Q3 Earnings: Trina Solar Passes 1 GW Quarterly Shipments, Cuts 130 MW Inner Mongolia Project
Trina Solar announced its third quarter earnings on Monday, with increased revenue but also a drop in guidance for fourth quarter shipments due to the cancellation of a 130 MW solar project in Inner Mongolia.
The company’s revenue increased 18.8% this quarter, rising from $519,425 to $616,844 over the quarter on shipments of 1,063.8 MW, compared to 943.3 MW in the second quarter of 2014. This is the first time Trina Solar has shipped more than 1 GW of solar panels in a quarter, a feat few companies have achieved.
“Both our module and downstream project businesses delivered good results in the third quarter of 2014, demonstrating our commitment to consistent revenue and profit growth for our core businesses,” said Mr. Jifan Gao, Chairman and Chief Executive Officer of Trina Solar.
Quarterly Revenue and Module Shipment
However, in guidance for the following quarter and the full 2014 year, Trina Solar announced that it was revising down shipment expectations, due in part to the cancellation of a 130 MW solar project that had been set to be built in Inner Mongolia. The company expects to ship between 1,045 and 1,095 MW of PV modules in the fourth quarter. For the full year 2014, PV module shipments are down to between 3.61 and 3.66 GW, from initially estimated 3.6 to 3.8 GW.
The company’s own downstream projects are also down on original guidance, dropping from 400 and 500 MW down to 330 and 360 MW. As the company writes in its press release, this “change is mainly due to the cancellation of a 130 MW solar farm project in Inner Mongolia after the Company conducted a thorough analysis on the project’s return.”
Such downstream business has been more and more a part of the equation for the top 20 solar manufacturers of late, especially for Chinese-based companies managing to leverage the massive demand for solar at home. A new report from NPD Solarbuzz earlier this month highlighted the increased focus on shipping to subsidiary businesses.
“Having a strong presence in downstream project development also allows companies to benefit from favorable solar PV incentives available in domestic and international markets,” said Ray Lian, senior analyst at NPD Solarbuzz. “Similar to dedicated project developers, this allows the option to hold projects, spin-off the assets into a yield company, or simply sell the projects upon completion to institutional investors.”
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Mongolia: independent country. Inner Mongolia: adjacent province of China. The two share the Gobi Desert.
The cancelled project suggests that China’s grid connection problems in remote inland regions are not over. These have contrituted to the policy pivot towards distributed solar projects in the less sunny but densely populated heartland.
Lots of wind and sun in Inner Mongolia are there large transmission plans in the work there? But yes distributed is the way to go when possible.
The revenue is: Net revenues were $616.8 million, an increase of 18.8% from the second quarter of 2014 – Not $616,844