the expected COD schedule of the Company's project backlog in development and construction in Japan, as of September 30, 2021:

Expected COD Schedule MWp 



2021


2022


2023 and
thereafter


Total


18


190


140


348

Battery Storage Project Pipeline

The Global Energy segment has been actively developing utility-scale solar plus energy storage projects, as well as stand-alone battery storage projects. The Company found that virtually all its solar power projects under development can co-host energy storage facilities and has done so since the first quarter of 2021. By co-hosting energy storage facilities with solar power plants on the same piece of land and using the same interconnection point, the Company expects to significantly enhance the value of its assets under development.

Canadian Solar has already signed several storage tolling agreements with a variety of power purchasers, including community choice aggregators, investor-owned utilities, universities, and public utility districts. The Company has also signed development services agreements to retrofit operational solar projects with battery storage, many of which were previously developed by the Company.

The table below sets forth Global Energy's storage project development backlog and pipeline.


Storage  Project Development Backlog and Pipeline   (as of September 30, 2021) – MWh

Region

In Construction

Backlog

Pipeline

Total

North America

2,901

-

10,485

13,386

Latin America

-

465

3,185

3,650

Europe, the Middle East and Africa ("EMEA")

-

-

1,987

1,987

Japan

-

-

19

19

Asia Pacific excluding Japan

-

-

1,915

1,915

Total

2,901

465

17,591

20,957








Solar Power Plants and Battery Storage Projects in Operation

As of September 30, 2021, the Company's solar power plants in operation totaled 432 MWp, with a combined estimated net resale value of approximately $360 million to Canadian Solar. The estimated resale value is based on selling prices that Canadian Solar is currently negotiating or transaction prices of similar assets in the relevant markets.

Solar Power Plants in Operation – MWp

Latin America

Japan

Asia Pacific

ex. Japan and China

China

Total

202

41

62

127

432


Note: Gross MWp size of projects, includes 81 MWp in Latin America and 26  MWp in Asia Pacific ex. Japan and China already sold to third parties. China portfolio is part of CSI Solar.

Operating Results

The following table presents unaudited select results of operations data of the Company's Global Energy segment.

Global Energy Segment Financial Results

( In Thousands of U.S. Dollars, Except Percentages)


Three Months Ended


Nine Months Ended



September
30,

2021

June

30,

2021

September
30,

2020*


September
30,

2021

September
30,

2020*


Net revenues

139,989

280,614

78,567


891,665

353,550


Cost of revenues

78,848

268,855

53,635


705,740

236,649


Gross profit

61,141

11,759

24,932


185,925

116,901


Operating expenses

30,442

15,632

19,490


74,018

65,267


Income (loss) from
operations

30,699

(3,873)

5,442


111,907

51,634


Gross margin

43.7%

4.2%

31.7%


20.9%

33.1%


Operating margin

21.9%

-1.4%

6.9%


12.6%

14.6%




*Historical amounts for the three months and nine months ended September 30, 2020, have been revised to conform
to the current period presentation


CSI Solar Segment

CSI Solar's 2021 and 2022 capacity expansion targets are detailed below.  

Manufacturing Capacity, GW (as of period end)



Q3 2021
Actual

FY21 Plan

FY22 Plan

Ingot

5.1

5.4

10.1

Wafer

9.5

11.5

11.5

Cell

13.3

13.9

13.9

Module

22.1

23.9

32.0

Note: CSI Solar's capacity expansion plans are subject to change without notice based on market conditions and capital allocation plans.

Operating Results  

The following table presents unaudited select results of operations data of the CSI Solar segment for the periods indicated.

CSI Solar Segment Financial Results *  

(In Thousands of U.S. Dollars, Except Percentages)


Three Months Ended


Nine Months Ended


September

30,

2021

June

30,

2021

September

30,

2020**


September

30,

2021

September
30,

2020**

Net revenues

1,149,215

1,183,958

921,529


3,028,325

2,320,456

Cost of revenues

976,212

1,028,470

738,353


2,632,376

1,817,743

Gross profit

173,003

155,488

183,176


395,949

502,713

Operating expenses

142,734

140,516

94,936


403,376

252,408

Income (loss) from operations

30,269

14,972

88,240


(7,427)

250,305

Gross margin

15.1%

13.1%

19.9%


13.1%

21.7%

Operating margin

2.6%

1.3%

9.6%


-0.2%

10.8%








* I ncludes effects of both sales to third-part y customers and to the Company's Global En ergy Segment .  Please refer
to the attached financial tables for intercompany transaction elimination information. Income (loss) from operations reflects
management's allocation and estimate as some services are shared by the Company's two business segments

** Historical amounts for the three months and nine months ended September 30, 2020 have been revised to conform to the
current period presentation.

The table below provides the geographic distribution of the net revenues of CSI Solar:

CSI Solar Net Revenues Geographic Distribution* (In Millions of U.S. Dollars, Except Percentages)


Q3 2021

% of Net
Revenues


Q2 2021

% of Net
Revenues


Q3 2020

% of Net
Revenues

Asia

481

44


527

46


442

53

Americas

393

36


421

37


251

30

Europe and others

215

20


201

17


143

17

Total

1,089

100


1,149

100


836

100


*Excludes sales from CSI Solar to Global Energy.

CSI Solar shipped 3.9 GW of modules to nearly 70 countries in the third quarter of 2021. The top five markets ranked by shipments were China, the U.S., Brazil, Germany and Thailand.

Battery Storage Solutions

Within CSI Solar, the battery storage solutions team delivers competitive turnkey, integrated battery storage solutions, including bankable and fully wrapped capacity and performance guarantees. These guarantees are complemented with long term O&M agreements, which include future battery capacity augmentation services and bring in longer term, stable income.

The table below sets forth CSI Solar's battery storage system integration's contracted projects and/or under construction, those in high probability forecast, and pipeline, as of September 30, 2021.


Contracted/

In Construction

Forecast

Pipeline

Total

Storage (MWh)

2,261

215

2,651

5,127

Contracted/in construction projects are expected to be delivered within the next 12 to 18 months. Forecast projects include those that have more than 75% probability of being contracted within the next 12 months, and the remaining pipeline includes projects that have been identified but have a below 75% probability of being contracted.

Business Outlook

The Company's business outlook is based on management's current views and estimates given factors such as existing market conditions, order book, production capacity, input material prices, foreign exchange fluctuations, anticipated timing of project sales, and the global economic environment. This outlook is subject to uncertainty with respect to, among other things, customer demand, project construction and sale schedules, product sales prices and costs, and the global impact of the ongoing COVID-19 pandemic. Management's views and estimates are subject to change without notice.

For the fourth quarter of 2021, the Company expects total module shipments to be in the range of 3.7 GW to 3.9 GW, including approximately 250 MW of module shipments to the Company's own projects. Total revenues are expected to be in the range of $1.5 billion to $1.6 billion. Gross margin is expected to be between 14% and 16%.

For the full year of 2021, battery storage shipments, accounted in CSI Solar, are expected to be in the range of 840 MWh to 860 MWh. Global Energy project sales are expected to be in the range of 1.5 GW to 2.1 GW, reflecting the timing of certain project sales which could be recognized either in the fourth quarter of 2021 or first quarter of 2022.

For the full year of 2022, the Company expects total module shipments to be in the range of 20 GW to 22 GW, battery storage shipments to be in the range of 1.4 GWh to 1.5 GWh, and total project sales to be in the range of 2.4 GW to 2.9 GW. Revenue for the full year of 2022 is expected to be in the range of $6.5 billion to $7.0 billion.

Dr. Shawn Qu, Chairman and CEO, commented, "We have walked away from low-priced orders as we control shipment volume to protect margins, as reflected in the updated shipment and revenue guidance in the fourth quarter. We believe the adverse macro conditions of higher material costs and global logistics bottlenecks are temporary. As we look forward to next year, our focus is on improving Canadian Solar's long-term position and competitiveness, and our strategy is to further expand our solar module market share, invest in technology and upstream capacity, while benefiting from overcapacity in the wafer and cell manufacturing levels. We are also positive about the growth of our battery storage business, which is on track to grow by 70% on its second year of deliveries, representing another record year. Overall, long-term market fundamentals remain positive with both company and market-specific catalysts in each of our business segments."

Recent Developments

On November 8, 2021, Canadian Solar announced it was awarded 52 MWp for the solar PV project Caracoli in the recent public auction by Colombia'sMinistry of Energy. The energy awarded will be acquired by a pool of reputable off-takers and will start delivering clean energy from 2023 through an inflation-indexed, Colombian Peso-denominated, 15-year power purchase agreement.

On September 9, 2021, Canadian Solar announced its majority-owned subsidiary, CSI Solar Co., Ltd. closed a 350 MW / 1400 MWh contract to provide fully-integrated battery storage system, EPC and long term maintenance service to the Crimson stand-alone battery storage project in Riverside County, California.

On September 8, 2021, Canadian Solar announced that its wholly owned subsidiary Recurrent Energy sold an 80% stake in its 350 MW / 1400 MWh Crimson storage project to Axium Infrastructure. Recurrent Energy will retain the remaining 20% ownership. Construction of the storage project began in Q3 2021 and is expected to reach commercial operation by the summer of 2022. 

On September 7, 2021, Canadian Solar announced that it signed long-term O&M agreements with two solar PV plus battery storage projects in the U.S., the Slate and Mustang projects that were both developed by Canadian Solar's wholly owned subsidiary Recurrent Energy and are currently owned by Goldman Sachs Asset Management Renewables Power (Goldman Sachs).

Conference Call Information
The Company will hold a conference call at 8:00 a.m.U.S. Eastern Standard Time on Thursday, November 18, 2021 (9:00 p.m., Thursday, November 18, 2021 in Hong Kong) to discuss its third quarter 2021 results and business outlook. The dial-in phone number for the live audio call is +1-833-239-5565 (toll-free from the U.S.), +852-3018-6771 (local dial-in from Hong Kong), 400-8205-286 (local dial-in from Mainland China) or +1-332-208-9468 / +65-6713-5590 from international locations. The passcode for the call is 6095653. A live webcast of the conference call will also be available on the investor relations section of Canadian Solar's website at www.canadiansolar.com

A replay of the call will be available 2 hours after the conclusion of the call until 8:00 a.m.U.S. Eastern Standard Time on Friday, November 26, 2021 (9:00 p.m., November 26, 2021 in Hong Kong) and can be accessed by dialing +1-855-452-5696 (toll-free from the U.S.), +852-3051-2780 (local dial-in from Hong Kong), 400-6322-162 (toll-free from Mainland China) or +1-646-254-3697 from international locations. The passcode for the replay is 6095653. A webcast replay will also be available on the investor relations section of Canadian Solar's at www.canadiansolar.com.

About Canadian Solar Inc.

Canadian Solar was founded in 2001 in Canada and is one of the world's largest solar technology and renewable energy companies. It is a leading manufacturer of solar photovoltaic modules, provider of solar energy and battery storage solutions, and developer of utility-scale solar power and battery storage projects with a geographically diversified pipeline in various stages of development. Over the past 20 years, Canadian Solar has successfully delivered over 63 GW of premium-quality, solar photovoltaic modules to customers across the world. Likewise, since entering the project development business in 2010, Canadian Solar has developed, built and connected over 6.2 GWp in over 20 countries across the world. Currently, the Company has around 430 MWp of projects in operation, nearly 7 GWp of projects under construction or in backlog (late-stage), and an additional 17 GWp of projects in pipeline (mid- to early- stage). Canadian Solar is one of the most bankable companies in the solar and renewable energy industry, having been publicly listed on the NASDAQ since 2006. For additional information about the Company, follow Canadian Solar on LinkedIn or visit www.canadiansolar.com.

Safe Harbor/Forward-Looking Statements

Certain statements in this press release, including those regarding the Company's expected future shipment volumes, revenues, gross margins and project sales, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially. These statements are made under the "Safe Harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by such terms as "believes," "expects," "anticipates," "intends," "estimates," the negative of these terms, or other comparable terminology. Factors that could cause actual results to differ include general business and economic conditions and the state of the solar industry; volatility, uncertainty, delays and disruptions related to the COVID-19 pandemic; governmental support for the deployment of solar power; future available supplies of high-purity silicon; demand for end-use products by consumers and inventory levels of such products in the supply chain; changes in demand from significant customers; changes in demand from major markets such as Japan, the U.S., China and Brazil; changes in customer order patterns; changes in product mix; capacity utilization; level of competition; pricing pressure and declines in average selling prices; delays in new product introduction; delays in utility-scale project approval process; delays in utility-scale project construction; delays in the completion of project sales; continued success in technological innovations and delivery of products with the features that customers demand; shortage in supply of materials or capacity requirements; availability of financing; exchange rate fluctuations; litigation and other risks as described in the Company's SEC filings, including its annual report on Form 20-F filed on April 19, 2021. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. Investors should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and Canadian Solar undertakes no duty to update such information, except as required under applicable law.

 

FINANCIAL TABLES FOLLOW

 

 

The following tables provide unaudited select financial data for the Company's CSI Solar and Global Energy businesses. Historical amounts for the three months and nine months ended September 30, 2020 have been revised to conform to current period presentation:




Select Financial Data – CSI Solar and Global Energy




Three Months Ended September 30, 2021
(In Thousands of U.S. Dollars, Except Percentages)




CSI Solar


Global
Energy


Elimination
and
unallocated
items (1)


Total

Net revenues 



1,149,215


139,989


(59,754)


1,229,450

Cost of revenues



976,212


78,848


(54,239)


1,000,821

Gross profit



173,003


61,141


(5,515)


228,629

Gross margin



15.1%


43.7%



18.6%

Income from operations



30,269


30,699


(7,875)


53,093
























Select Financial Data – CSI Solar and Global Energy




Nine Months Ended September 30, 2021
(In Thousands of U.S. Dollars, Except Percentages)




CSI Solar


Global
Energy


Elimination
and
unallocated
items (1)


Total

Net revenues 



3,028,325


891,665


(171,540)


3,748,450

Cost of revenues



2,632,376


705,740


(197,684)


3,140,432

Gross profit



395,949


185,925


26,144


608,018

Gross margin



13.1%


20.9%



16.2%

Income (loss) from
    operations



(7,427)


111,907


18,476


122,956
























Select Financial Data - CSI Solar and Global Energy




Three Months Ended September 30, 2020
(In Thousands of U.S. Dollars, Except Percentages)




CSI Solar


Global
Energy


Elimination
and
unallocated
items(1)


Total

Net revenues 



921,529


78,567


(85,736)


914,360

Cost of revenues



738,353


53,635


(56,045)


735,943

Gross profit



183,176


24,932


(29,691)


178,417

Gross margin



19.9%


31.7%



19.5%

Income from operations



88,240


5,442


(34,635)


59,047
























Select Financial Data - CSI Solar and Global Energy




Nine Months Ended September 30, 2020
(In Thousands of U.S. Dollars, Except Percentages)




CSI Solar


Global
Energy


Elimination
and
unallocated
items(1)


Total

Net revenues 



2,320,456


353,550


(238,165)


2,435,841

Cost of revenues



1,817,743


236,649


(167,377)


1,887,015

Gross profit



502,713


116,901


(70,788)


548,826

Gross margin



21.7%


33.1%



22.5%

Income from operations



250,305


51,634


(83,988)


217,951


(1) Includes inter-segment elimination, and unallocated corporate costs not considered part of management's evaluation of reportable segment operating performance.

 

 

 


Select Financial Data - CSI Solar and Global Energy


Three Months
Ended

September 30,
2021


Three Months
Ended

June 30, 2021


Three Months
Ended

March 31, 2021


Three Months
Ended

September 30, 2
020




(In Thousands of U.S. Dollars)

CSI Solar  Revenues:








Solar modules

872,288


843,463


552,247


628,114

Solar system kits

98,920


88,057


36,071


46,487

Battery storage solutions

62,977


68,890


2,358


2,946

China energy (incl. electricity sales)

22,337


94,347


7,095


140,250

Others

32,939


54,290


20,506


17,996

Subtotal

1,089,461


1,149,047


618,277


835,793

Global Energy Revenues:








Solar and battery storage power projects

126,224


266,598


452,847


69,718

O&M and asset management services

8,031


8,607


9,966


6,536

Others

5,734


5,409


8,249


2,313

Subtotal

139,989


280,614


471,062


78,567

Total net revenues

1,229,450


1,429,661


1,089,339


914,360

 

 


Select Financial Data - CSI Solar and Global Energy


Nine Months Ended

September 30, 2021


Nine Months Ended

September 30, 2020




(In Thousands of U.S. Dollars)

CSI Solar  Revenues:




Solar modules

2,267,998


1,761,904

Solar system kits

223,048


118,585

Battery storage solutions

134,225


2,946

China energy (incl. electricity sales)

123,779


160,194

Others

107,735


38,662

Subtotal

2,856,785


2,082,291

Global Energy Revenues:




Solar and battery storage power projects

845,669


300,156

O&M and asset management services

26,604


18,021

Others

19,392


35,373

Subtotal

891,665


353,550

Total net revenues

3,748,450


2,435,841

 

 

 


Canadian Solar Inc.


Unaudited Condensed Consolidated Statements of Operations


(In Thousands of U.S. Dollars, Except Share and Per Share Data)





Three Months Ended


Nine Months Ended



September 30 ,


June 30 ,


September 30 ,


September
30,


September
30,



2021


2021


2020


2021


2020












Net revenues

$ 1,229,450


$ 1,429,661


$ 914,360


$ 3,748,450


$ 2,435,841

Cost of revenues

1,000,821


1,244,874


735,943


3,140,432


1,887,015













Gross profit

228,629


184,787


178,417


608,018


548,826












Operating expenses:











Selling and distribution
expenses

101,526


83,581


53,998


269,187


160,120


General and
administrative expenses

83,244


68,578


56,183


219,279


155,498


Research and
development expenses

13,493


13,158


14,147


39,101


35,127


Other operating income

(22,727)


(6,910)


(4,958)


(42,505)


(19,870)

Total operating expenses

175,536


158,407


119,370


485,062


330,875












Income from operations

53,093


26,380


59,047


122,956


217,951

Other income (expenses):











Interest expense

(13,153)


(14,795)


(17,917)


(42,621)


(53,890)


Interest income

2,253


2,837


2,031


8,338


6,891


Gain (loss) on change in
fair value of derivatives,
net

9,878


(12,150)


13,143


10,300


43,903


Foreign exchange gain
(loss), net

(23,533)


8,884


(26,517)


(34,297)


(62,828)


Investment income (loss)

2,890


5,154


(6,393)


9,307


(18,880)

Other expenses, net

(21,665)


(10,070)


(35,653)


(48,973)


(84,804)












Income before income taxes
and equity in earnings of
unconsolidated investees

31,428


16,310


23,394


73,983


133,147

Income tax benefit (expense)

2,879


1,645


(20,632)


(9,328)


(480)

Equity in earnings of
unconsolidated investees

3,821


585


6,105


5,609


7,860

Net income

38,128


18,540


8,867


70,264


140,527












Less: Net income
attributable to non-
controlling interests

2,884


7,279


34


980


459












Net income attributable to
Canadian Solar Inc.

$ 35,244


$ 11,261


$ 8,833


$ 69,284


$ 140,068












Earnings per share - basic

$   0.56


$   0.19


$   0.15


$   1.14


$   2.35

Shares used in computation -
basic

62,794,480


60,288,824


59,749,307


60,989,038


59,500,078

Earnings per share - diluted

$   0.52


$   0.18


$   0.15


$   1.07


$   2.41

Shares used in computation -
diluted

69,857,925


61,339,043


60,829,073


68,333,493


60,705,300

 

 


Canadian Solar Inc.


Unaudited Condensed Consolidated Statement of Comprehensive Income


(In Thousands of U.S. Dollars)




Three Months Ended


Nine Months Ended


September 30,


June 30 ,


September 30,


September
30,


September
30,


2021


2021


2020


2021


2020

Net Income

$ 38,128


$ 18,540


$ 8,867


$ 70,264


$ 140,527

Other comprehensive income
(net of tax of nil):










Foreign currency translation
adjustment

(26,236)


9,629


32,173


(48,309)


17,199

De-recognition of commodity
hedge and interest rate swap



6,285



10,724

Gain (loss) on changes in fair
value of derivatives



256



(3,859)

Comprehensive income

11,892


28,169


47,581


21,955


164,591

Less: comprehensive income
(loss) attributable to non-
controlling interests

(1,053)


8,760


51


(7,985)


2,412

Comprehensive income
attributable to Canadian Solar
Inc.

$ 12,945


$ 19,409


$ 47,530


$ 29,940


$ 162,179












 

 


 

Canadian Solar Inc.


Unaudited Condensed Consolidated Balance Sheets


(In Thousands of U.S.  Dollars)






September 30,


December 31,




2021


2020


ASSETS





Current assets:






Cash and cash equivalents

$ 867,939


$ 1,178,752



Restricted cash

487,416


458,334



Accounts receivable trade, net

742,060


408,958



Accounts receivable, unbilled

34,787


28,461



Amounts due from related parties

18,565


5,834



Inventories

1,213,243


695,981



Value added tax recoverable

117,981


102,460



Advances to suppliers

308,483


182,146



Derivative assets

7,464


23,351



Project assets

661,441


747,764



Prepaid expenses and other current assets

497,243


353,781


Total current assets

4,956,622


4,185,822


Restricted cash

2,162


2,629


Property, plant and equipment, net

1,367,274


1,157,731


Solar power systems, net

108,767


158,262


Deferred tax assets, net

183,235


170,656


Advances to suppliers

55,070


97,173


Prepaid land use right

70,258


62,414


Investments in affiliates

82,961


78,291


Intangible assets, net

19,167


22,429


Project assets

423,195


389,702


Right-of-use assets

32,130


26,793


Other non-current assets

180,988


184,952


TOTAL ASSETS

$  7,481,829


$  6,536,854










 


 

 

Canadian Solar Inc.


Unaudited Condensed Consolidated Balance Sheets (Continued)


(In Thousands of U.S.  Dollars)





September 30,


December 31,



2021


2020


Current liabilities:






Short-term borrowings

$ 1,083,097


$ 1,202,285



Long-term borrowings on project assets -
current

297,355


198,794



Accounts payable

791,737


514,742



Notes payable

824,840


710,636



Amounts due to related parties

461


314



Other payables

704,453


508,839



Advance from customers

305,802


189,470



Derivative liabilities

714


10,755



Operating lease liabilities

18,562


15,204



Other current liabilities

150,718


237,316


Total current liabilities

4,177,739


3,588,355


Accrued warranty costs

48,984


37,732


Long-term borrowings

579,498


446,090


Convertible notes

224,292


223,214


Liability for uncertain tax positions

13,466


14,729


Deferred tax liabilities

47,230


49,080


Loss contingency accruals

35,763


26,458


Operating lease liabilities

19,459


13,232


Financing liabilities

82,370


81,871


Other non-current liabilities

219,306


163,308


TOTAL LIABILITIES

5,448,107


4,644,069


Equity:






Common shares

792,725


687,033



Additional paid-in capital

(21,030)


(28,236)



Retained earnings

1,009,588


940,304



Accumulated other comprehensive loss

(68,023)


(28,679)


Total Canadian Solar Inc. shareholders'
equity

1,713,260


1,570,422


Non-controlling interests in subsidiaries

320,462


322,363


TOTAL EQUITY

2,033,722


1,892,785


TOTAL LIABILITIES AND EQUITY

$ 7,481,829


$ 6,536,854


 

 

About Non-GAAP Financial Measures

To supplement its financial disclosures presented in accordance with GAAP, the Company uses non-GAAP measures which are adjusted from the most comparable GAAP measures for certain items as described below. The Company presents non-GAAP net income and diluted earnings per share so that readers can better understand the underlying operating performance of the business before the impact of AD/CVD true-up provisions. The non-GAAP numbers are not measures of financial performance under U.S. GAAP, and should not be considered in isolation or as an alternative to other measures determined in accordance with GAAP. These non-GAAP measures may differ from non-GAAP measures used by other companies, and therefore their comparability may be limited.

Statement of Operations Data:
(In Thousands of U.S. Dollars, Except Share and Per Share Data)



Three Months Ended


Nine Months Ended



September
 30,
2021


September 
30,
2020


September 
30,
2021


September 
30,
2020










GAAP net income attributable to
Canadian Solar Inc.

35,244


8,833


69,284


140,068

Non-GAAP income adjustment
items:









AD/CVD provision true-up

(11,871)


296


(11,871)


(20,101)


Tax impact

3,069


(73)


3,069


4,981


AD/CVD provision true-up
attributable to non-controlling
interests

1,796


-


1,796


-

Non-GAAP net income attributable to
Canadian Solar Inc.

28,238


9,056


62,278


124,948










GAAP income per share - diluted

$ 0.52


$ 0.15


$ 1.07


$ 2.31

Non-GAAP income per share -
diluted

$ 0.42


$ 0.15


$ 0.97


$ 2.06

Shares used in computation - diluted

69,857,925


60,829,073


68,333,493


60,705,300

 

 

Cision View original content:https://www.prnewswire.com/news-releases/canadian-solar-reports-third-quarter-2021-results-301427847.html

SOURCE Canadian Solar Inc.