Hanwha Solarone Co., Ltd. (
Q3 2011 Earnings Call
November 22, 2011 8:00 am ET
Paul Combs – Vice President Investor Relations
Ki-Joon Hong – Chairman of the Board & Chief Executive Officer
Jung Pyo Seo – Chief Financial Officer
Sungsoo Lee – Chief Strategy Officer & Board Secretary
Tai Seng Png – Chief Operating Officer
Koo Yung Lee – Chief Commercial Officer
Analyst for Jesse Pichel – Jefferies & Co.
Paul Clegg – Mizuho Securities USA
Adam Wiseman – Luminous Capital
Kelly Dougherty – Macquarie Research Equities
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Welcome to the Hanwha Solarone third quarter 2011 earnings conference call. At this time all participants are in a listen only mode. There will be a presentation followed by a question and answer session. (Operator Instructions) I must advise you that this conference is being recorded today, November 22, 2011. I would now like to hand the conference over to our speaker, Mr. Paul Combs, Vice President of Investor Relations for Hanwha Solarone.
Joining me today with formal comments are my colleagues, our Chairman and CEO Ki-Joon Hong, our CFO Jay Seo and Sungsoo Lee, our Chief Strategy Officer. We know there are a number of other reports this morning, that you have a lot on your plate so we will try and keep our comments tightly focused. Chairman Hong will open with some brief comments about our thoughts on the industry and the business. Jay will follow with some abbreviated highlights of the third quarter.
We trust you have seen the results released earlier so we will therefore try not to repeat each line item. Sungsoo will conclude with the review of several key initiatives we believe are essential to our future success and conclude with some comments about our expectations for the remainder of 2011. We’ll then obviously be happy to answer 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. I would also like to remind you of our Safe Harbor policy which is also included in the earnings release and posted in its entirety on Slide Two of the slide package. I need to state that our comments today will contain forward-looking statements that are subject to risks and uncertainties. Please review our filings with the SEC for a complete rundown of these risks.
Now it is my pleasure to turn the call over to our Chairman Ki-Joon Hong.
When Hanwha made the decision to enter the solar business and make it one of our major areas of future growth we understood the trends of it and the need for [inaudible] and long term strategic growth to building this business. [Inaudible] we thought the year 2011 and 2012 would be trying years for the industrial and the pace of change has been somewhat of a surprise. The results of these [inaudible] change has resulted in negative impact on Hanwha Solarone.
The negative cost of these pressures effected revenue growth and the profitability as you saw from our third quarter results. We are prepared to [inaudible] trends through the first quarter of 2012. In response to these we have made several relative decisions to managing costs. First, we have reduced manufacturing operations to largely [inaudible]. Second, we are allowing for workforce reduction through natural attrition and we have deferred any new cost spending decisions until the market recovers.
All of our executives are working hard to monitor cost and spend only where necessary. We however, are still focused on building this company for long term success. This still involves investment in branding, technical innovation, development systems and [inaudible]. We believe good [inaudible] ensure in bad markets and this is a window of opportunity for us to position ourselves for better times ahead.
There may be a silver lining to this top breaking environment we live in today. I believe the environment creates [inaudible] and competitive infrastructure at an accelerated pace and work particularly [inaudible] the pricing pressure and [inaudible] today. Low price will [inaudible] demand over time as the economics for photovoltaic [inaudible] in comparison to alternative forms of electricity generation.
The other benefits is a substantial reduction in input costs from silicon to components used to make [inaudible]. This will clearly enable us to run in some savings going forward and make our cost structure much lower than were predicted. While this [inaudible] unfolds we believe there are four critical elements to ensure our long term success. They are competitive cost structure, product innovation leading to differentiation, our strong balance sheet and continuing to capture and continuing to leverage these synergies within Hanwha. Both Jay and Sungsoo will touch on some of these points in their comments.
Before turning the call over to Jay, I’d like to close by assuring our shareholders that we to are not happy with the company’s near term financial performance and [inaudible]. You should know and trust that we are working to the best of our ability to build a profitable and sustainable company. We have invested heavily in a number of areas including branding and technology and will put systems in place in order to grow the business long term and work closely with our [inaudible] shareholder to explore synergies and build revenue wherever we can.
We thank you for your continued interest in Hanwha Solarone and your support as we navigate our way through this industry downturn and work hard to build a company with a bright future. Now, Jay See our CFO will walk you through some financial highlights.