Canadian Solar announced financial results for the first quarter ended March 31, 2022.
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Net revenues in the first quarter of 2022 were $1.25 billion, up 15% yoy and down 18% quarter-over-quarter ("qoq").
The yoy increase was mainly driven by higher solar shipment volumes and ASP, and significant growth in the Company's battery storage solutions business, partially offset by lower project sales. The sequential decrease was mainly driven by lower project sales.
Gross profit in the first quarter of 2022 was $181 million, down 7% yoy and 40% qoq. Gross margin in the first quarter of 2022 was 14.5%, within prior guidance, and compared to 19.7% in the fourth quarter of 2021.
The sequential gross margin decline was mainly driven by higher raw material costs and the absence of U.S. anti-dumping and countervailing duty true up benefit in the current quarter relative to the prior quarter, which was partially offset by higher modules pricing and higher margin project sales.
Total operating expenses in the first quarter of 2022 were $165 million compared to $234 million in the fourth quarter of 2021 and $151 million in the first quarter of 2021.
The sequential decrease was mainly driven by lower shipping and handling expenses and an increase in other operating income.
Non-cash depreciation and amortization charges in the first quarter of 2022 were $66 million, compared to $76 million in the fourth quarter of 2021 and $62 million in the first quarter of 2021.
Net foreign exchange gain in the first quarter of 2022 was $3 million, compared to a net gain of $1 million in the fourth quarter of 2021 and a net loss of $7 million in the first quarter of 2021.
Income tax benefit in the first quarter of 2022 was $5 million, compared to a $27 million income tax expense in the fourth quarter of 2021 and a $14 million income tax expense in the first quarter of
021.
The benefit was a result of a lower income before income tax and a Canadian tax refund.
Net income attributable to Canadian Solar in the first quarter of 2022 was $9 million, or $0.14 per diluted share, compared to net income of $26 million, or $0.39 per diluted share, in the fourth quarter of 2021, and net income of $23 million, or $0.36 per diluted share, in the first quarter of 2021.
For the three months ended March 31, 2022, earnings per share – diluted ("Diluted EPS") of $0.14 was calculated from total earnings of $9 million divided by 64.7 million diluted shares.
For the three months ended December 31, 2021, Diluted EPS of $0.39 was calculated from total earnings of $27 million, including 2.5% coupon of $1.3 million, divided by 70.5 million diluted shares, including 6.3 million shares issuable upon the conversion of the convertible notes.
For the three months ended March 31, 2021, Diluted EPS of $0.36 was calculated from total earnings of $23 million, including 2.5% coupon of $1.3 million, divided by 67.5 million diluted shares, including 6.3 million shares issuable upon the conversion of the convertible notes.
Net cash provided by operating activities in the first quarter of 2022 was $159 million, compared to net cash used in operating activities of $235 million in the fourth quarter of 2021.
The operating cash inflow was mainly driven by changes in working capital, specifically, an increase in accounts payable and short-term notes payable, partially offset by an increase in inventories.
Total debt was $2.7 billion as of March 31, 2022, compared to $2.5 billion as of December 31, 2021. The increase was mainly driven by an increase in project financing and working capital facilities. Non-recourse debt used to finance solar power projects increased to $550 million as of March 31, 2022, from $515 million as of December 31, 2021. ■