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» China Sunergy's CEO Discusses Q1 2011 Results - Earnings Call Transcript
To start, Stephen will present an overview of our first quarter results and important developments that have taken place this year. Then our CFO, Mr. Yongfei Chen will explain our financial results in more detail. Following that, Dr. Zhao will give a technology update. Stephen will close with guidance predictions; afterwards, they will all be available to take questions.Before I turn the call over to Stephen, may I remind our listeners that management prepared remarks include forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, and as such, our results may be materially different from the views expressed here today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. China Synergy does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference is being recorded. Now, I’d like to turn the call over to CEO, Mr. Stephen Cai. Stephen? Stephen Zhifang Cai Thank you, Elaine, thank you all for joining. It’s been just over two months since I reported our [fourth] quarter 2011 and full year results. And today, we are pleased to report that our performance and the market conditions have shown improvements. Please see slide five. You may remember that we set lower shipment guidance of 70 megawatts to 200 megawatts for Q1 as we were focused on restructuring our client base reorganizing our global sales team and shifting into new markets. Our actual shipments for Q1 were 79.9 megawatts and our gross margins came in at 1.1%, slightly above 1% guidance. Strong markets in Q1, included Italy with 22% of the sales, Australia which made up 18%, Bulgaria at 14% and Germany with 12%. Sales in China made up 8% of the revenue this quarter and this figure is expected to grow.
Our expanded sales teams in Asia and in Europe have been working hard to lead us into a recovery. And we see that QSAR module sales are growing stronger, we sold 2 megawatts in the first quarter and we’ve shipped another 4.4 megawatts in early May.Our revenue at $68.5 million were down 38.2% from first quarter 2011, but considering the drop in ASPs and the lower shipments over the last quarter, this decrease is not surprising. Net losses narrowed quite a bit too $1.6 million for the quarter, our ASP was $0.86, $0.02 higher than predicted. CSUN is neither at top nor at bottom of the pricing spectrum, we are just above the middle. As our brand recognition improves, and as we transaction to sell more QSAR modules. We hope to sell at premium to more of our pears. Now, I want to comment on industry at large and then we review our strategic growth and our recent progress. Global solar demand for 2012 is expected to be slightly higher than last year, perhaps 28 or 29 gigawatts. Industrial forecast show annual demand rising to over 75 gigawatts within five years partly due to a shift in demand from European to other markets, yet the global supply will still over strip demand in 2012 at roughly 45 gigawatts. So in the short term, there would be more consolidation in the industry, both in (inaudible) and in China and then projects will fall a bit further in line with the cost of reductions and the subsidy cuts. Polysilicon supplies are now struggling much more than module manufactures. The current spot price of polysilicon is $23 to $24 per kilogram, down from $30 at the beginning of this year. The price of the raw material has jumped faster than module ASP have jumped and many polysilicon suppliers have shutdown.
We are used to volatility and our strategy has not changed, but we will still, and always have adjusted to meet current market conditions. Last quarter, we said we will focus on advancing the market. We will invest in the supply equipment to downstream projects, with an EPC partner.Read the rest of this transcript for free on seekingalpha.com