GUANGZHOU, China, April 6 /PRNewswire-Asia/ -- Guangzhou Global Telecom Inc. (OTC Bulletin Board: GZGT), a mobile phone handset, pre-paid calling card distributor and provider of value-added mobile services in China, reported $44,810,929 revenues in 2008 as compared to $21,453,232 during 2007, representing an increase of $23,387,697 or approximately 109%. Renwoxing and Beijing Lihe, our new acquired two subsidiaries, contributed $10,541,150 revenue. In addition, our Zhenzhou Branch, Zhenzhou Equipment and Beijing Branch were new set up in middle of 2007, while these subsidiaries or branches contributed full year's operation result in 2008. As a result, the revenue increase is mainly resulted from our geography expansion strategy.
Our gross profit increased to $3,511,028 during the fiscal year ended December 31, 2008 from $1,249,934 of 2007, representing $2,261,094 or 181% increase. The increase of gross profit is mainly due to the increase of sales which resulted from our geography expansion strategy. Meanwhile, our gross margin increased from 5.8% to 7.8% resulted from new acquired subsidiaries and new branches or subsidiaries setting up around China.
Our selling, general and administrative expenses ("SG&A expenses") were $1,945,433 during the fiscal year ended December 31, 2008 as compared to $1,548,351 for the fiscal year ended in 2007, representing an increase of $397,082 or approximately 20%. The increase of SG&A expenses are mainly due to the expansion of operating locations. However, the percentage of increase of SG&A expenses are far more than lower than that of increase of revenue and gross profit.
Operating profit of $1,565,595 was recorded during the year ended December 31, 2008, as compared to loss of $298,417 during 2007. This improvement was the outcome of thoroughly planned executions of management policies and programs in spite of the impact from worldwide financial crisis.
Interest expenses of $1,065,222 during 2008 primarily included the interest of convertible debt and restructuring loss of the convertible debt.
Net loss recorded $283,590 during the fiscal year ended December 31, 2008, as compared to a net loss of $984,489 during the fiscal year ended December 31, 2007, representing a 71% decrease. The decrease in loss reflected management's efforts in 2008.
The company is constantly seeking to enlarge its customer base and network, placing extra importance on the growing affluence of the middle class in China even if the whole world are in the recession period.
"We are proud of our significant improvement in our operating profits especially when most of sectors were suffered a decrease. Guangzhou Global will continue to try its best to grow in terms of revenue and market size. We will also seek other growing opportunities by using our distribution network and to stay competitive to keep up with emerging trends and competition. Our managements are shaping themselves to be comfort with new challenges," said CEO Li Yankuan.
About Guangzhou Global Telecom
Guangzhou Global Telecom, Inc. is a national mobile phone handset and 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 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:
Judy Chen
info@guangzhouglobaltelecom.com
86 20 83172821
