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 U.S. 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 today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. China Sunergy does not make – 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 Cai Thank you all for joining. We are reporting (inaudible) this quarter. And by now, you know that we are all operating in a scientifical environment. With the shrinking short term demand, falling prices, fewer feed in tariffs and a high cash flow. The key is how we are performing relative to peers and how determined we are to get through this period? We believe that our second quarter result, while disappointing, do demonstrate that we are competing as effectively as we can in this market and are working creatively as a management team to optimize our business model. On the positive side, our shipments have totaled over 150 megawatts, which was precisely within the guidance provided the last quarter and are almost have doubled our shipment in last quarter. We also made good progress in further reducing sale and the module in the silicon of conversion cost, which we will discuss in detail later on the call. However, first we’ve pre-announced to the market on August 13, our gross margin fell short of original guidance by the roughly 5% due to the fast falling ASPs and the depreciation of the euro against the U.S. dollar during the period.
Our revenue in Q2 were $110 million. Gross margin were close to a breakeven level at negative 0.3% and then we incurred a net loss of $30 million for the quarter.We are reviewing our ForEx hedging policies to mitigate current losses going forward. With the exception of the foreign currency fluctuations, these results were not surprising. We all know that the solar industry is still being the middle of that difficult transition. Handle prices are still falling. There’s still a serious overcapacity and an inventory buildup program which is driving ASPs down. Our own ASPs dropped 12.8% to $0.75 per watt and that will go lower. The situation is made worse by the conservative behavior of the Europe local banks who are taking longer to approve financing for solar projects. Yet, solar energy is below repair, electricity prices and EMEA with parity in some of the Europe and the Middle East. And we can see that long-term outlook is favorable. Fundamentally, our strategy remains unchanged, which is to provide best solar product at the lowest possible cost. We will strive to lower our cost at a faster pace than four of the ASP but we are realistic that it may be very difficult to achieve healthy gross margin this year. To mitigate this risk, we are working hard to explore more financially, look creative ways to reach the target market, such as investing in solar parks as developers. We will make steady and incremental improvements in the efficiency, quality and the service for our solar panels. We assure you that in our quest to lower manufacturing cost we will never compromise our quality. Furthermore, in addition to looking for opportunities to invest selectively in balancing the projects and offer more after sales service, we will try to move our sales teams and some of our operations closer to market and the customers. We are confident that we can continue to grow our business on an independent basis and that we expect the industry return to profitability in a medium term future. Read the rest of this transcript for free on seekingalpha.com