Canadian Solar, a solar module manufacturer, has experienced significant growth in the first quarter of 2023. The company reported shipping 6.1GW of solar modules during this period, marking a 66% increase compared to the same period last year.
The top markets for Canadian Solar's manufacturing division, CSI Solar, were China, Brazil, the US, Spain, and Germany. Out of the total shipments in Q1 2023, 90MW were delivered to the company's utility-scale solar projects. Canadian Solar recently consolidated its global solar development and services business under its Recurrent Energy arm, expanding its operations beyond North America.
The company's current annual capacity for ingots, wafers, cells, and modules stands at 20.4GW, 21GW, 21GW, and 36.2GW, respectively. Canadian Solar aims to more than double each section by March 2024, targeting annual capacities of 50.4GW, 50GW, 60GW, and 75GW for ingots, wafers, cells, and modules, respectively.
Chairman and CEO of Canadian Solar, Shawn Qu, expressed excitement about the upcoming initial public offering (IPO) of their CSI Solar subsidiary, which will provide a new platform for raising investment capital and strengthening their position in solar and battery storage manufacturing. The IPO is expected to be completed in Q2 2023.
In terms of financial performance, net revenues in Q1 2023 increased from US$1.2 billion in Q1 2022 to US$1.7 billion, reflecting a 36% year-over-year growth. This increase was primarily driven by a significant rise in solar module shipments. However, it was partially offset by lower module average selling prices (ASP) and reduced revenues from utility-scale battery storage solutions and project sales. Gross profits also saw a substantial 76% year-over-year growth in Q1 2023, amounting to US$318 million.
Qu anticipates significant revenue and profit growth in the second quarter, driven by higher volumes in solar module shipments and project sales. In the CSI Solar segment, volume growth is increasing while costs continue to decline, although partially offset by gradual ASP decreases. Qu also expects a major project sale in the Recurrent Energy segment to have a significantly positive impact on profit during the quarter.
Regarding solar project development, Canadian Solar's Recurrent Energy division possesses a global solar project pipeline totaling 24.6GW. This pipeline comprises 1.7GW under construction, 5.2GW in backlog, and 17.7GW in advanced and early stages. Latin America accounts for the majority of projects under construction, with 1.4GW, followed by China with 250MW. Europe, the Middle East, and Africa (EMEA) represent the region with the largest pipeline, consisting of nearly 7.8GW of projects in different phases. North America follows with 7GW, and Latin America with 5GW.
Recently, Recurrent Energy signed a virtual power purchase agreement for its 100MW solar plant in Liberty County, Texas, with multiple offtakers.
Canadian Solar's battery storage pipeline stands at 47.4GWh, with 0.3GWh currently under construction. More than half of the total pipeline is located in North America (19.1GWh) and EMEA (14.2GWh).
Qu highlighted the company's strong start to the year, with a 36% year-over-year revenue growth and a remarkable 750% increase in diluted earnings per share. Canadian Solar continues to leverage its premium brand to capitalize on growing solar and battery storage opportunities. The company is focused on profitable growth, optimizing its cost structure through vertical integration. Qu emphasized that the imminent IPO of the CSI Solar subsidiary will provide a new platform for raising investment capital and strengthening their leading position in solar and battery storage manufacturing.
Looking ahead, Canadian Solar expects revenue in Q2 2023 to range between US$2.4 billion and US$2.6 billion. Furthermore, CSI Solar's shipments are projected to be in the range of 8.1GW to 8.4GW, surpassing the 5GW of solar modules shipped in Q2 2022. The company has reconfirmed its previous outlook for CSI Solar's total module shipments to range between 30GW and 35GW in 2023. Additionally, storage shipments are expected to reach between 1.8GWh and 2GWh.
The full-year revenue guidance for 2023 has been increased in the lower range, from US$8.5 billion to US$9 billion to US$9.5 billion.
