Yangtze Telecom Corp.

Yangtze Telecom Corp.

June 06, 2007 02:31 ET

Yangtze Telecom Announces 1st Quarter 2007 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 6, 2007) - Yangtze Telecom Corp. (TSX VENTURE:SMS) today reported its financial results for the first quarter ended March 31st , 2007. The Company operates through two subsidiaries in China - wholly-owned Wuhan ChengXi Information Technology Company Ltd. ("ChengXi") and 65%-owned China United Telecom Technology Company ("UTT"), and one subsidiary in Mongolia - NBC Co. Ltd. All dollar amounts are in Canadian dollars unless otherwise noted.

Revenue for the quarter ended March 31, 2007 was $394,000, a 94% increase over $204,000 in the same quarter last year on a comparable basis for net revenue reporting in the education business. Current quarter revenue consists of $264,000 from UTT, $1,000 from NBC (its sales proceeds are being earned over a 36-month period for a typical TV service subscription contract) and $129,000 from ChengXi. This compares with $163,000 from UTT and $41,000 from ChengXi for the 1st quarter of 2006. The large increase in sales from UTT was attributed to an increase in education net revenue from $160,000 in 1Q 2006 to $216,000 in 2007 as well as an increase in Credit Information System revenue from $3,000 in 1Q 2006 to $48,000 in 1Q 2007. During the quarter, the Company registered seventeen companies in its Credit Information System generating revenue of $48,000 compared with $53,000 in 4Q of 2006 when the Credit Information business was re-launched. Revenue from ChengXi also showed a marked increase of over 200% from the 1Q in 2006 as a result of introduction of new services in the voice information business. NBC announced its official opening ceremony on March 29, 2007 after months of construction, building and testing the system. It recorded total sale of 69 wireless digital set-top boxes in the quarter, but chiefly in the month of March, at mostly US$99 each including three year TV subscription service.

Head office expenses in Vancouver were $129,000, compared with $237,000 in 1Q 2006 or $152,000 as the 2006 quarterly average. Expenses were lower across the board in nearly all categories. Wuhan ChengXi incurred a loss of $87,000 for the current quarter; NBC, a loss of also $87,000 and UTT, $8,000. The Company recorded a loss of $287,000, net of minority interest, for the quarter compared with $343,000 in 1st quarter 2006.

The cash position of the Company, $650,000, was virtually unchanged as at March 31, 2007 compared with $659,000 as at December 31, 2006. The cash loss for the quarter was about $271,000, which was more than offset by favorable changes in working capital. The Company is in the market for capital financing as it has signed a Letter of Intent to enter the Digital TV market in China as announced in a press release on May 24th, 2007.

"While the continuing loss is disappointing, the Company has made significant improvement on the cost side as it positions itself in the digital TV network market with the rollout of the wireless TV service in Ulan Bator," said Emily Chen, President of Yangtze Telecom. "The execution of the Letter of Intent to acquire a major digital broadband network operator in Beijing is a decisive step the Company has taken to put a stake in this large emerging digital TV network market in China."

Yangtze Telecom's 1st quarter 2007 financial reports and Management's Discussion and Analysis are accessible on the Company's web site (www.yangtzetelecom.com) and on SEDAR (www.sedar.com).

About Yangtze Telecom Corp.

Yangtze Telecom Corp. is a provider of telecom value-added services and wireless digital TV services for consumers and businesses in China and Mongolia. The Company is focused on business applications utilizing a combination of satellite platforms, the internet, and wireless data communication technologies. Key applications to date are the Credit Management System, Wireless digital broadcasting and Distance Learning. For further information on Yangtze Telecom Corp., please visit the Company's web site at www.yangtzetelecom.com.

The TSX Venture Exchange has not reviewed, and does not accept responsibility for the adequacy or accuracy of, the contents of this press release.

Contact Information