LDK Solar Co., Ltd. (
LDK)
Q2 2008 Earnings Call Transcript
August 11, 2008 5:00 pm ET
Executives
Pia Kristiansen – Investor Relations
Jack K. Lai - Chief Financial Officer, Executive Vice President, Secretary
Xiaofeng Peng - Chairman and Chief Executive Officer
Nicola Sarno - Senior Vice President - Manufacturing
Analysts
Pierre Maccagno - Needham & Company, LLC
Sanjay Shrestha - Lazard Capital Markets
Vishal Shah - Lehman Brothers
Jesse Pichel - Piper Jaffray & Co.
Kim-Chong Tan - UBS
Sam Dubinsky – Oppenheimer & Co.
Peter Peng – ThinkEquity Partners
Satya Kumar - Credit Suisse
Sheng Chen – Goldman Sachs
Mehdi Hosseini - FBR Capital Markets
Presentation
Operation
Good afternoon ladies and gentlemen and thank you so much for standing by. Welcome to the LDK Solar second quarter 2008 conference call. During today''s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you do have a question, please press the “*” followed by the “1” on your touch-tone phone. Once you make that choice if you decide you would like to withdraw your question press the “*” followed by the “2”, we will remove your line from the queue. Also, if you are using speaker equipment today, please note that you need to lift up your handset before making your selection. As a reminder, the conference is being recorded today on Monday, 11th August, 2008.
I will now turn the call over to Ms. Pia Kristiansen from The Blueshirt Group. Please go ahead ma’am.
Pia Kristiansen
Good afternoon and thank you for joining us on today''s conference call to discuss LDK Solar''s second quarter 2008 financial results. This call is being broadcast live over the web, and can be accessed on the Investor Relations section of LDK Solar''s website, www.ldksolar.com for 90 days.
On today''s call is Xiaofeng Peng, Chairman and Chief Executive Officer; Xingxue Tong, President and Chief Operating Officer; Jack Lai, Chief Financial Officer; Nick Sarno, Senior Vice President, Manufacturing; and Yuepeng Wan, Chief Technology Officer.
After the market closed in the US today, LDK Solar issued a press release discussing their results for the second quarter 2008. They also filed the press release on Form 6-K with the US Securities and Exchange Commission. The press release is accessible online at the Company''s website, as well at the SEC''s website, or you can call The Blueshirt Group at 415-217-7722 and we will fax or e-mail you a copy.
We would like to remind you that during the course of this conference call, LDK Solar''s management team may make projections or other forward-looking statements regarding future events or the future financial performance of the Company made pursuant to the Safe Harbor provision of the US Private Securities Litigation Reform Act of 1995. Although LDK Solar believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. We refer you to the documents that LDK Solar files from time to time with the SEC, specifically the Company''s most recent Form F-1 and any Form 6-Ks. These documents identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.
And now I would like to turn the call over to Mr. Jack Lai, Executive Vice President and CFO to go over LDK Solar''s second quarter 2008 financial results. Jack.
Jack Lai
Thank you Pia. Good afternoon. LDK Solar achieved record revenues and profits in the second quarter of fiscal year 2008.
Net sales were $441.7 million up 89.2% sequentially from $233.4 million in the first quarter of 2008. Our revenue growth was primarily driven by our ability to expand our wafer capacity faster than expected during the quarter. Total wafer shipments, including all processing service business, increased 50.8% to 191.7 MW in the second quarter from 119.2 MW in the first quarter. All wafer sales, which exclude the processing service business increased 60% to 160.2 MW from 100.1 MW in the first quarter of 2008.
The ASP per watt was $2.44, an increase of $0.22 or approximately 10% from the prior quarter. The higher ASP was primarily a result of a price increase at the beginning of the second quarter, which we expect to extend into the fourth quarter of 2008. Sales returns met in the second quarter was $2.1 million, increased from approximately $1.1 million in the first quarter of 2008. This increase is primarily due to an increase in volume shipments during the second quarter. OEM shipments were approximately 3.15 MW in the second quarter of 2008. In the second quarter of 2008, LDK Solar has one-time silicon material sale of 28…I am sorry, sale of $28 million and the respective gross margin was 13.5%.
By geography, revenue was 33% generated from China, 34% from Asia-Pacific excluding China, 29% from Europe, and 4% from North America in the second quarter. Our top 10 accounts in the second quarter accounted for 70.4% of total revenues. The top three accounts totaled approximately 35.7%, while our customers numbered 2 through 10 each averaged approximately 5% of our total revenues.
