GUANGZHOU, China, Nov. 17 /Xinhua-PRNewswire/ -- 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 $13,037,014 in 3rd Quarter revenues as compared to $6,417,955 during the same period ended in 2007, representing an increase of $6,619,059 or 103%. Revenues for this year are $29,454,982 as compared to $15,016,769 for the same period in 2007, soaring almost 100% and an apparent gauge of the company's ongoing market growth and expansion.
Gross profit increased from $403,156 during the three months ended September 30, 2007 to $905,184 in the corresponding period of 2008, representing a 125% increase. The increase of gross profit is mainly generated from the increase in revenue. Meanwhile, the gross margin improved from 6.3% in the quarter ended September 30, 2007 to 7% during the quarter ended September 30, 2008. The management had developed initiatives on wholesale distribution sales expansion and together with certain rebates, contributed to the higher margins.
General and administrative expenses were $231,582 during the three month period ended September 30, 2008 as compared to $238,364 for the same period ended in 2007, representing a decrease of $6,782. The company has put in place cost reduction programs and successfully trimmed down operating expenses. Newly-appointed CFO Richard Yan, is the chief architect of these initiatives to reduce overheads and to achieve cost-efficiency in the daily operations.
Operating profit of $604,387 was recorded during the three months ended September 30, 2008, as compared to $107,895 during the same period in 2007, representing an increase of 460%. This improvement was the outcome of thoroughly planned executions of management policies and programs that are aimed not only at cementing existing market share, but also increasing it.
Interest expenses of $58,414 during the three months ended September 30, 2008, which primarily included the interest payment of convertible debt.
Net gain of $285,327 was recorded during the three months ended September 30, 2008, as compared to a net loss of $429,801 during the same period in 2007. The year-to-date performance saw the company turned red into black, from a net loss of $400,982 to a net gain of $370,926.
Being constantly highlighted in each of our company report is our rapid expansion throughout the different regions of China. Revenue and profit growth can only improve as we grow. In today's economic environment, the focus must not only be on expansion, but also measures such as cost reduction and innovative methods and strategies to retain market presence. 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. The nine months of 2008 added more than 70 million mobile subscribers, based on government data. The retail market for mobile equipments and pre-paid calling cards continues to grow and will remain strong.
"Guangzhou Global will no doubt continue to grow in terms of revenue and market size, but will have to work harder to attract external investments and to stay competitive to keep up with emerging trends and competition. Revenues have grown from zero to almost $30,000,000 in just under 4 years. The balance sheet is healthy and despite the current downturn, operations will continue to expand. Our management must be doing something right in order to support this growth," 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 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:
Glenn Yang
Tel: +86-139-2224-7039 or +65-9847-4716
Email: glennyang@guangzhouglobaltelecom.com
