Solar Energy Financial Results ...03.10.2011

Ontario Canadian Solar today announced financial results for the fourth quarter and full year ended December 31, 2010, and its outlook for the first quarter and full year 2011.



4Q10 Highlights

Net revenues of $452.7 million for 4Q10 compared to net revenues of $377.2 million for 3Q10.
Shipments of 237 MW for 4Q10, compared to shipments of 200 MW for 3Q10.
Gross margin of 17.0% for 4Q10 compared to gross margin of 17.3% for 3Q10.
Net income of $0.58 per diluted share for 4Q10, compared to net income of $0.47 per diluted share for 3Q10.


Full Year Highlights

Net revenues of $1.5 billion for FY 2010 compared to net revenues of $631.0 million for FY 2009.
Shipments of 803 MW for FY 2010 compared to shipments of 310 MW for FY 2009.
Gross margin of 15.3% for FY 2010 compared to gross margin of 12.4% for FY 2009.
Net income of $1.16 per diluted share for FY 2010 compared to $0.60 per diluted share for FY 2009
Net revenues for the fourth quarter of 2010 were $452.7 million, compared to net revenues of $377.2 million for the third quarter of 2010 and net revenues of $254.2 million for the fourth quarter of 2009.

Net income for the fourth quarter of 2010 was $25.5 million, or $0.58 per diluted share, compared to net income of $20.3 million, or $0.47 per diluted share for the third quarter 2010, and a net loss of $15.6 million, or $0.38 per diluted share, for the fourth quarter of 2009.

Shipments for the fourth quarter of 2010 were 237 MW, including 10 MW relating to the delivery of systems kits, compared to shipments of 200 MW for the third quarter of 2010 and shipments of 141 MW for the fourth quarter of 2009. The Company's sales growth reflects the continued success of its market diversification efforts, with sales to non-European markets accounting for 29% of revenue in the fourth quarter of 2010, compared to 23% in the third quarter of 2010 and 8% in the fourth quarter of 2009.

Net revenues for the full year 2010 were $1.5 billion compared to net revenues of $631 million for the full year 2009, a 137% increase.

Net income for the full year 2010 was $50.6 million, or $1.16 per diluted share, compared to net income for full year 2009 of $22.6 million, or $0.60 per diluted share.

Shipments for the full year 2010 were 803 MW, compared to shipments of 310 MW for the full year 2009, representing a 159% increase. Shipments for the full year 2010 include 24 MW relating to the delivery of systems kits.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked: "2010 was a banner growth year for the Company. Our shipments grew faster than the global market for solar modules; we gained market share and more than doubled our net revenues. We also had higher margins than in 2009, primarily due to our increased sales volumes and lower processing costs at our wafer and cell plants. Concurrently, we continued our geographic diversification strategy and the development of our systems business, with considerable progress in North American and Japan. We also further expanded our R&D efforts, which allowed us to begin shipping new products, including our New Edge and higher efficiency modules late in the year. In 2011, we expect to see these products reach the market in much more meaningful volumes."

Andrew Chen, Chief Financial Officer of Canadian Solar, commented: "4Q10 gross margin of 17% was in line with prior guidance as our lower cost structure helped offset the impact of higher silicon raw materials costs as we continue our capacity expansion. We will continue to pursue cost structure improvement opportunities in 2011. We exited 2010 in a strong financial position with the balance sheet flexibility needed to support the next phase of our capacity expansion plan."

In the fourth quarter of 2010, Canadian Solar wrote off its investment of $3 million and a prepayment of $9.7 million to a start-up supplier. This action follows the continued deterioration of the supplier's financial position and its default on scheduled materials deliveries in the fourth quarter of 2010.

For 1Q11, shipments will be approximately level with 4Q10, despite seasonality caused by unfavorable weather conditions in both Europe and North America. Gross margin for 1Q11 expected to be between 14% to 15%, primarily due to declines in module ASP, higher costs in certain raw materials, and low production volume during the Chinese New Year holiday period.

For full year 2011, the comany expects shipments of approximately 1,200 MW to 1,300 MW.

The company is on-track to complete the expansion of our module capacity in China to 1.85 GW and our cell capacity to 1.3 GW by mid-2011. It is also on track to reach 200 MW of Made-in-Ontario module capacity by mid-2011. Trial production has started at our module plant in Guelph, Ontario.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked: "We expect that 2011 will be another growth year for the Company. We will, however, remain focused, on further lowering our processing costs, expanding our higher conversion efficiency cell capacity and increasing our vertical integration to improve our margins and cash flow. Our target is to be substantially vertically integrated at the cell and module production stages, with capacity to produce 50% of our own wafer requirements. In the second half of 2011, we expect that approximately 50% of our cell production will be higher conversion efficiency cells. We also expect to build on our momentum in non-European markets, especially North America and Japan, with Canadian Solar playing a larger role in downstream growth opportunities, such as turn-key solar systems in Ontario and systems kits in Japan. We believe that, while European markets will continue to dominate the solar business in 2011, non-European markets can, in some segments, support higher selling prices and higher rates of growth than traditional European markets."

Further details about Solar...http://solarpanelsenergysystems.com/.