GUANGZHOU, China, Aug. 21 /Xinhua-PRNewswire/ -- Guangzhou Global Telecom Inc. (OTC Bulletin Board: GZGT), a mobile phone handset, pre-paid calling card distributor and mobile handset value-added services provider in the PRC, announces that the Company reports revenues of $4.8 million in the second quarter of 2007, representing a 44% increase compared to the same period in 2006. Revenue during the six months ended June 30, 2007 was 8.6 million, representing a 30% increase compared to the same period in 2006.
Gross profit dropped from $298,843 to $265,248 or during the quarter ended June 30, 2007 as compared to $564,091 during the same quarter ended June 30, 2006. The significant drop is mainly because one significant supplier changed its sales policy, which left less gross margin for its agents. It not only resulted in the decrease of gross profit, but also resulted in the decrease of sales and general administrative expenses. Additionally, the drop of gross profit was also due to the fact that the sales rebate in connection with the sales in the second quarter of 2007 will be recorded in the subsequent quarters. Sales and administrative expenses decreased by $261,974 as compared to the same period of 2006.
The Company said it had a net income of $16,122 during the first quarter of 2007 compared to $64,975 in the same period of 2006.
"The 44 percent increase in sales is a symbol of our aggressive development in our business. With $500,000 cash we raised at the beginning of April, we were able to expand our business into other provinces to achieve more aggressive targets. Recently, we closed another round of convertible debt financing which will enable the company expand into other cities and acquire more small companies" said Li Yankuan, President and CEO of Guangzhou Global Telecom
About Guangzhou Global Telecom
Guangzhou Global Telecom, Inc. is a national mobile phone handset, pre-paid calling card distributor and provider of mobile handset value-added services. Maintaining cooperative relationships with China Telecom, China Mobile and China Unicom, the Company seeks to become the largest sales and distribution center of mobile phones, mobile phone parts and prepaid mobile phone cards in China. GTL plans to introduce new software and services through an expanded network of regional and neighborhood service centers, shops and virtual stores. For details, please visit our website at http://www.guangzhouglobaltelecom.com .
Safe Harbor Statement
Certain of the statements made in the press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding our future plans, objectives or performance. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the effect of changing economic conditions in The People’s Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.
For more information, please contact:
Aero Financial, Inc.
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