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P.14
/ China Communications Services Corporation Limited
President’s Statement
Dear Shareholders,
I am very pleased to present the operating results of the Group in 2011.
Financial Performance
In 2011, the Group recorded total revenues of RMB53,507 million, representing a year-on-year growth of 17.8%.
Profit attributable to equity shareholders amounted to RMB2,115 million, representing a year-on-year growth of
17.2%. The sustained and rapid growth of our operating results was mainly attributable to the deliberate allocation of
resources by the Group to reinforce its share in its core market, capturing the development opportunities arising from
the network upgrade and expansion and broadband construction of the domestic telecommunications operators,
while simultaneously expanding into the domestic non-operator market and overseas market.
The cost of revenues of the Group amounted to RMB44,998 million, representing a year-on-year increase of 18.3%,
and the gross profit margin was 15.9%. Selling, general and administrative expenses amounted to RMB6,401
million, representing a year-on-year increase of 13.6%. As a result of the Group’s measures to enhance operational
efficiency, such as centralized fund management and collaborative management, and the realization of economies of
scale, net profit margin was 4.0% and remained stable over the past few years. As the Group devoted more efforts
in market development, there was an increasing demand for working capital, and free cash flow
(1)
for the year was
RMB414 million, representing a decline on a year-on-year basis.
(1)
Free cash flow = Profit for the year + Depreciation and amortization – Changes in working capital – Capital expenditure