Artes solar photovoltaic power plant business from the next two and a half years

CEO of Artes Solar (NASDAQ: CSIQ) is expected, two years after half of its revenue will come from photovoltaic power inverter  plant project business, marking its business model will be a significant change.

Artes solar Dr. Qu Xiaohua, chairman and chief executive officer of this view in the discussion meeting on the financial results for the third quarter of 2012.

Dr. Qu Xiaohua pointed out that the company is this year's overall solutions business unit development is impressed, the department is responsible for the development of photovoltaic projects, the success of the department soon will account for 13% of the revenue, but is expected in the next 12 to 24 months will be half of the revenue.

Serious downturn and sharp decline in profits due to the price, the more the company is following the main PV manufacturers such as First Solar and SunPower trends, increasingly rely on project business, rather than simply selling components to generate income, to obtain higher profits.

The Artes Solar, gross margin in the third quarter of 2012 to 2.2% and 12.4% in the previous quarter have fallen sharply, and fourth quarter gross margin is expected to be 1.0 to 3.0 percent.

Artes solar CFO Michael. Overall solutions business is expected in the next eighteen months will be eight hundred million U.S. dollars the Potter (MichaelPotter), said in a conference call. Artes solar 21.1MW project operations have been completed in the third quarter of 2013. The company reported a the 8.7MW project components in the second quarter of 2012 enabled.

Dr. Qu Xiaohua stressed in a conference call this quarter StonepeakInfrastructurePartners acquired Artes solar building in Canada, a value of about 48 million Canadian dollars ($ 48.4 million) of public facilities-scale solar power stations. However, shortly after the end of the quarter, the company's two projects completed the construction: Brockville1 and WilliamRutley, joint installed capacity of 20MW (AC), subsequently sold to TransCanadaCorporation.

Financial results

Artes solar report, the third quarter of 2012, net income was $ 326 million, down 6.4% from the previous quarter $ 348.2 million, down 34.8% compared to the same period last year.

The company reported third quarter total solar panel module shipments of 384MW, 412MW a decline compared to the second quarter, a slight increase compared to the same period last year 355MW.

Third quarter gross profit of $ 7.3 million in the previous quarter of $ 43.2 million, $ 11.9 million for the same period last year.

However, third quarter operating margin was a negative 10.6% to negative 0.9% in the last quarter, compared to a negative 6.1%.

The net loss of $ 43.7 million, $ 25.5 million in the second quarter.

Management on a conference call, Germany, sales in the third quarter of strong European market accounted for 47.9% of net revenue, North America, lower-than-expected 24.9% in Asia and other markets accounted for 27.2% of the net profit for the third quarter of 2012.

Financial expectations

The Artes Solar expected shipments in the fourth quarter of 2012, unchanged from the third quarter, data or a slight increase, ranging from 380MW to 420MW.

Therefore, the company revised downward the goal of the year, down to 1.5GW to 1.6GW, before the target from 1.8GW to 2.0GW.

The pressure to reduce costs will be a lot of balance of system (BOS) manufacturers to the "edge", and ultimately resulting in the market is not so crowded. GTM Research report shows that the view of the goals of the of PV modules BOS technology is a new round of cost-cutting, the solar market will become increasingly difficult for many participants. In 2008, the PV modules accounted for 67% of the average cost of a solar energy project. But the report shows that, due to the improvement of the cell and module technology, BOS cost problem, accounting for 68% of the cost of a project. The report warned that the above has led to global BOS manufacturers being compressed. The report, co-author and GTM Research senior analyst MJ Shiao said: "The global BOS manufacturers are faced with the challenge of providing products at low prices,grid tie inverter in addition to providing value-added benefits such as professional engineering services, but also to provide a highly integrated components and long-term improve product warranty. consulting firm Solvida Energy Group, Stephen Smith (Stephen Smith) for the first author of the report, he added: "As technology advances, the industry decision making based on the history of system performance, This will allow to maximize the system performance and ensure long-term operational cost pressures also many existing BOS participants to the brink, final industrial pattern will become less crowded, more realistic and based on actual data rather than marketing hype. "Smith , said the report "optimistic" BOS industry's prospects, believe that honored the commitment to cut costs. The report said that this process will not be easy, and requires manufacturers to balance innovation with customers and guarantee the lowest cost.