Hanwha SolarOne Co Ltd (
Q2 2011 Earnings Call
August 24, 2011 8:00 am ET
Paul Combs – Vice President of Investor Relations.
Ki-Joon Hong – Chairman and Chief Executive Officer
Jung Pyo Seo – Chief Financial Officer
Sungsoo Lee – Chief Strategy Officer
Jesse Pichel – Jefferies & Co.
Daniel Ries – Collins Stewart LLC
Y. Edwin Mok – Needham & Company
Paul Klegg – Mizzuo
Kelly Dougherty – Macquarie Research
Josh Baribeau – Canaccord Genuity
Sam Dubinsky – Wells Fargo Securities LLC
Philip Shen – Roth Capital Partners
Pranab Sarmah – Daiwa Capital Markets
Colin Rusch – ThinkEquity LLC
Aaron Chew – Maxim Group LLC.
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Good day, ladies and gentlemen, and welcome to the Second Quarter 2011 Hanwha SolarOne Co Limited Earnings Conference Call. My name is Erika and I’ll be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions)
I would now like to turn the presentation over to your host for today’s call Mr. Paul Combs. Please proceed.
Thank you, Erika, and good morning everyone, and welcome to our call. Joining me today are my colleagues, our Chairman and CEO, Ki-Joon Hong, our CFO Jung Seo, and Sungsoo Lee, our Chief Strategy Officer.
As you know, we have recently made some significant changes at the Senior Management level. So we thought it would be useful to not only review our second quarter results but also give some of the new management team an opportunity to focus on their priorities in the future direction of the company.
Chairman Hong will open with some brief comments on our broad objectives and some overarching management goals. Jung will follow with some abbreviated highlights of the second quarter. We trust you have seen the results released earlier and will therefore not repeat each line item with quarter-to-quarter and annual comparisons. Instead Jung will get those items that differed from expectations or had a meaningful impact on our results.
Sungsoo will conclude with some priority, strategic initiatives, and some basic commentary on our expectations for the remainder of 2011. We trust this focused approach will allow you to meet our new management, hear their specific goals for the company first hand, and importantly allow adequate time to respond to any questions you may have.
Before we begin I’d like to remind you that you can download a PowerPoint file that will accompany this presentation from our website. If you are on our mailing list, you should have received this file in conjunction with our earnings release. I also need to remind you of our Safe Harbor policy, which is also included in the earnings release and posted in its entirety on Slide 2 of the slide package. For more information about the associated risk and uncertainties please review our filings with the SEC.
Now it is my pleasure to introduce Chairman Hong.
Thank you, Paul, and good morning everyone. I am sure most of you have seen the regimen change we initiated for months or (inaudible). So both from (inaudible) role of COO. We also appoint a new CFO, CTO, CCO, and (inaudible) going to COO. These are all highly qualified and experienced executives who either previously operated under our larger Solarfun umbrella or has been in relevant positions within the solar industry. This should enable the best integration with the parent company and maximize opportunities for synergies between the two organizations.
And I’m sure you are all aware we have been operating in a very challenging environment for Solar. This means our second quarter performance was weaker than expected and we are disappointed with the results. That being said we do see a clear pick up in demand starting in the third quarter.
Our key raw materials cost such as polysilicon are declining and we see good potential to turn the corner under reducing processing cost. Important point underneath, we have not reworked from our (inaudible) to our stated goal of becoming a top three solar player by 2015.
This could take training and discipline. I will add in (inaudible) Hanwha Chemical, which is a large and successful chemical company in Korea. I’m sure many of the major success (inaudible) that will translate here. As I look at this industry and this business, there are number of key priorities. First, we in the industry is covering cost of leadership. The industry is becoming increasing and more competent with larger and more sophisticated key players.
(Inaudible) prices are falling and margin have been squeezed. With our cost leadership you become uncompetitive or worse obsolete. So all this from we know we have some work to do and it is one of our primary areas of our focus. Our current cost structure relative to the work in large is strong. Relative to industry leaders here in China, we still trade about all-in by a clean margin.
However, we will get better. This involves expanding our skills, prudently managing our supply chain and (inaudible) innovating in terms of both process and technology. Our goal to become a top three global player by 2015 is anxious and the timeframe to get there isn’t sure. Therefore my second order is to manage this business with a speed and precision. We are now equipped to make decision quickly. We are incurring (inaudible) our international unit value, and we intend to promote comfortable EPS throughout the renovation when it comes to attrition.